Let’s face it. The goal of any good business is to make money whenever they can, and also save money too. This in particular is a delicate balancing act put on by insurance companies. But they do not do this with complete greed in mind, like so many of you would like to believe. Keeping their costs low is huge boon for you the insured as well, because it helps to keep premiums down.
One way insurance companies implement cost cutting measures is by recommending that the people they insure use the direct repair companies with which they are associated. These companies are under contract with the insurance agencies, which allows the agency some perks that they don’t get from a non-contracted repair shop.
The first is the free storage. Let’s face it. Storing a car is expensive, whether it be for an individual or an insurance company. So one of the things in the contract with the direct repairs shops is free storage for the cars they are working on. You may not even realize this, but this storage fee gets worked into the cost you pay for repairs.
Next is another freebie, and it’s towing. If the direct repair shop ends up towing the car that they later get contracted to work on, the chances of the insurance company ending up paying for the tow truck virtually disappear.
You, as the consumer may not realize this, but it’s a good thing for you too. And I say this because somewhere along the line this fee would get buried right along with a bunch of other things that you would ultimately be paying for in the end anyway. So the insurance company’s deal with the direct repair shop saves you money in the end, which is why it’s truly in your best interest to use the repair shops recommended by your insurance provider. They really do have your best interest at heart.
And what’s the point of making a deal with direct repair shops if there are no pricing concessions involved. It would be kind of foolish, don’t you think?
These contracted repair shops offer discounts on parts and labor in some cases, keeping the costs to the insurance company down where in turn they are not required to pay out as much on their claims.
Right now you might be thinking “Wait a minute. Why is it a good thing for the insurance company to have to pay me less money on my claim?” The answer is very simple. They are only paying you less because the company that did the repairs charged must less than their competitor would have. Do you understand now?
The less the insurance company has to pay for repairs, the lower everyone’s premiums will be. This will always be the case, so it can be smart to work with your insurance company instead of against them. It’s just good business sense. So don’t use people outside of the network because you feel like your freedom is being taken away from you. You are only hurting yourself in the long run.