by AutoBody by Jake » Thu Jan 17, 2008 02:36 pm
Thought it best to start a new topic. Maybe there's people out there that have questions about DRP's and the shops that become one.
I've got quite a bit of experience with the direct repair program process and it's ups and downs, yes. There's a fair bit that goes on behind the scenes, and that's where I see some headaches.
Do you have any experience with them where you are? What do you think of them?
I've got quite a bit of experience with the direct repair program process and it's ups and downs, yes. There's a fair bit that goes on behind the scenes, and that's where I see some headaches.
Do you have any experience with them where you are? What do you think of them?
Posted: Sun Feb 10, 2008 03:53 pm Post Subject: Challenge to defenders
I'm going to make a simple statement: Insurance company DRP programs are undisclosed side agreements to defraud the policyholder and claimant during the settlement of their claim.
I have heard the argument from the local hack to the Chairwoman of ASA that there are " good DRP's and bad DRP's" ... OK, please name the "good DRP". Name that one "good one" and I will even supply a copy of the agreement to disect here.
We can discuss if it violates any local, state and federal laws. We can debate its' effect on the ideal of insurance code and conduct.
So how about it? give me the "good one"
Posted: Mon Feb 11, 2008 04:34 am Post Subject:
You are correct subject to the policy conditions which lay out EXACTLY how the vehicle can be repaired...
I have read every paper I have ever received from my insurance company and have never seen anything regarding parts usage and repair procedures. I get a little sick of hearing the "you signed your policy" from the insurance side. If I never got any papers in my policy mentioning non OEM parts how can you tell me it's part of my policy? I recommend that if anyone wants to argue this point they better find some documention from a policy stating what parts can be used, because I have never seen such a thing.
parts are OEM!!!! For pete's sake I'd think you'd know that!
Let me explain something, a car ends up in a salvage yard because it was totaled. Meaning it was damaged beyond repair. So this vehicle has been hit hard enough that is not repairable. When a car is in a collison the whole car takes the force of the impact, not just the damaged area. That is why we pre pull things proir to disassembly. To get the car back in tolerance and square. This doesn't happen in junkyards. Do you know how many times techs go to install a LKQ door or fender and they don't fit because they are so tweaked out of shape from when the car they came off got hit by a train. This isn't always the case but it happens alot. I love when adjusters tell the customer LKQ parts can't have any dents or damage? Why do they pay LKQ clean up then? I have yet to see a LKQ part that can be scuffed and painted. What do you think a customer would think if they saw the process of a LKQ quarter being used? From the 16 year old kid in the "junkyard" hacking the side of a car off with a gas powered demo saw, to the poor tech trying to separate the quarter from the "LKQ cut" without completely destroying it, then seeing the LKQ P.O.S on the car covered in filler because they can't be taken off without being damaged. Nothing pisses me off more then someone writing a used quarter. You don't recycle weld on panels. Have a little common sense. You can defend yourselves all you want, but if you write a LKQ quarter and honestly think it is a good repair and that is what the customer should get, you have let yourself get brainwashed by the pennypinching company you work for.
By the way Lori, my father doesn't work for State Farm and never has. I don't even like the company he works for because I hear all the "policies" they have. I know you think I hate all insurance people no matter what the facts are, but I know plenty of good adjusters, a few are even females. The problem is when a good adjuster writes a good honest estimate and works with the shop without a hassle, it seems he always has a reinspector right on his tail asking why he wrote this or why he wrote that. So I know there are good adjusters out there who are honest people, unfortunetly most of them work for companies who only care about saving as much money as possible and they get harassed for everything they do by the company.
Posted: Mon Feb 11, 2008 12:37 pm Post Subject:
I'm going to make a simple statement: Insurance company DRP programs are undisclosed side agreements to defraud the policyholder and claimant during the settlement of their claim.
WOW wouldn't call that 'simple' at all, and where do you come up with the ''undisclosed'' non-sense...the owners know that the shops are on their DRP program and that an agreement exsists.......what side agreement defrauds the policyholder? Who by the way is the only one with a contract...not the claimant.....so lets get that part staight. If you are talking about the DRP conract, I've got one right in front of me, (granted they are not all the same, I can only speak of this one myself)....I doubt you've read them all...I can find nothing at all in this contract that you could even find wrong with! Explain please the ACTUAL parts of a DRP contract that you think 'defraud' the policy holder....I have heard the argument from the local hack to the Chairwoman of ASA that there are " good DRP's and bad DRP's" ... OK, please name the "good DRP". Name that one "good one" and I will even supply a copy of the agreement to disect here.
That's awesome! You go right ahead, type in the exact agreement of the three or four top auto carriers, and let's do that...discet them...you show me where they are asking or demanding that you do anything that isn't right to fix a car! I'm from MO, ''show me''....I do agree though there are good and bad...meaning some that require of the shops (in my opinion) way too much of their time and work, from totalling cars, to AA's etc...I don't think that is a shops job, I personally think the shops job is to fix the car! PERIOD....but you all sign these agreements...you scan and post those agreements....lets see...We can discuss if it violates any local, state and federal laws. We can debate its' effect on the ideal of insurance code and conduct
I can't see how they could violate any local, state or fed. law, and be so prevelant...seriously what laws could be violated? And surely there would be suits all over the place if there was one...meaning your ascertion about DRP agreements....really what laws?So how about it? give me the "good one"
I think you have to understand and agree, if you have any contact with shops outside your area thru a shop group, nace, whatever, that truly it's regional as I've stated before, one area loves state farms program, the next hates it...and so on...now if in your area you cannot find one good drp program and you are a drp for all of them...hmmmmmmmm....reminds me of the kid that 'everyone hates me'....it is my understanding that their are two large companies who's drp programs, the adjuster still comes and writes the sheet, (not asking the shop to do so) they locate and verify the parts, contact owners etc, and reach an agreed price with the shop BEFORE repairs begin...they follow up with the shop and owners throughout the process etc...so this one the shop really isn't doing anything but fixing the car...which (again in my opinion) is what they should do...now what's wrong with THAT one?
I have read every paper I have ever received from my insurance company and have never seen anything regarding parts usage and repair procedures.
I'd say you've missed reading your entire policy, or maybe your state doesn't mandate it be in there I don't know what state are you in provide that information and I'll check...I get a little sick of hearing the "you signed your policy" from the insurance side. If I never got any papers in my policy mentioning non OEM parts how can you tell me it's part of my policy? I recommend that if anyone wants to argue this point they better find some documention from a policy stating what parts can be used, because I have never seen such a thing.
Seriously regardless of what you think of me and my profession do you REALLY think I'd say something like that without proof? really? I don't just 'throw' stuff out there without knowing what I'm talking about....here you go direct from a standard Missouri auto policy form a-20.5-a:Under Part V-auto physical damage coverage, coverage f-collision, coverage g-comprehensive coverage....ADDITIONAL AND REPLACEMENT DEFINITIONS USED IN PART V
REPAIR means, the restoration of form and function by restoring existing parts or by using REPLACEMENT PARTS if needed. Repair does not mean the restoration of pre-damage value nor does it include compensation for the diminution of value the accident caused.
Pretty clear....again, let me know your state and I'll research it for you...maybe your state doesn't require this in the policy but I sincerely doubt it...REPLACEMENT PARTS means new or previously used parts, made by any manufacturer whether or not that manufacturer made the orginal part or vehicle.
For the sake of space I'm not copying your next paragraph...See you go straight from what I said to talking about quarter replacement! I agree with you 150% on used weld on parts...and only write same, if the vehicle would otherwise total, and the shop and owner are in total agreement to save the car.......I disagree however with your statement about other parts far from impact being damaged or not fitting ALOT...rarely have I ever had this come up...meaning a used door that looks fine, but won't fit due to the tweek the body took....you and I both know that 90% of the time, that a vehicle totals from a front end hit, and in 99.9999% of the time there is not one thing wrong with that used deck lid, bumper etc....Now I'll agree with you that there are times when a yard sends a door (mostly) decklid, fender that is just beat to crap to the shop...now when does this happen? In transit mostly...you have to understand that when I call a yard for a part it is ''supposed'' to meet a certain standard. In my area 'ins. quality' now when that part arrives if it's not, my guys call me I go and look at the part and then I get that vendor on the phone and chew his butt! Because HE not I was the one that misrepresented that part....You and I know all too well about this problem (parts/vendors etc..we could have a thread three times this long about that problem int he industry).....re: clean up, don't know how it works in your area, but I no longer pay clean up, the salvage yard takes it right off the price of the part...for instance, if I bid a door for 500 bucks (plus markup) and it comes in with 2 hours of damage on it, the shop calls the yard, and 90 bucks comes off the price of that part....If I have to get involved then I do...but only 'clean up' I pay now is again in the rare occurance I used a weld on part for cut/trim/fit.
but if you write a LKQ quarter and honestly think it is a good repair and that is what the customer should get, you have let yourself get brainwashed by the pennypinching company you work for.
I've already explained my postion on used weld on parts and the only time I use them...would my employer prefer I write used? maybe...but the 'tite' with my company is I only have to even source them if I'm also replacing the entire inner structure...another thing that I touched on earlier...so many times these adjusters and shop foremen/managers don't take the time to fully understand the systems these sheets are written in...by the time you add everything that isn't included, you generally arent' that far away from new oem...I know you think I hate all insurance people no matter what the facts are, but I know plenty of good adjusters, a few are even females.
Glad to hear that, maybe I'm one :roll: :wink:The problem is when a good adjuster writes a good honest estimate and works with the shop without a hassle, it seems he always has a reinspector right on his tail asking why he wrote this or why he wrote that.
FINALLY something else we can agree on! ha ha...So I know there are good adjusters out there who are honest people, unfortunetly most of them work for companies who only care about saving as much money as possible and they get harassed for everything they do by the company.
Let's be honest about something here...I don't know if you are a tech/manager/owner, regardless, you are in business to make money...right? everyone is in business to make money....NOT at the expense of the integrity of the vehicle or worker however....Let me throw something else out here in case there is ever any question...the way I write estimates is the EXACT way I'd want one of my vehicles repaired....now, are there times when I don't agree with certain things that I have zero control over? such as partial refinish (except for my prior example) damn straight there are....but never about non-oem parts...truly..not in the last 7-9 or so years....I have never insisted that a 'bad' part be put on a car...I won't write certain parts that I know from experience aren't fitting right (yet) like most of the splash shield for example...I talk to the shop when a 'new' part pops up, or like the splash shield, 'you havin' trouble with these?' yes, ? ok, I won't use it...simply really...also my pay has absolutely nothing to do with my sheets, the cost of them the number of non-oem parts I use etc....(i just wanted to get that out there before someone brought that up too)....Also would like to say that your last few posts came across much better, I have no problem with debate, trying to see the others perspective etc...it's just when you color all with the same cloth or get personal, that I get a little ragged... :DPosted: Mon Feb 11, 2008 09:17 pm Post Subject: Being ripped off by big brother
You Insurance people amaze me. As long as you can justify everything it's all roses? Why shoul I have to work for what the hack shop down the street charges?? I have $50,000.00 worth of tools but get paid the same as the $10,000.00 guy. I have 30 years experience and have never been sued and have had less than 1% come backs always. I work on Vettes, Mercedes and $250,000.00 drag cars but I can't get payed or charge more than the back yard boy's charge.
Give it a rest with your we don't steer customers. I get steered against because I follow OEM procedures and do what I charge for and charge for what I do!!
If I sand and buff nearly every job because I want it right, you just don't pay for it!
Whatever makes you sleep at night hunny, But I don't care if your a boy, girl, blue eyes, no eyes. If you try to rip off my customers with junk parts and a short sheet we will meet in court.
Posted: Tue Feb 12, 2008 12:54 am Post Subject: on the topic of generic parts, drps, and adjusters
Lori,
I have read about four to six hours worth of your posts and advice to come to the conclusion that you really truly believe you are helping people and I believe you have a good heart with good intent. However, I believe that you are living in a Polly anna world in which you believe insurers are incapable of some of the things we are telling you we see regularly by most all insurers. If you choose to operate your business independently without coercion from the insurer to bow down to their criteria, you are a target. If all adjusters did their job with the sincereness and dedication you seem to possess, we wouldn't see the things we see and read about,
such as the "we'll pay that claim when Pigs Fly" fiasco in Colorado by one company and the recent Groebner case in Illinois where an adjuster was extorting shops so they could remain on the prefered list or drp programs.
I also live in missouri, and you'll have to show me some of those a/m generic parts that are equal to oem, because I have yet to see any. The plastic parts are definately more brittle and less pliable. Even the capa parts do not have the galvanized protection on them, nor are they always constructed with the same thickness and weight of metal or possess the correct spot welds. They never have the sharpness of distinction that a true oem part possesses. Even state farm, in the Avery vs State Farm trial, admitted in email presented that they knew that generic parts were not equivalent. This not to say that generic parts have not improved. They have improved somewhat but they don't hold a candle to the original parts.
Most shops, whether DRP or non drp, are part of the go along to get along crowd. Because it makes no difference to them and for fear of intensified steering abuse, they comply with their use but would prefer to use oem.
If I read the state statutes accurately in the Missouri Unfair Claims Practiced Code of State Regulations, it states that if an insurer prepares an estimate with the use of an alternative, aftermarket, or generic part, that it must meet the definition of like, kind, and quality and must perform as the original. In my 35 years plus of experience in owning and operating a collision business, I have yet to see any non oem part that matches this criteria made by a non oem manufacturer for external body parts useage.
I too, have been heavily steered against because of my proactive stance on educating consumers when they are being abused by both first and third party insurers. I have had customers sign affidavits that state that the regional claims manager of one of Missouri's largest insurers told her agent that the reason they did not want her to bring her vehicle to my business was because I was a crook and that they were building a case against me. A few more of these affidavits and this claims manager is toast for tortiously interfering with my business and slandering me personally. I even have this adjuster on tape telling me that I have to cost shift to match his final bill. This is not personal problem between me and this adjuster, I truly believe he has been instructed to operate in this manner.
I believe that there are still some older adjusters around that try to do the right thing, but the pressure for you guys to perform ethically is so radical that I know of two local adjuster in recent years that have had heart bypass brought on by stress of performing under the pressure exerted on them by the company.
I also wrote the post about diminished value. You make it clear that an insurer is not required to restore the value to a car, but this is in conflict with the fact that you are servicing an actual cash value policy. You still have to retore the vehicle to pre loss condition and value. You do not have to pay for any perceived loss of value, but you can not restore the vehicle in anyway that lowers the post loss value of that car.
I know you believe in loss of value or diminished value although you may feel you do not have to pay for the loss on first party claims. I say this because I read a post that you stated that you would lower the value of the total loss settlement for pre-existing damage that was unrelated to to the current claim. Is this not the same thing. You are only paying for the current market value based on the cars history and conditon on the total loss.
Others may come to this site to monitor it as I have to present our side of the equation to challenge possibly some of your own beliefs. It's not our intent to demean your good will but we feel that our viewpoints must be represented as well as our experiences with the insurance industry.
Mike of the Ozarks
Posted: Tue Feb 12, 2008 12:54 pm Post Subject:
Good morning Mike
...in which you believe insurers are incapable of some of the things we are telling you we see regularly by most all insurers.
No, Mike your incorrect, I know and believe many carriers and some adjusters for that matter are very capable of the things your are saying, (remember I was a large body shop manager too for several years :wink: ).....re:Missouri Unfair Claims Practiced Code of State Regulations, it states that if an insurer prepares an estimate with the use of an alternative, aftermarket, or generic part, that it must meet the definition of like, kind, and quality and must perform as the original
If memory serves it also says they must be clearly identified as well on the sheet...
I too, have been heavily steered against because of my proactive stance on educating consumers when they are being abused by both first and third party insurers
I'm with you on total education and the customers right to know all information re: their vehicle repair, choices etc....Are you saying Mike, that you and/or your shop have actually been targetting (''steered against") by a carrier(s)?I have had customers sign affidavits that state that the regional claims manager of one of Missouri's largest insurers told her agent that the reason they did not want her to bring her vehicle to my business was because I was a crook and that they were building a case against me
Seriously? (not saying it didn't happen just shocked), are you saying the manager told the agent who told your customer this? Or do you have it straight from the agent? If this is true and proveable I think you have no choice but to sue...of course...what is this 'case' they are alleging?building a case against me
for what?I even have this adjuster on tape telling me that I have to cost shift to match his final bill.
Is this a DRP Mike? ''Cost shift'' is way different than saying, 'hey guy this is all I can do' you see what I mean? He can't ask you to change things that are or are not done to meet at the bottom line...I believe that there are still some older adjusters around that try to do the right thing, but the pressure for you guys to perform ethically is so radical that I know of two local adjuster in recent years that have had heart bypass brought on by stress of performing under the pressure exerted on them by the company.
Tell me about it! I am an 'older' adjuster (forty-eight) and been at this since 1987....there is no question, that there are many 'rules' that we have to follow, ie, non-oem parts on certain year/mileage vehicles, partial refinish, (which i also don't agree with totally and have addressed) used weld on parts, and we won't even go into clipping..which fortunately is seeing it's way out...there are things like this Mike, a good adjuster knows how to fix the car correctly and how to write the sheet to 'justify' what he/she needs to do for the auditor as well, and still come to a conclusion with the shop that is win/win for shop/adjuster/owner....the problems arrise when you have an adjuster with little experience, who either thinks he knows it all or a shop that won't take the time to teach...now on that topic....You seem to me to be a very intelligent, caring person, who wants to fix the car, the correct way...let me ask you something...when a new adjuster comes to your shop do you (or your foreman whomever) actually try and help this kid, or is there an automatic standoff? You know what I mean? I have to say that bein' a chick in a mans world (especially when I started) has of course it's con's but also it's pro's when I was a shop manager (and now) there isn't nearly the 'chest bumping' going on well cause I'm a chick....and have found it easier for me to educate rather than 'guy to guy'...do you understand what I'm saying? I guess I'm asking is there a sincere effort to work together or a brick wall thrown up? When I have to go to a shop because three other adjusters have running crying from it because of the horrible treatment they've received (without having even been to that shop before)...we as partners in repairing our mutal customers vehicles have a huge problem....You make it clear that an insurer is not required to restore the value to a car, but this is in conflict with the fact that you are servicing an actual cash value policy.
I'm not understanding this statement, are we talking about a repaired vehicle? An insurer is required to return a vehicle to pre-loss condition post accident..I'm not getting this one Mike is your point that by using a/m reman used parts the vehicle is not returned to pre-loss condition?You do not have to pay for any perceived loss of value, but you can not restore the vehicle in anyway that lowers the post loss value of that car
agreed............I know you believe in loss of value or diminished value although you may feel you do not have to pay for the loss on first party claims.
Yes, and no, first, it's MO who says that there is no diminished value on first party claims not Lori....I do not feel that a vehicle that has been correctly repaired has suffered a loss of value...if that's the case Mike every vehicle you repair would have diminished value, I'm saying that simply by fact that a vehicle was in an accident and repaired does not in an of it's self result in a diminished value, if the shop did it's job....I say this because I read a post that you stated that you would lower the value of the total loss settlement for pre-existing damage that was unrelated to to the current claim. Is this not the same thing. You are only paying for the current market value based on the cars history and conditon on the total loss.
No, I don't see this as the same...we have two 98 explorers on a lot for sale, everything is identical, right down to mileage/options etc...but one has a ten hour dent in the quarter, other one does not...that vehicle isn't worth what the other one is......that is what the pre-existing ''damage'' is about....now, let's say we repaired both of those vehicles six months ago, and lets say for the sake of argument one of them was repaired with capa a/m cover, lamps, fender, header, even a hood...and for some reason the other one was with all new oem parts.....(i know this because we insured them both and I have to look at the prior claims etc)....again both vehicles being equal, one is not of less value than the other when I am determining the ACV (because they are now totaled) because one has a/m and other has new oem parts...they will be the same....on the other hand, I have while determining ACV on total losses, seen and deducted some value for poor prior work, not what parts are used, if I have a vehicle that I can clearly see is full of dirt, fisheyes, sand scratches, just a mess of a job, that vehicle is going to be worth less...not because it was repaired, but because of the quality (or lack of quality) repair....Others may come to this site to monitor it as I have to present our side of the equation to challenge possibly some of your own beliefs. It's not our intent to demean your good will but we feel that our viewpoints must be represented as well as our experiences with the insurance industry.
I'm totally with you here Mike and welcome your contributions, as I'm sure all do....It is not your intent to demean, but rather to have an open honest exchange of ideas and experiences, that is what this is all about....however when it becomes hostile and a personal attack or when posters label and entire profession, that is when I take exception, as well I should...much like Mastertech clear hostility because (amoung other things) he feels he has toIf I sand and buff nearly every job because I want it right, you just don't pay for it!
well, Mike we both know what that means....... :roll:I sincerly hope you stay around and we can exchange ideas openly....I work 100% of my day in body shops...you'd be hard pressed to fine one tech/manager/owner to say a harsh word against me or my work product...are there crappy adjusters/companies out there? you bet there are same as there are bad shops....I truly belive that the answer lies in open communication and education on both sides without hostility...
Posted: Wed Feb 13, 2008 06:29 pm Post Subject:
Part of Lori's Post:
Posted: Mon Jan 21, 2008 1:00 pm Post subject: Direct Repair Programs ...
.What about the shops that charge (for instance) to detrim a door, and I make an unannounced drop in the vehicle is in the booth, or just been sprayed and the idiots taped everything off? huh? what about them? Is this not lying and theiving? of course it is...but I"M NOT MAINTAINING THAT ALL SHOPS ARE THAT WAY! But there are some that are...I suppose you are going to say that's it's ok, since the big bad ins company ALWAYS screws the poor body shop right? Two wrongs make a right? If that is your stance that is unethical and you know it.....You are owed for what you do, and no more!
I'm sure there are some Shop's and Insurer's that cheat the consumer whenever they get the chance. But.
I have two questions. In this situation...
Do you ask to see the Final bill from the Repair Shop?
Do you ask if the consumer Authorized a complete repair?
(since a consumer isn't required to repair any of the damage, they could have demanded the repairer Not perform those tasks. Lowering the final cost of repairs to the consumer.)
Just wondering,
FK
Posted: Thu Feb 14, 2008 12:33 am Post Subject:
I'm sure there are some Shop's and Insurer's that cheat the consumer whenever they get the chance.
I agree there are bad apples on both sides of this fence...I preferred to think/know there are far and away more good than bad, (on both sides).......Do you ask to see the Final bill from the Repair Shop?
Who is the 'you' that you are referring to in this statement?Do you ask if the consumer Authorized a complete repair?
I'm guessing that you mean the adjuster here, does the adjuster ask to see the auth for repair? If that's your question...in DRP shops which is what this thread pertains to, there is an authorization for repair signed yes and in the file...(since a consumer isn't required to repair any of the damage,
You are correct they are not required to repair any of their damages, however, they cannot pocket this money if a leinholder is present (on first party claims) unless the lein holder (mistakenly) signs off on the draft...since a consumer isn't required to repair any of the damage, they could have demanded the repairer Not perform those tasks. Lowering the final cost of repairs to the consumer.)
This is not correct in first party claims with a leinholder present...as an example....Ins. damages vehicle goes to the shop to have it repaired, insurance adjuster writes the sheet, or agrees with the shops sheet and pays for the repairs minus the deductible to the shop and insured, based on that estimate...Then (in your example lets say) the vehicle owner says to the shop, 'hey, I don't want you to do 500.00 worth of the repairs written' to 'cover' the deductible or get most of the money back themselves...well we got us a lot of trouble here...First of all in a DRP it will be in the contract that they actually do what is written on the est=FRAUD....If the insured has a lein holder they are also an equal insured under the contract and must be protected...so any work that is not done, would go to the insured with the leinholder protected...now on the other hand if this is a claimant and the draft has been made ONLY to them...go for it...or (still) if a claimant and the draft is made to them and the shop (NOT a DRP that would be voiding their contract by commiting fraud)...and that shop is silly enough to pay the income taxes on the full repair and not getting all the money...(all companies imput the tax id # on the draft when made to a provider like a shop and this generates a w2 for the shop)...well that's just stupid...Posted: Fri Feb 15, 2008 06:54 pm Post Subject: Not sure about a few things.
If I have no contract with and insurer, and I have not reached an agreed price, as it is not my contractual obligation to do so, but I have a contract with the vehicle owner and the insurer pays the shop direct ir shop and vehicle owner on the draft, and if I work from my own repair plan in agreement with the other contracted party and my final invoice is based on what either the first or third party requests of their property, then how can I be a party to fraud or why would I be liable for any federal income taxes on services not provided.
I believe that insurers are indemnifying policy holders and independent shops are not subcontractors to insurers unless they sign an agreement or arrangement to do so. A shop is not a subcontractor by virtue of any implied contract of adhesion by using the insurer funds paid to the policy holder for their loss to pay my invoice of repairs.
It's the leinholder and vehicle owner's property. If the leinholder waives and signs the insurance draft and tells the property owner fix what you want then would you consider that fraud or evasion of paying taxes?
Should I have to hire a private detective to chase down every person who has forged my name to an insurance draft to cash or deposit into their account because I am liable for earned income from a payment received from someone I did not have a contract with? If Uncle Joe paid 2000 dollars to have his nieces vehicle repaired, is he required to send a 1099 in to the government for that payment even though he did not contract the repair?
I'll grant you that my invoices had better be in order to prove my earned income but I can not be held liable for taxes on income not earned regardless of how many 1099's I receive.
This is the advice I have been given in the past by an attorney which insurers routinely hired to consult with.
Posted: Sat Feb 16, 2008 12:32 pm Post Subject:
Mike,
If I have no contract with and insurer,
First of all in a DRP it will be in the contract that they actually do what is written on the est=FRAUD--in DRP shops which is what this thread pertains to
why would I be liable for any federal income taxes on services not provided.
All companies that I am aware of (within the last few years many much longer) have to include (per the IRS) your fed.tax id number (usually starts with 43-something) on all draft payments that include a company or vendor whatever you want to call them that is completing work...(including contractors etc on homeowner claims) now for awhile we got away with not doing this if the company was incorporated, why? I don't know don't ask me I have no idea what the difference is...What I do know however is that every draft (in the company I work for which is one of the top three auto insurers) that has a body shops name on it has a fed.tax number which reports this total amount of the estimate to the IRS. What you do about it is your deal...if you want to pay taxes on money that you didn't get (because you didn't do all the repairs and either gave money back to the owner or covered the deductible that way) I guess you can but doesn't sound like a very good business practice to me....then how can I be a party to fraud
again, the thread is about DRP's, but another problem can arrise for the insured when they have another claim six months from now and that bumper cover wasn't repaired, and they want the ins company to pay for it again...not happening Mike...It's the leinholder and vehicle owner's property. If the leinholder waives and signs the insurance draft and tells the property owner fix what you want then would you consider that fraud or evasion of paying taxes?
(NEVER EVER have I heard of a leinholder saying, 'fix what you want'-not saying it hasn't happened, will say in 22 years I've never heard it..if they did say that of course then you are correct, aside from that) NO and here's why, if the leinholder and insured are on the draft (no shop) and that leinholder is silly enough to just sign that draft over without making sure those repairs are made....I'm off the hook (an an insurance company) on the other hand....By putting the shop on the draft, if the shop doesn't do the repairs that were paid for and that vehicle is repopped, then it's the shop and the insured that will be held liable and have to pay that amount to the lein holder not the insurance company...and yes I 've seen it happen both ways....as an example...the young adjuster issued payment only to the owner of the vehicle 1k in damages, the owner blew the money on everything BUT the repair, that vehicle is repo'd the leinholder gets the car back and there is 1k in damage on it, they come to the insurance company and say, 'what's up with this?" ins company says, 'oh crap' because we didn't protect that leinholder we (as an insurance company) will have to pay that claim AGAIN...now, same scenerio only the adjuster put the shop and owner on the draft to 'insure' repairs are made...again vehicle is repo-d, but only 500 in damages are repaired, leinholder calls ins company who says, we paid Mike of the Ozarks based on our estimate to fix all 1k of the damages, he never contacted us with any different information, he knows what we were paying for....so now the leinholder calls you (and the insured) and says, 'hey were you paid among other things to fix this bumper?' yes, mr. leinholder I was, but the insured didn't want to so I just gave him his money back' ok, now we can go to the insured and he will have that added to his debt....or when the leinholder calls Mike, you say, 'well it's like this, the guy was more concerned about us putting new wheels on the car, so instead of replacing that bumper cover we used that money for new wheels'' ain't gonna go over Mike...in ''our'' state that is.....I'll have to be honest and can't say that I know the outcome of these, many with insureds, but can remember only three where body shops were brought into the action...I honestly don't know the outcomes, if the shops got out of it or ending up having to pay all or a portion....I'll try and remember the names/shops though, and talk to the owners (if I can remember) and see what did happen...Also if the insured and leinholder are the only ones on the draft then there wouldn't be a tax number on the draft (not always on the draft by the way but is in the computer)....then if the insured pays you a portion to do whatever actual repairs you did do then that is between you and the IRS and no different what so ever than a 'customer pay' job.
Should I have to hire a private detective to chase down every person who has forged my name to an insurance draft to cash or deposit into their account because I am liable for earned income from a payment received from someone I did not have a contract with?
No but you'd better bet if it happened to me I'd be getting a copy of that draft from the insurance company and heading straight to the prosecutors office on the double...why would you want to pay taxes on money you didn't get? You should be furious about that! And yes, I have seen a couple of those cases successfully prosecuted...If Uncle Joe paid 2000 dollars to have his nieces vehicle repaired, is he required to send a 1099 in to the government for that payment even though he did not contract the repair?
nope...I'll grant you that my invoices had better be in order to prove my earned income but I can not be held liable for taxes on income not earned regardless of how many 1099's I receive.
No but you sure can be held responsible for the taxes on payments issued to your for a job, based on that job...and what a mess to have to sort that out....I'm not saying that you might not be able to (hopefully) prove to the IRS if you are audited that yeah, I got a 1099 for 3k from blah blah insurance company, but I only really got 1k ...again as you said you'd better have your files in order, and I'm sure ''you'' do....and personally if I were in your shoes and routinely doing this...I'd have those ready as they come...do you go thru every single 1099 and put it with the J.O.? and change it to the actual amount of work you did? You'd have to, in order to make sure that your not paying taxes on more than you should....Add your comment