Insurance scam?

Factual Questions
1

I got into a bit of a fender bender two weeks ago, and just got my estimate back from my insurance company. Seems there is over $1,000 of damage, or at least, they think there is over $1,000 of damage to my car. This seems to be quite high, as all that happened to my car is the following:

Broken headlight.
Hood won’t close.

That adds up to $1,000?!? Not that I’m complaining, as they wrote me a check on the spot. But here’s my question (general in nature).

Can I take this money and run, or do I HAVE to fix everything that they think I need to get fixed? If I have a friend who’ll do it for 1/2 the estimate, can we split the money? I mean, I bought damage insurance, I didn’t buy repair insurance. Can anyone fill me in on details that I seem to be missing? Thanks.

2

AFAIK you are not obligated to make the repairs (although for safety or inspection reasons you may have to). Alternatively–you can find a cheaper mechanic or make the repairs yourself if you are able and pocket the remainder. Insurance companies (at least where I’ve lived) may dictate that you have to get the estimate from an authorized garage but you don’t have to get the repair there.
Friend of mine was rear-ended and her mechanic’s estimate was $500 below what the state farm mechanic’s was. Then her dad replaced the shocks himself and hammered out the bumper and she came out with an extra $800. Coincedentally, state farm’s estimate was about $5 above what was required to be paid out in order to cause a premium increase for the offending driver.

3

If your hood won’t close, then something is bent, and you’d be surprised at what it costs to get it straightened out, particularly if it’s the frame.

Also headlights now come in integrated packages, which can easily cost a couple of hundred dollars each.

So $1,000 for a fender bender isn’t out of line.

As far as I know, what you do with the check depends on the company. Some of them issue checks made out to the policy-holder AND the body shop, so each of you has to endorse it. That’s supposed to provide some assurance that you got the work done to your satisfaction.

Other insurance companies do their own estimates, and write you a check based on their estimate. If you can get the work done for less, more power to you. But you’ll have to talk to the company rep to get clear on that.

Assuming you actually want to get the car repaired, I’d recommend talking to a body shop you trust (or getting several estimates) before you start dreaming of that vacation in Hawaii. Car repairs aren’t cheap.

4

One caution in pocketing the difference is once the check is cashed, the insurance company’s liability may be settled. If there is something else wrong that the original estimate missed, you’re probably on your own. If you negotiate the check through the authorized repair shop, any additional defect found is usually covered by having the mechanic contact the insurance firm directly with the added estimate. With the hood not closing, I agree with kunilou, straightening out metal is costly, and you don’t want to risk finding out that the frame is broken rather than bent…total city then.

5

I used to do estimates for Maaco Autopainting and Bodyworks. They are a franchise operation, so though your experiences may differ, we ran a very professional shop and did excellent bodywork. There were reasons for the price difference between us and our nearest competitor, but those are not related to the OP.

First, as to the $1,000 estimate. If you lost a headlight and your hood won’t close, you can feel pretty lucky that that is all it will cost. Mind you, it is very possible to have had a less costly accident with similar symptoms, but a thousand dollars does not sound exorbitant , and I would not be surprised to find the price much higher. Why? First, as has been mentioned, the cost of the part itself. I don’t know the type of car nor the actual extent of the damage, but across a wide range of parts, headlight assemblies get pretty expensive. Blame GM et al for that one. Also blame them for selling the assembly, bezel, side lamps and mounting kits separately. Sure makes sense if you only need to replace one part, but in an accident most parts suffer damage.

So, now you have a couple hundred dollars worth of parts, now you have to put them in. Easy, no? Of course not. There are exceptions, but in general there several parts that must come off of the car to install an assembly. Skirting, grills, etc. Sure it seems like simple work, but you are paying a professional bodyman to do it. Replacing headlamp assemblies also means aiming the lamps, again something you might be able to do on your own but are paying a bodyman to do it. All in all, you could easily be looking at 1.5 to 2 hours for a headlight replacement. I’ve seen book times for cars with lamps so buried in the body that the estimates range from five to ten hours. Yikes.

So already, you are easily in for three to four hundred dollars. But wait, there’s more! You said you hood wouldn’t shut right. Now we enter the realm of infinite possibilities, 'cause without seeing the car I can’t say diddly about what the cost to repair it is. But, I can say a few things. In looking at your car, I’d inspect the hood itself, the hinges and the radiator supports. You got hit hard enough to bend something, so it is probably a combination of these (or more). Setting it up to take measurements, bending what can be bent, and aligning the hood can take several hours. Or maybe the top brace of the radiator support is tweaked and needs to be replaced? It doesn’t take much - especially if you are getting an insurance estimate. If a support structure’s integrity is in question, they can open themselves up to quite a bit of liability if they ignore it.

What about painting? Is there any metal damage on the outside of the car? That could run you quiet a bit of change right there. Sure they can mix the factory color of your car, but your car’s been out in the sun since it left the factory. Don’t want a bright shiny piece of fender next to a duller hood. Again, you are taking a professional’s time to match, blend and apply paint.

Yeah, a thousand dollars is a lot of money, but not necessarily out of line with the damage you described. I’ve spoken in generalities here, so you may have to use your imagination to see the costs in your car. Now, about the check itself. This frequently made my customers quite happy, especially when they got an estimate from their insurance company, and brought their check to us.

Again, speaking in general terms, if you own the car, it is up to you to decide what to do with the money. They are paying for the damage to the car, not to have it fixed. You may have a thousand dollars in your pocket, but you also have a dented hood. You can buy the parts and pay yourself to fix it, too. If you are still making payments on the car or leasing it, the check will almost invariably be made out to you and the bodyshop, 'cause you are not the only one who owns the car.

If you decide to pocket the money, you should be aware of one thing though. In the future, if you get into another accident the insurance company can ask to see proof of repair. Say someone pushes the N*Sync boys in front of your car next month. They can (and have) deducted from the new estimate for preexisting damage. Even if your headlight gets broken in another place, you can’t ask them to fix what was already damaged.

Good luck with your car. Hope this has helped. Any other questions, let me know.

Rhythm

6

I was an adjuster for 5 years. I can answer this one.

IF the check is made out to you and only you, you can do whatever you want: repair the car, spend the money on dope, burn it, whatever.

The only problem I can see is if your friend doesn’t fix it right. Let’s say you pay him $500, then blow the rest. Then, 2 weeks later, you realize that it is still not right and you want to take it to a body shop. Well, you are goin to be paying out of pocket for the rest.

Auto repair for accidents is highly standardized. There are manuals and software that is generally shared in the industry. Most likely what will happen is they will get the car apart and then find out the the Hooziwatz is out of wack nd you need a new thingamajigger. Then you will have to ge tthe insurance copany to cut another check.

Cashing the check does not waive any duties owed by the ins. co. This is a first party claim and they owe you the highest duty to fully indemnify you for your loss. It is very common to issue 2nd and third checks on a first party property claim.