Smart Auto Insurance Blog

In a Boston Herald editorial, it’s said that auto body shops in Massachusetts are petitioning the state legislature for higher pay from insurers. They are asking that the state require a price floor; body shops would have to charge a minimum labor rate, and Massachusetts auto insurance providers would be required to pay no less than that minimum hourly rate for covered repairs.

The body shops claim that such legislation is necessary in order to keep up with inflation of their actual costs, and point out that their average rate is already under the national going rate for auto repairs (although insurance companies snap back that Mass. body shops also take more hours to fix a car than the national average, evening things out). Such a law would be likely to increase auto insurance premiums for consumers.

Eyewitness 4 News in New Mexico recently highlighted a new trend in auto insurance claims: after an accident, more people are choosing to keep the money from their claim as opposed to using it for repairs. I can see their point; in this struggling economy, it may seem like a better idea to pocket that insurance payout and use it for family needs (like food), instead of non-essential car repairs. As a result, body shops are reporting a 25% drop in repairs across the United States.

However, body shop employee Tommy Hufnagel claims that insurance companies will often underpay consumers when sending them a direct check. If you think you’ll need any repairs at some point (even if your automobile still works right now), it might be a better idea to get a body shop estimate first.