Car lifted up for repair.

Fraud in Collision Repair

Fraud in collision repair is all too common in the industry. While most repair shops play by the rules and work hard for their customers, there are some that are out to take advantage of customers’ lack of knowledge about the repair process and how it should work. As an insurance agent or adjuster, you can help customers avoid getting scammed by providing them with some simple information. When customers are tricked into insurance fraud, it hurts the insurance company – which ultimately affects the insurance rates of every customer! When customers are empowered enough to avoid suspicious and irreputable repair shops, everyone wins.

Below we have listed some of the most common types of fraud in collision repair, so you can help guide customers away from these hazardous traps!

Tow Truck Scams

We’ve talked about this before in our post about Car Towing 101, but it’s worth mentioning again: customers should be extremely cautious of tow trucks that show up at the scene of an accident, unsolicited. This is a tactic used by illegitimate towing services to scam them and their insurance company out of money! These fraudsters show up on the scene when customers are still frazzled from an accident, in need of help, and use their disorientation against them! These types of scammers may try to charge them bloated fees, towing them to repair shops that will continue to add fee-upon-fee to the final invoice.

This leads us naturally into…

Inflated Damage Estimates

Whether customers were towed to an untrustworthy shop or they accidentally stumbled upon one of their own, be on the lookout for inflated damage estimates. Some less-than-reputable repair shops will attempt to adds costs onto a customer’s repair bill, hoping that the driver and their insurance company never notice. This can include costs for services never rendered and parts that were never installed! If you feel that an estimate seems high, be sure to look it over and make sure that nothing seems out of place or suspicious.

Burying the Deductible

Some repair shops will offer to bury deductibles in the cost of the repairs, so the insurance company foots the entire bill and customers don’t have to pay a dime. This might sound tempting to some, but customers should be aware that sneaky and dishonest repair shops are usually scamming everyone involved. That’s what makes them sneaky and dishonest! While they’re charging the insurance company the price for new parts, the customer is actually receiving cheaper or junk parts that could cause them major problems down the road! Customers shouldn’t risk it. If someone is offering a deal that sounds too good to be true, it likely is.

Airbag Fraud

Accidents happens, airbags deploy, and that means that they will need to be replaced. Fraudsters will attempt to install a used or stolen airbag into a car – which they will have paid very little for – and then charge the insurance company for the amount of a brand new airbag. This is as sneaky as it can be dangerous! If customers want to be cautious, they can ask to see the airbag (factory sealed) or check their invoice to see which manufacturer it was purchased from.

Another form of airbag fraud is related to something we already discussed: inflated damage estimates. Some shops will attach a deployed airbag to the front of the steering wheel, trying to create the illusion that the airbag was deployed when it was not. They then charge the insurance company for the installation of a new airbag, tucked into your overall estimate. Whether you’re the customer or the insurance agent, be aware of what’s added to an estimate and be sure that everything seems correct!

How Can Customers Avoid Fraud in Collision Repair?

• Encourage your customers to trust their instincts. If a shop seems dirty and disorganized, it might be better to move on. Customers should work with shops that are professional and orderly.

• Tell your customers to ask for a written estimate before the work begins. If they have any questions about the services included on their bill, let them know that you – as their insurance agent or adjuster – can be a resource to them.

• Only work with repair shops that are accredited with the ASE and other reputable organizations. As an insurance agent, you can encourage your customers to get an estimate from Schaefer Autobody and other honest shops!