Bankrate article gives consumers clearer picture of how insurers are increasing short payments for collision repair

A recent Bankrate article written for consumers outlines how insurance companies are increasingly refusing OEM collision repairs. 

“Imagine you get into a car accident: You dust yourself off, check the damage, maybe snap a picture or two. Then you call your insurance company,” the article says. “You start a claim; you take your car to the shop. Once your insurance adjuster and the body shop have taken care of everything, you’re only responsible for your deductible. You pay that fee, take the keys back from the body shop, and drive off in your car.” 

It says that’s how insurance is supposed to work, but in recent years, more consumers are hearing that their insurance won’t cover everything they thought it did. 

“The problem comes down to a disagreement between repair shops and insurance companies over what is — and what isn’t — necessary for auto repairs,” the article says. “One key point of contention is the safety inspections required by auto manufacturers in the post-collision repair process, which more and more insurers are refusing to cover.” 

Earlier this year, Montana attempted to pass a bill, SB356, that would require insurance companies to cover OEM procedures. 

During a Senate hearing, Greg Van Horssen, a State Farm representative, argued against the bill, saying the insurance company does not support “position statements, general checklists, or safety inspection checklists because they are general.” 

A 2023 “Who Pays for What?” survey found insurance companies always paid for safety inspections about 36% of the time. 

Bob Passmore, American Property Casualty Insurance Association (APCIA) personal lines vice president, seemed to echo what State Farm said during the Montana hearing to the Bankrate reporter. 

“Insurance and repair shops really have the same goals,” Passmore said. “They want to provide a quality repair, a safe repair, and a cost-effective repair — and a good experience.”

He dismissed concerns Bankrate heard about insurance companies refusing to cover certain procedures listed in OEM repair instructions. He said shifting responsibility for full payments onto insurance companies would drive up the cost of car insurance. 

“Half of this stuff is either vague or non-existent,” Passmore says. In his view, it’s “really only used by some shops to create leverage for a higher repair bill.”

But many OEMs, such as GM, have very specific repairs and inspections required after a collision. On minor collisions where no damage arose beyond “minor outer body panel cosmetic distortion,” the repairer would still have to conduct a mandatory seven-step seat belt check, but the shop could forgo other inspections and part replacements. If the damage exceeded the “minor” threshold, then multiple additional safety operations become mandatory, according to GM.

Bankrate spoke with a repair shop in Kansas where a 2021 Toyota Tacoma was brought with undeployed air bags. Toyota requires a post-collision safety inspection of the air bags. 

The procedure requires the shop to remove multiple trim panels inside the vehicle to perform manual and visual inspections of the air bag, along with other safety-related items, the article says. However, the insurance company won’t pay the shop for the labor required to remove the panels. 

“They told us the safety inspection was ‘unwarranted’ because the air bag did not deploy,” the anonymous shop owner told Bankrate. “Those were the words that they used in their email.”

Bankrate notes that if the shop completes the required inspection, they’ll either have to do it for free or bill the consumer. The third option is not to complete the repair. 

The shop told Bankrate they’ve received backlash from customers when asked to pay for the procedures that insurance wouldn’t cover. 

“It really hurt our business,” the owner says in the article. “We started hearing comments like, ‘Don’t go to that shop — they’ll send you a bill.’”

The business now writes off a significant portion of its business not to anger customers, the article says. 

There are serious concerns with not completing a repair, including safety issues, the article says. If safety inspections aren’t completed on the Toyota currently sitting in the shop, it could fail in a future crash and cause serious injuries or even death. 

In 2024 Tyler Smith, owner of Rick’s Paint and Body, a Lexus-authorized collision center in Augusta, Georgia recounted requirements on the Toyota Camry and Lexus ES 350, which call for air bag inspections, even in non-deployment crashes. Smith detailed examples where inspections led them to find numerous vehicles where the head airbag was deformed, acknowledging that had the inspection not been performed, the deformities wouldn’t have been found since Smith said none of the vehicles showed related warning lights on the dash or diagnostic trouble codes.

“Even more concerning is the silent cascade of safety issues that could arise” if shops start cutting repairs, the article says. 

“There’s really no way to track how these cars were repaired,” the shop explains. “Once they’re back on the road, the safety risks might not become apparent until it’s too late.” 

They told a story about finding a missing air bag following a crash. Another repairer had put a piece of cotton behind the dashboard. 

“There was an empty hole where the air bag should have been, and this guy’s 20-year-old daughter in college was driving this around,” the shop told Bankrate. 

Last year, the National Highway Traffic Safety Administration (NHTSA) urged used car buyers and owners to be aware of “cheap, substandard” replacement air bag inflators that can cause death or serious injury. 

Repairer Driven News previously reported on a lawsuit filed by the estate of a Florida mother of two who was killed under similar circumstances.

Destiny Byassee was killed in a June 12, 2023, collision driving her used 2020 Chevrolet Malibu when a counterfeit front driver-side air bag “detonated like a grenade and shot metal and plastic shrapnel throughout the vehicle cabin,” according to the suit.

The Collision Industry Conference Industry Relations Committee presented an investigation into post-repair inspections. It found 90% of the vehicles were totaled following the post-repair inspection, and about 50% of the vehicles had significant frame damage. 

Shops also face liability issues for not properly repairing a vehicle, Bankrate reports. 

Discussions about substandard repairs ramped up following a Texas lawsuit against John Eagle Collision Center for an improper repair in 2017. A jury found the shop liable for the injuries Marcia and Matthew Seebachan sustained from being trapped inside the burning vehicle following a crash.

“Everyone in this equation agrees that the car should be repaired,” the Bankrate article says. “But nobody, from the manufacturer who built the car to the consumer driving it away, wants to pay.” 

The article outlines that the disagreements in the claims aren’t new, but they are increasing.

Andrew Batenhorst, Pacific BMW Collision Center’s body shop manager, told Bankrate he’s seen an increase since about 2021 during the post-pandemic era. 

Jerry McNee, owner of Ultimate Collision Repair in Edison, New Jersey, and former president of the New Jersey Alliance of Automotive Service Providers (AASP/NJ), agrees but says tactics have become worse in the past two years. 

The article talks about how the COVID pandemic “squeezed” insurance company budgets, and vehicle repairs are becoming more complicated, noting the requirement of ADAS calibrations. 

Collision repair shops are often up against giant insurance companies, the article says. 

“Take State Farm, for example. State Farm is the largest provider of auto insurance in the United States,” the article says. “In 2024, State Farm earned $442,744,583 in personal auto insurance premiums in the state of Kansas alone, according to SERFF filings — one drop in the 48-state bucket of $69 billion in earned premiums that State Farm reported in 2024. But in the CRASH Network survey of repair shops, just 29.2 percent of repairers working with State Farm reported being paid all or most of the time for OEM-required vehicle safety inspections — a lower percentage than any other major insurer.”

Last month, Sen. Josh Hawley (R-Missouri) grilled Allstate and State Farm executives during a subcommittee hearing about evidence that he said made it appear the companies were “running a racket” in their response to natural disasters. In contrast, their executives were paid in the millions.

“I have to notice that your profits have never been better, they’re really quite extraordinary,” Hawley said. “Fiscal year ’24, Allstate had $64 billion in revenue; that’s 12% above the previous year. You made $4.6 billion in profits, and your CEO, Tom Wilson, last year was paid $26 million, while Miss Migal can’t get her claim paid out, but Tom Wilson, whoever the heck he is, gets $26 million.”

The top five paid property and casualty insurance executives made more than $114 million in 2024, according to a list compiled by Business Insurance.

An S&P Global article from late last year also found, P&C insurers have outspent health and life insurance peers in lobbying the U.S. government over the past ten years. 

Bankrate reports that this leaves repair shops and their customers without a lot of options. 

“If a carrier refuses to pay for certain repairs, claimants may be stuck either paying the extra bill out of pocket or accepting the risk of skipping OEM procedures,” the article says. “Aside from those options, the only other recourse some customers have is to sue the insurance company — an expensive and time-consuming option that few people want to risk.”

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