Earl Stewart is the owner and general manager of Earl Stewart Toyota in North Palm Beach. The dealership is located at 1215 N. Federal Highway in Lake Park. Contact him at www.earlstewarttoyota.com, call (561) 358-1474, fax (561) 658-0746 or email firstname.lastname@example.org. Listen to him on Seaview AM 960, FM 95.9 and FM 106.9, which can be streamed at www.SeaviewRadio.com every Saturday morning between 9 a.m. and 10 a.m.
I've written other articles about how insurance companies try to fix your car as cheaply as they can without showing the necessary concern for the quality and safety of the repairs. You can find them on this blog, www.EarlStewartOnCars.com, "Collision insurance and your rights" and "Coping with body shops, insurance companies."
This new article was written by Alan Nappier (pronounced like rapier), my body shop manager at Earl Stewart Toyota. Alan is not only the best body shop manager I've employed in my 47 years as a car dealer, but one of the smartest, most articulate people I know. I'll probably sound like I'm overdoing it, but he also has an incredible sense of humor. I say all this so that when you read what he has to say below, please take it as the gospel. Alan is not a "smoke blower" or an exaggerator. He tells it like it is.
Your body shop is either at war with the insurance companies or they fight on their side. If your body shop is not fighting for you to protect your car from cheap, poor quality and unsafe repairs you're in a heap of trouble. The chances are that if your body shop is on your insurance company's "approved repairer list" that its loyalty is not to you but to that insurance company.
You should take your car to the body shop that you know and trust will fix your car with your interests paramount in their mind, not one who must "play ball" with your insurance company or lose their membership on the approved repairer list.
One way to find out whose side your body shop is on is to ask them if they will ask you to sign two forms. One is called a limited power of attorney and the second is called an assignment of proceeds. Please read on and Alan will explain very clearly why this is so.
Getting an insurance company to "approve" proper repairs to a collision-damaged automobile is the toughest part of the collision repair industry.
First of all, in a legal sense, the insurance company really has no right to dictate or blueprint a repair process. Their responsibility to the customer is to pay for property damage, not determine how the vehicle is to be repaired. The insurance company makes money by taking in premiums and investing these premiums. Any damage claim payouts are expenses and like any company, controlling expenses is a top priority.
This creates a conflict of interest when the insurance company is allowed to participate in the repair process. Contrary to popular belief, insurance companies do not look out for your best interests; they look out for their own best interest. This scenario leads to an adversarial relationship between insurance companies and honest repair facilities.
Dishonest or unethical repair facilities view the insurance company as their customers and you as a product. They will repair your vehicle however the insurance company instructs, regardless of quality or the resulting structural integrity of the automobile. They want to keep the insurance company happy so they keep getting business referred to them. It's a great arrangement for everybody except the vehicle owner. An ethical body shop will repair your vehicle properly regardless of the insurance companies' suggestions otherwise. In the past, we would have to just "absorb" the difference between what the insurance company "allowed" and what it really cost to repair your car.
Enter now a powerful couple of legal documents called the limited power of attorney and the assignment of proceeds. The POA is exactly what it says it is. It gives the repair facility the power to initiate legal action or collection efforts on your behalf. No, we can't steal your house or take over your bank account, the limited POA is specific to the insurance claim ? Remember, in a legal sense the shop has no legal connection with or obligation to the insurance company. Our contract (signed repair order) and responsibility is with you, the vehicle owner. Therefore, you are still financially obligated for the monetary difference between what the company allowed and the true cost of the repair.
A POA allows me to repair the car properly, deliver the finished product to you and then begin collection efforts on your behalf. Odds are you'll never hear about the claim again.
The AOP is actually a document that "assigns" your contractual arrangement with the insurance company to the repair facility, which then gives us legal standing to sue this insurance company directly. This "connection" must be established to allow the shop to sue for "breach of contract." When an insurance company fails to adequately compensate for property damage, they have breached their contract with you. The AOP extends this contractual obligation to the repair facility.
With all of that being said, here's the reality of the situation. We are most likely never going to use these documents. The power of these documents is the knowledge that they exist. Reaching an agreed repair dollar figure is a negotiation and a negotiation is a battle of wills. You don't want to enter any "battle" without the proper weapons and knowledge.
The AOP and POA are the most powerful weapons the repair facility has available to it. When confronted by a mugger with a knife, just showing the dirty no-gooder your gun is enough to deter further aggression and typically end an ugly situation and you walk away the victor, not with any illicit gains, but just with what was rightfully yours to begin with. This is the exact same thing we use the AOP and POA for.
Simply by brandishing these powerful weapons, the muggers (insurance companies in this case), recognize a losing battle and retreat. No insurance company wants to have their dirty little secrets exposed in court. They know they can't win because the facts and truth are on our side.
The result is, these couple of signatures you gave me makes me David to the insurance companies Goliath.