Collision Repair Industry Faces Insurance Underfunding and Pushback on OEM Procedures

Collision repair shops are increasingly facing challenges with insurance reimbursements, specifically pushback on rates, adherence to Original Equipment Manufacturer (OEM) repair procedures, and claim estimates. This pushback complicates operational processes and raises concerns around consumer safety and trust in the claims and repairs ecosystem. The Society of Collision Repair Specialists (SCRS) emphasizes the importance of educating consumers on the repair and claims process to ensure safe repairs and proper reimbursement. Repairs frequently face underfunding as consumers often believe insurance estimates are final and fully accurate, which is not necessarily the case. Repairers must adhere to OEM procedures that might be omitted or undervalued by insurers, leading to disputes over necessary procedures that insurers may deny by omission rather than outright rejection. Higher deductibles increase the financial burden on consumers, which exacerbates tension in the repair and reimbursement process. Repairers carry professional liability and must base repair work strictly on OEM standards, documenting thoroughly and communicating clearly with vehicle owners. Written denials from insurers should be requested to justify refusal of OEM-required procedures, enhancing accountability. Industry-wide alignment on adherence to OEM repair instructions is advocated to reduce improper reimbursements. Shops across the U.S. report ongoing conflicts with insurance companies over fair compensation. Effective communication with customers is critical, particularly engaging consumers early to forestall disputes. Some repair businesses use extensive documentation, including photos and videos, to justify charges in line with OEM guidelines and to aid consumers through appeals processes. Independent shops note the survival challenge posed by higher deductibles and insurer short payments, stressing the utility of consumer education and documented appeal resources. Several shop owners recommend incremental changes, including educating staff on consumer protection laws, to better equip customers in dealing with insurers. Technological tools, such as CollisionClarity software, are being deployed to provide transparent, documented repair evidence to support reimbursement and consumer trust. Industry experts stress full transparency throughout the repair and claim settlement process as fundamental to sustaining the collision repair market amid these challenges.