What If Insurance Won’t Pay the Repair Shop’s Quoted Price?

Auto insurance companies and repair shops rarely agree on costs. If your auto insurance company won't pay the repair shop's quoted price, the company will usually renegotiate with the mechanic. If your insurance refuses to pay the repair shops' quoted price, you can either choose to go with a different mechanic or pay the difference out of pocket.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Mar 30, 2021

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Sometimes, a mechanic and an insurance company will dispute the cost of repairing a vehicle. An insurance company might claim that the repairs should cost $1500, for example, despite the fact a repair shop is quoting you for $2500.

What happens when an insurance company won’t pay the repair shop’s quoted price? How can you get your insurance company to accept the repair shop’s quoted price? Today, we’re explaining everything you need to know about disputed estimates and car insurance.

Auto Insurance Companies and Car Repair Shops Frequently Disagree

First, let’s establish something: it’s not rare for car insurance companies and car repair shops to disagree about the cost of repairs.

A car insurance company’s goal is to pay the lowest amount they are legally required to pay on your claim. This means the car insurance company will push to have the cheapest repairs possible performed on the vehicle while still fulfilling the terms of your contract.

In many cases, this leads to a dispute. The car insurance company claims the repairs should cost a certain amount of money, while the auto body shop claims the repairs should cost more than that.

This is not unusual. In fact, some insurance industry experts claim it occurs on most insurance claims. Car insurance companies and body shops frequently disagree about the cost of repairs.

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Why Do Car Insurance Companies and Repair Shops Disagree Over Cost?

Car insurance companies and repair shops frequently disagree over price estimates. The reason is simple: repairing a car can be a complicated process. Some damage to the vehicle may have occurred prior to the insured incident. The insurance company is not legally required to repair this damage, but it may be impossible to repair the vehicle adequately without repairing previous damage.

Some of the reasons for disagreement include:

Whether a Part Can Be Fixed or Needs Replacement: The insurance company might claim that some parts of your vehicle can be fixed. The repair shop, meanwhile, might insist that the part should be replaced. This is a common source of disputes.

Type of Replacement Part: Some insurance companies will refuse to pay for parts from the original manufacturer. Instead, they will encourage the repair shop to use a cheaper, aftermarket version of the same part.

Duration of Repairs: A repair shop might claim that it will take 4 hours to fix a dent on your car’s body. The insurance company, meanwhile, might disagree and claim that it should only take 2 hours. This leads to a dispute over the number of labor hours the insurance company needs to pay.

Labor Rate: The insurance company might have a defined per-hour cost for car repairs. Some repair shops exceed that expected cost, leading to a mismatched estimate.

Other Errors or Disagreements: Sometimes, the repair shop has made a mistake and is repairing something it does not need to repair. In other cases, the insurance company is refusing to cover something it is legally required to cover. Mistakes and omissions can lead to price disputes.

What Happens After a Disagreement Between the Insurance Company and a Repair Shop?

When a car insurance company and a repair shop disagree on a quoted price, they begin the negotiation process.

The car insurance company is legally required to cover the cost of repairing your vehicle to its pre-loss condition – according to the terms of your insurance contract. They will negotiate with the repair shop to ensure they are getting a fair deal. They will ensure that the car is being repaired to its pre-loss condition using standard parts. They will ensure that the mechanic isn’t inflating costs or fixing damage that occurred prior to the covered incident.

Typically, disagreements are solved quickly. The insurance company and repair shop go back and forth. Sometimes, the policyholder is involved in the process. In other cases, you have nothing to do with this process.

What Happens If Your Insurance Company Refuses to Pay the Estimated Price?

In rare cases, the negotiation process between your insurance company and the car repair shop will fail, and your insurance company will refuse to pay the estimated price.

If the insurance company refuses to pay the estimated price at your chosen repair shop, then they will typically identify other local repair shops that will perform the repairs at their estimated price.

In this situation, you have two options:

There’s also a third option: you can take your insurance company to arbitration. Insurance contracts have an arbitration clause that allows you to dispute the insurance company’s estimate. If the insurance company is refusing to cover the estimated cost of repairing your vehicle and is refusing to budge, then you may wish to begin the arbitration process.

Ultimately, it’s not unusual for insurance companies and car repair shops to disagree on a price. When disputes occur, the insurance company and repair shop negotiate to reach an agreement. If an agreement cannot be reached, then you may wish to take your car to a different repair shop, pay the original shop’s difference out of pocket, or begin the arbitration process with your insurance company.

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