Four Speeds and Drum Brakes: An Insurance Tale

Like most drivers, I was surprised by my insurance bills this Spring and it was a negative surprise. Both auto and homeowners went up by nearly 50% but through the magic of the internet I was able to shop around and get both auto and homeowner coverage back to below 2023 prices. I don’t know why I have allowed both policies to come due on the same month because the single payment for each (to get the discount) is a real budget buster. When I called to find out if the bills were a mistake (no claims in the last 10 years) I was told that the company had mispriced the auto policies in Mass that last two years and floods and fires around the nation took out more homes than they expected. There was also inflation that everybody (?) knows is off the chart. Excuses, excuses.

That business about bundling both home and auto to get a better rate is a myth. Auto insurance companies just place the home coverage with some company that you never heard of anyway. If you go direct you can find that no name company and eliminate the markup. Turns out that the arena for vintage car coverage now has a lot of players and some don’t support races or car shows or spend a lot of your premium on advertising. That translates into lower costs.

Two of the cars in my garage are not vintage, they’re just old. The Audi RS4 that sits at the train station all day is now 23 years old and the BMW 6 series is 38 years old. Two others are modern (2014 & 2015) and I’ve discovered that the big guys compete with each other for those cars so the premiums are reasonable. The two really old cars (1957 & 1958) go into the collector category and they’re actually reasonable too. Of course those companies know that you can only drive one at a time and you’re not going to drive them very far. They won’t get left at the train station or the Mall.  Lower risk means more profit for them. There is a reason why the stock in Progressive Insurance has doubled in the last 1 ½ years. Doubled. The reason is greater profits than ever so don’t feel bad for the insurance industry. They do face some head winds doing business and I encountered one last month.

The Macan in the garage got tapped in a parking lot in Medfield back in May. The driver of a Hyundai cut the turn too short coming out of the parking spot and while the Porsche only had a scuff on the bumper cover, the both doors and both quarter panels were kicked in on the Kona (is that really a car?). The driver didn’t stop but drove to the other side of the lot and went into a store. Someone in the coffee  shop called the Police, the driver came out and said she was going into Marshalls to get some paper to leave a note on the Porsche. Yea, right.

It was the kind of scuff that I would’ve waxed off and touched up if the offender was not found but since the other driver was at fault their insurance company was going to get a claim. It looked to me like the bumper cover was going to need some paint but at least it wasn’t cracked or broken. Everything had popped back into place before we ever saw it.

I have been cautioned by my legal team not to mention the names of the actors in this drama since they would probably not want to see their name in print. The offenders insurance company couldn’t have been nicer. They are a national company with a good reputation.  They sent an independent appraiser to my driveway to write up the estimate and like I suspected, figured repairs at something just under $1,000. He left a three page list of approved body shops in Mass but noted that I could take it to the shop of my choice. I have had many cars restored over the years but I have never had collusion damage repaired so I really don’t “have a guy”. The craftsmen that I use paint cars that go into Museums and collections and I wouldn’t take up time and space for a bumper scuff.  Wanting a shop that deals with high line cars, I started calling Porsche dealers and asked who they used for body repairs. Two of them gave me the same answer so I knew where to go. As a plus, it was only two towns away from home.

I made an appointment that was two weeks away and that told me that they were a busy shop, always a good sign. They asked if I wanted a rental car waiting and the claim number got me a free ride. This was looking like great service and it was.

Arriving at the appointed time to drop off the car, I saw one of the largest body shops in memory. There were Porsches (mostly SUV & sedan versions), Mercedes and BMW’s in various states of repair. There was a friendly dog in the waiting area, I assume he was there to calm the customers who were leaving their pride and joy behind. I had forwarded the estimate ahead but the manager wanted to review it with me and commented about hidden damage and explained how supplementary estimates work. More great service.

We were told to inform the rental car company that we would need the car for three days which sounded about right to me. One day to take it apart , one day to paint it and one day to put it back together. The rental was a Nissan, nothing to write about but they did call to find out when it was going to be returned after the 5th day. I called the shop to find out when the Macan was going to be ready. Turns out they were waiting on parts. Parts? What parts? It was scuffed and needed paint, not parts.

I calmed down, It wasn’t my money and I had a replacement ride although there were some complaints that it wasn’t a Porsche. Two weeks later the parts were “still on the water”. By now the Nissan was so much at home it even got a trip to the carwash. I was getting ready to pause the insurance when the body shop called to say the Macan would be done in two days, get ready. Two days later a call to say the Detail Guy was out and it would be another day. You don’t want it dirty do you? Of course not.

After 5 ½ weeks we picked up the car but had to wait for a copy of the repair bill. “You don’t need that, the insurance company will take care of it”. The total bill to the insurance company was $8,143.00, plus the cost of a 5 ½ week rental car. I did notice that the labor rate charged was only $50/hour which is about ¼ of what shops charge people off the street. Seems that there are other ways to keep the lights on in a shop besides a high labor rate.

First off I must say the front of the car was like brand new. The bumper cover was new, as was the lower spoiler and all the front grill pieces. The left front headlight ( like the right one, not a mark in it) was replaced at a cost of $2889. I should’ve asked for the parts, Ebay would’ve earned me a weeks pay. 

I have come to the conclusion that auto body shops can’t pay experienced  workers or provide great service doing $1000 jobs painting bumpers. There must be a business school that can show the break even point for repair work and my guess is that it is somewhere north of $8k.

So if you’re wondering if the insurance companies are taking us for a ride and I got you worked up with the first two paragraphs, think again. I did call the guy who did the original estimate($998) and he wasn’t the least bit surprised. He said that he has been accused of underestimating damages because he’s being paid by the insurance company but that is not where the imbalance starts. I thought that he  would be concerned that his estimate was so far off the final costs (by a factor of 8) but he’s apparently used to it. That’s why his form has contact info on it to ask for a “supplement request”. I guess that is just the way the auto repair industry works. I’m just real glad I don’t have much contact with that part of the business.

Like me, try to stay out of those places unless it’s on someone else’s dime.

Tom Tate – KTF