When a driver has informed their insurer of damage to their property, the insurer may provide a recommendation to a specific auto body shop to complete the estimates and repair the damage.
However, the driver has the right to accept the recommendation, or to choose a different service provider of their choice. Insurers’ recommendations come from private service agreements between the insurer and service provider and are used to control claim costs and ensure quality customer service. These agreements are not regulated by the Superintendent of Insurance, or the Automobile Insurance Rate Board and insurers are merely providing an option for the driver.
Insurance Act: Fair Practices and Regulation
Regulations under Insurance Act address the consumer’s right to choose their service provider. Section 3 of the Fair Practices Regulation discusses “Disclosure of insured’s right to choose service provider” and states:
“Where an insurer, insurance agent or adjuster is notified by an insured of a loss respecting damage to property and the insurer, insurance agent or adjuster recommends a particular service provider to the insured, the insurer, insurance agent or adjuster must advise the insured in writing, at the time of the recommendation, that the insured may have the repairs estimated and completed by a service provider of the insured’s choice, except where the insurer exercises its right to undertake the repairs.”
Insurers are not allowed to force drivers to pick to a specific service provider, and they must inform drivers on their right to choose in writing.
What happens with claim disagreements between insurers and consumers?
Insurers and consumers cannot dictate a claim amount for damage repairs individually, but they may negotiate to determine a fair amount. When a disagreement occurs on the claim amount, the dispute resolution process (DRP) is used. A disagreement may occur if a consumer does not choose the recommended body shop and the insurer disagrees with the estimate from said body shop. The DRP can then be used to establish the fair cost of repairs, and if it is determined the body shop’s estimate is fair, the insurer must pay the driver that amount.
Dispute Resolution Process (DRP)
Section 519 of the Insurance Act sets out the DRP process. In the “Notice of dispute resolution process” section, the Act states:
An insurer must give written notice to the insured of the dispute resolution process
- within 10 days after the insurer determines that a dispute has arisen between the insurer and the insured…or
- within 70 days after the insured has submitted proof of loss if the insurer has not yet made a decision as to the validity or the amount payable in respect of the claim.
If an insurer does not follow the Act explained above, a consumer should contact the Superintendent’s office at [email protected], or by phone at 780–643–2237.