Their House of Cards Is Crumbling
by Ken Miller, AASP/NJ President
If you have ever felt like you were being gaslighted by an insurance company – told that your OEM procedures are unnecessary – your labor rates are unreasonable or that the damage you are looking at does not actually exist, the recent US Senate hearing led by Senators Josh Hawley and Andy Kim should stop you in your tracks.
For the first time, someone in power said it plainly: The insurance industry has a systemic, deliberate process for underpaying claims. And now, that is part of the official record.
Although the hearing focused on insurer misconduct related to disaster property claims, what was exposed under oath – including pressure on adjusters to suppress estimates, retaliation against those who would not comply and strategic delays designed to wear down policyholders – was all too familiar. These are the same tactics that collision repairers have been battling for decades.
Policyholders and former adjusters testified that they were directed to misclassify damage, underwrite legitimate claims and deny coverage using vague policy language. One homeowner was offered $46,000 for storm repairs independently estimated at nearly $500,000. Adjusters admitted they were ordered to shade the damage or simply remove items from the estimate. If that sounds like a line straight out of a photo-based auto claim, that’s because it is. Insurers use the exact same blueprint in collision repair: minimize the scope, deny the OEM-required operations and pressure shops to work within those limits. They are not adjusting claims. They are managing loss severity, regardless of what is needed for a safe and proper repair.
And it starts early with steering. Before any estimate is ever written, many insurers tell customers they may have to pay out of pocket if they do not choose a DRP shop. How can they possibly know that unless they have already decided to short-pay the claim? It is not about saving the customer money. It is about protecting the insurer’s own budget. These fear tactics are designed to mislead the customer into believing the shop, not the insurer, is responsible for any unpaid amount. It is a form of psychological pressure used to direct work toward contracted shops, where pricing is predetermined and insurer interests take priority over proper repair methodology.
The hearing also revealed the extent to which delay is weaponized. One witness waited more than seven months for their insurer to approve basic repairs. In our world, the timeline is often shorter, but the intent is the same. Collision repairers experience unjustified delays on a daily basis. Estimates sit unacknowledged, supplements go unanswered, and approvals are slow walked. Storage accrues, then the insurer refuses to pay it. These are not simple inefficiencies. They are strategic stall tactics used to shift the burden onto repairers and policyholders. Insurers know that customers need their vehicles back, and they count on frustration and financial pressure to force a concession. Whether that concession comes from the shop or the customer does not matter, as long as the claim costs less.
We also saw the industry’s habit of punishing professionals come to light during the hearing. Adjusters who refused to comply with estimate suppression were reassigned or terminated. This was not subtle. It was systemic. Collision repairers have experienced this same retaliatory pressure for years. If you follow OEM procedures, you are labeled “difficult.” Use your posted labor rate, and you are suddenly out of market. Push back on a denial, and you are discredited in front of your own customer. And the most dangerous part is this: repairers hold the liability for the outcome of the repair, even when insurers refuse to pay for required operations. If something fails after the vehicle is returned, the insurer is not the one getting sued. We are.
This tactic is not exclusive to independents. Even insurer-contracted DRP shops are feeling the squeeze. The pressure to conform to lower pricing, faster turnaround times and shortcut-laden procedures is mounting. When DRPs agree to these terms, they are not just tightening their own margins. They are being used to establish an artificial pricing baseline that insurers will try to impose on the rest of us. That is not market influence. It is market manipulation.
What is different now is that these practices were finally aired out in the US Senate. For years, our industry has spoken out about these tactics, only to be ignored or dismissed as exaggerations. Now, they have been exposed under oath, documented in public testimony and acknowledged by former industry insiders. The same methods we have fought to resist, including estimate suppression, steering, retaliation and denial, have finally been validated in front of a national audience.
This moment matters, and we need to make the most of it. Every delay, denial, steering attempt and suppression tactic should be documented. Every customer should be educated. Use the hearing as a tool. Help customers understand that when they are told they will owe out of pocket before anyone has even looked at the car, it is because the insurer already plans to underpay. Let them know that the fight is not between them and their chosen repairer; it is between them and a system designed to reduce their claim, regardless of the facts. And remind them that we, the repairers, are the ones who ultimately hold the liability. If we cut corners, even at the insurer’s direction, we are the ones who are responsible.
We must continue to support legislative and advocacy efforts to reform the system. It will not change unless we demand it. We must continue to set and uphold the standard of complete, safe and proper repairs. The insurers have long depended on customer confusion and repairer silence. That silence is finally breaking, and it is our job to make sure it never returns.
Want more? Check out the June 2025 issue of New Jersey Automotive!