A Total Loss Shouldn’t Be a Total Loss for Your Shop
by Matthew Ciaschini, AASP/MA President
As collision repairers, we are charged with performing safe repairs to ensure that the vehicles leaving our shops are capable of protecting occupants if a subsequent crash occurs.
But many of us also feel it’s our duty to protect customers from other problems that arise during the repair and claim process, such as when we see them being taken advantage of by their insurance carriers. It only makes sense that we step up and advocate for consumers in these situations because we’re much more knowledgeable about the vehicles, repairs needed and the claims process than the average customer.
Carriers’ tendency to under-indemnify claims seems to be particularly prevalent when a vehicle is deemed a total loss. The insurers’ unwillingness to be forthright about a totaled vehicle’s value is a well-known problem that our industry has contended with for many years. More recently, we have observed some insurers making threats – and following through on those threats – to deduct fees incurred for total losses from a policyholder’s total loss settlement payout.
The insurers’ objections may relate to storage fees or anything else associated with the actions a shop must take when dealing with these total loss vehicles. And although they’re justifying this behavior by citing a ruling that was decided in a Massachusetts court, that case does not appear to set a precedent that allows insurers to determine what is a fair and reasonable amount to pay for storage or any other fees associated with a total loss, as attorney Sean Preston discussed in the February edition of New England Automotive Report (available at grecopublishing.com/near0225legalperspective).
It’s imperative that shops are aware of this issue and equipped to educate their customers about this possibility before the worst-case scenario actually happens. But understand: lessening charges for insurers does not seem like the best solution for the shop as a business. As long as you’ve done your due diligence to understand and document your costs, it’s more than reasonable to expect compensation for the investment you’ve made and the processes you’ve performed!
If you find out that a customer’s insurer has taken money out of their settlement because they don’t want to pay your fees, it isn’t your job to come to their rescue. Many of us feel like we need to paint a big “S” on our chest and be Superman to everyone as soon as we open a shop, but that’s not true. As small business owners, our responsibility is to our business and our employees. It’s a business that is extremely expensive to operate, so we deserve to be paid for work performed.
At the same time, we should be willing to help our customers to the best of our ability without it being a detriment to our own interests. This means educating them as soon and as much as possible. Create templates and literature that you can distribute to vehicle owners to help them understand their rights and how the process works, whether their vehicle ends up being repaired or if it’s a total loss…and directing them to contact a lawyer if they need legal advice. By educating our customers, we demonstrate that we have their best interests at heart, and knowledgeable vehicle owners tend to be better aligned with their shops because they understand what we’re trying to do for them: provide them with a safe, reliable vehicle that will ensure their safety on the roadways.
If you’re not sure where to start, reach out to AASP/MA. We’re here to help shops, and we’d be happy to provide some guidance.
Want more? Check out the April 2025 issue of New England Automotive Report!