When Cost Defines the Repair, the Consumer Suffers

by Ken Miller, AASP/NJ President

The purpose of an auto insurance policy is straightforward: to protect people in their time of need and provide for the proper repair of their vehicle.

Over time, the policy has changed, morphing into something that no longer embodies what most consumers believe it provides. That change is not just in claims handling; it is in the language of the policy itself.

There was a time when policies referenced payment for the reasonable cost to repair a vehicle. If the repair was necessary and the cost was reasonable, it was expected to be covered. The repair defined the cost. Today, many policies are structured around what will be paid on a claim, not necessarily what is required to repair the vehicle.

For most consumers, that distinction is never made clear until after the loss occurs. And that distinction matters. This framework traces back decades, including provisions such as New Jersey Statute 17:33B-36.1, which was enacted during a time when controlling insurance costs was the primary concern. The problem is that the vehicles have changed. Dramatically. The vehicles on the road today are not the vehicles this framework was built around. Modern vehicles are engineered systems. Structural components, sensors, safety systems, modules, calibrations, mixed materials and advanced steels all work together. Repair is no longer about replacing visible damage. It is about restoring system performance, structural integrity and crash protection. That requires expertise. Determining what must be restored requires training, research and experience. Not all repairers are equipped to make those determinations. Those who are have invested heavily in the tools, training and manufacturer information required to do so properly.

Insurance companies serve a different role. They underwrite risk and pay claims. Those roles are not the same. Consumers would never expect a collision repair facility to determine insurance premiums or underwrite losses. Yet, many consumers unknowingly accept the inverse every day: financial structures and payment limitations influencing repair decisions on vehicles that now function more like computers on wheels than the cars of decades past.

For many consumers, the assumption is simple. The insurer must know the cost because, after all, this is what they do: pay claims. However, the individuals making payment decisions lack the training, expertise and knowledge of repair required to accurately determine cost. The problem is, no one wants to think their insurer is going to short-pay what is required to repair their vehicle properly. Besides, why would they? We pay our premiums on time and have done so for decades.

In many instances, providing proper reimbursement for complete and safe repairs is no longer the norm. It is worth mentioning that payment does not equate to a complete repair, and payment for a complete repair is no longer guaranteed. What does that mean in practice? It can mean consumers are presented with repair decisions they never expected to face. A repair facility identifies manufacturer-required procedures, calibrations, inspections or structural repairs necessary to restore the vehicle properly, while portions of those operations may fall outside what is approved or paid within the claim. The result can place the consumer in the middle of a technical and financial dispute they are not equipped to navigate. At the same time, repair facilities face increasing pressure to align repairs with predetermined financial expectations. Some shops resist that pressure and invest heavily in training, equipment, certifications and manufacturer information to perform complete repairs properly. Others may lack the resources, training or willingness to do so. For consumers, the difference between those approaches is rarely obvious.

That reality raises important questions that need to be asked and answered:

Were all manufacturer-required procedures identified and followed?

Were required calibrations performed and verified?

Were post-collision safety inspections completed?

Or did the repair process begin with a financial target before the repair was ever fully understood?

These are no longer hypothetical questions. They are part of modern collision repair.

To be clear, not all insurers approach claims this way. Some still prioritize proper repair and policyholder protection, recognizing that complete and safe repairs ultimately protect everyone involved. That distinction matters. It proves the industry is still capable of balancing cost management with proper repair. But consumers should understand something very clearly: the policy they believe they purchased and the claim process that exists today may be different than what they expect.

Insurance pays the claim. It should never define the repair.

Want more? Check out the June 2026 issue of New Jersey Automotive!