Why is your auto insurance company sending you to a preferred supplier?
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You may be familiar with the following scenario: you are involved in a collision, you make a claim with your insurance company, you are declared not at fault and get the green light to repair the vehicle at the expense of the company, then you gives you a list of auto repair shops who can do the job.
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In the above scenario, your insurance company is not only useful, it is strategic. When it pays to have your vehicle repaired, he has a vested interest in the work being done. And that is why he will often refer you to what is called a “preferred supplier”.
Reliable and pre-approved
A Preferred Supplier is an auto repair shop pre-approved by your insurance company that participates in a Direct Repair Program (DRP). Most stores would probably jump at the opportunity to participate in a DRP as it is a guaranteed income for them.
One of the reasons insurance companies try to direct you to favorite stores is because they try to mitigate cases of fraud.
In 2018, Aviva Canada conducted a covert investigation that found that some auto shops in Ontario intentionally damaged cars, installed used parts while they billed new ones, and billed for ‘ghost repairs’ or repairs that didn’t. had never really happened.
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In order to uncover these results, Aviva deliberately crashed 10 private passenger vehicles in crash scenarios and discovered that about half of the repairs submitted by auto shops in the study were fraudulent. In fact, only one of the 10 stores in the study acted honestly. This was costing the insurance company hundreds of millions of dollars each year and no doubt results in higher auto insurance premiums for customers.
To mitigate fraud, some insurance companies have even gone so far as to host their own repair shops, as TD Insurance does in its TD Auto Centers. Here, drivers can file a claim, speak to an advisor, have their car repaired, and reserve a rental car, if applicable.
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Can I use another body shop?
You are not legally required to use the auto repair shop recommended by your insurance company, but it may be in your best interest as it can simplify the process.
With Preferred Body Shops, the shop and the insurance company are in direct communication with each other. The work performed by these workshops is guaranteed by the insurance company, the repair estimate is sent directly to the insurance company appraiser and no additional estimate is required.
Insurance companies endorse certain stores because they have a reputation for honest work, are competitively priced, comply with all regulations, and their procedures and equipment are industry approved.
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With that said, it’s important to understand that using a preferred supplier also means that your insurance company has a say in how your car is repaired. So if, for example, you would like to make other repairs that do not fall under the insured damage, you will have to negotiate a quote for those repairs yourself with the store, and you will have to pay out of pocket for them as well.
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