Back in March, I was in an accident with my new car (the curse of buying new, right?). The estimate was $5550 with a $500 deductible. The appraiser came out, agreed with the $5500, the car was repaired, the body shop got their $5550, I paid my $500 and got my car back.
Now I’ve gotten a “Corrected Supplement S1” statement from the insurance company with a check in my name for $1274! Why?
The corrected statement says that they underestimated the damages. Instead of $5500, it should have been $6829. Why did they send me a check in my name? It would make sense that I should give the check to the body shop, but my husband wants to hold on to it until or if we hear from them. Then, right before the check is to expire (one year, in this case), we put it in our account. I don’t feel quite right about it.
I’ve never had an accident before, so I’ve never dealt with insurance companies. Why did they even do a corrected claim? Did the mechanic ask them to?
You can call them and ask them why. This may get them to realize they made an error and ask for the check back.
You can go ahead and cash it and if they realize their error, they will come after you for the money.
When I used to work for an insurance company, I got a call just like that. A man was wondering why he got a $700 check from us. It turned out we had been overcharging him on his home insurance for 5 years and someone found it and corrected the error.
And sometimes if you call an insurance company and ask why they sent you a check, they’ll say “oh, sorry, our mistake.” But they let you keep it anyway. It’s happened to my brother, who was explicitly denied coverage for some medical service, but when the service provider sent in the claim, the insurance company paid it. When my brother called to remind them that they said they wouldn’t cover it, they said, “you’re right, but we won’t take the money back.”
I think I’m more worried about the body shop contacting us for the money than I am the insurance company. They were mentioned on the claim as the repair shop, but they weren’t CC:'d on the claim. So I don’t know if they are expecting it or not. It was dated 4/19/05, so wouldn’t they have contacted us by now if they were?
You’d think so. I’d call the body shop and ask if they got their money. Don’t volunteer that you have a check…just confirm that they were paid in full. Tell them you are just checking up on the insurance company. Then call the company.
(Standard disclaimers about it not being legal advice apply)
Wait wait wait.
Insurance estimation of damages should have very little to do with the body shop performing the repairs. The deal is between you and the body shop, if the body shop wanted more money for those repairs(regardless of what the insurance company said) they would go after you for that money. It is merely incidental that the insurance company paid the body shop directly. Say the repair was $7000 and the insurance estimated it at $5000, then you’re out $2000. In this case it’s pretty clear to me that the actual repair was around $5000 while the estimate was around $7000. The difference is yours, unless stipulated differently in your insurance contract.
To clarify, here’s an example: I crash my car and the insurance company (through a certified repair shop) estimates the damages at $5000. Now, I can decide to ride the bike instead, and the insurance company still owes me $5000. I can get it fixed at a different mechanic/body shop for $1000, and pocket the $4000 difference. I can get it fixed at the same repair shop for less than $5000 by deciding to forego some repairs, or picking cheaper options. The difference is still mine. Since the insurance was for the damage, not the repairs.
So in your case, I don’t know why the insurance company would even inform the body shop at all? The car is repaired, the bill is paid, everything is settled. UNLESS, the body shop itself said “Oh sorry, we undercharged your customer, please back us up on this that the repairs costed more.” but then they’re on shaky legal ground since everything was already settled, and most likely can’t come after you for the money.
Best bet is too call the insurance company, ask them why they changed your estimate, request a copy of the estimate to be sent to you, and if they say it’s ok, cash the check. It’s probably your money now.
Thanks for all the responses. I’ll call the insurance company. I was just going to wait a couple of months to see if the body shop called us. I wasn’t willing to believe that the money might be ours to keep. I hope it is.
As everyone has written, call first, but groman’s expanation is good. My parents minivan got the rear bumper scraped in a traffic accident. The insurance company paid for it to be replaced, but since it was just a bit of paint, and since my dad had put a hole in the front bumper earlier turning around in a Vancouver alley, they got the front bumper replaced instead and touched up the rear bumper themselves.
They could just have easily decided to spend the money on a hundred pine tree air fresheners if they wanted - if the insurance company really figures they owe you more, and the repair shop has been paid in full already, it’s your $$$. I recommend vanilla scent.
I’m in a very similar situation. New car, accident, repair, deductible…all over right. Nope, we got a check specifying that according to some lawsuit (sorry don’t have the letter anymore) they are required to pay me for loss of value to the insured vehicle.
It’s like this, you and your neighbor both buy the same make/model/etc. new car at the same time, put the same mileage on them and decide to sell them at the same time…but yours has been in a wreck, where insurance paid a claim. Well, since that information is stored along with your VIN, then your car will be worth less than another similar car never involved in a wreck.
Apparently some entity sued the insurance companies to get this through. I don’t know if it applies to all states or companies. I’m in GA and use State Farm.
I used to have an old Ford Escort hatchback. The car was a piece of crap, but it ran. Over the 2 years that I owned the car 3 people hit it. No fault of mine, just people screwing up and hitting my car.
Each time I would get estimates, have the adjustor check it out, etc. And each time I got a check from the insurance companies. And each time I used a ball peen hammer to effect the repairs myself.
Georgia is the one state that requires payment of Diminished Value for an insured vehicle. DV is a viable issue in other states, sort of, but GA won’t let insurers exclude it from Comprehensive/Collision coverage. It’s all very technical. Have a nice day.
Okay, the insurance company has a big book of values. This damage is worth this much, etc., and so on. The repair shop generally works from the same book. So, generally speaking, the two mesh, you pay your deductible, and there’s nothing more.
Competition exists, though. Around here the offers are “free loaner” or “Home Depot Gift Card” or “We pay your deductible.” Maybe there’s a lot of price competition, too.
Also, the shop may underquote the job when they don’t realize a certain repair is needed. Any good mechanic and body shop will eat additional labor (if it’s only labor) and give you the car back at the pre-agreed price.
So… the insurance company talks to the shop, and the shop wants the business, so the shop agrees to do the job at the insurance company price, maybe even agreeing to eat additional labor just for the work. The insurance company realizes it underpaid. But, since you’re the loss payee rather than the shop, you get the difference. The shop should have no claim.
Finally, being a AAA Michigan member, the one time I had a claim that affected my car’s value, I got a payment directly from AAA (beyond the repair) to reflect that… is that not standard practice?
If you used a company preferred shop (which is what it sounds like since you just gave the shop the deductible) you basically turn over the car, and are guaranteed not to be out of pocket more than your deductible, while garnering an additional warranty for the work backed by the insurance company.
If during the repair process the shop finds undiscovered damage they submit a supplemental repair request and the insurance company sends then a check.
It sounds like they just sent it to you by mistake.
I would call the body shop to see if you have amount still due on the repair
