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The Top Ways Insurance Companies Are Taking Advantage of Everyone

It’s no secret that insurance companies rake in tons of financial gains for the halfhearted services they provide their customers with. Many insured people would even agree that they’re paying far too much for coverage that is less than desirable. Specifically, I’m talking about automobile insurance. As if inflating premiums wasn’t enough, providers have been utilizing yet another way to cut their costs and increase profits. Although this money-saving method is something that has taken place since the late 1970s, it’s yet to break into the public eye as an everyday occurrence until now. CNN sent a team of reporters out to investigate the corrupt practice that has become a common reality in the world of auto insurance. A nationwide class action pertaining to the practice may lead to the gradual reformation of insurance company operations.  First in line, personal injury…  When you’re in an automobile accident, the first thing you’ll need to worry about is the health of yourself and anyone else involved. In a bunch of states, fault must be determined before the liable party can be deemed responsible for paying all medical and property damage expenses. It may require lengthy trials and costly legal fees to determine fault, therefore delaying coverage, allowing conditions to fester and injuries to worsen if not treated to the fullest degree in a reasonable amount of time. Luckily, Florida is a “no-fault” state. In other words, every operating motor vehicle must be insured, and more specifically, insured with at least $10,000 in coverage each in 2 separate auto insurance extensions: Personal Injury Protection (PIP), and Property Damage Liability (PDL). Clearly stated, PIP will cover you for up to $10,000 in medical expenses for any injuries resulting from an accident involving a motor vehicle. Looking at the specifics, you’re actually only entitled to $2,500 of that coverage unless you’re diagnosed with an Emergency Medical Condition (EMC). Funnily enough, when it comes to making a PIP claim, it’s usually the insurance provider that tells you what medical examiner to go to for a checkup. That examiner is the one that will determine if you are eligible for the additional $7,500 in coverage, and you’d better believe there’s a lot of pressure placed on that examiner by the insurance company to minimize costs.  …but is the car okay?  Afterwards, however, many drivers shift their attention from personal injuries to property damages. You make a claim on their insurance policy to secure the coverage you’re entitled to—feeling like you’re “in good hands”, right? The repairs take place fast, and you don’t have to pay much out of pocket, so everything is going in your favor…or so it seems. It’s safe to estimate the average premium for insuring a single automobile to be around $250 per month. It’s a hefty cost in of itself to merely possess coverage, so is it unreasonable to expect genuine service in return? Well, if you ask the insurance companies—apparently so. An early step they take towards making sure they’re saving money is sending out an estimator to determine how much they’ll be spending on parts, and exactly which ones they need. Let’s face it—if they left it up to the policy holder to determine which repairs needed to be made, something would probably go wrong. In order to receive repairs, you’ll need to find a repair shop capable of doing them; however, if you policy states that it’s up to the provider to choose where your vehicle is repaired, you may be out of luck. They could send you to one of their “preferred” shops; a shop in their “network”; one that works quickly, without question, and—mostly importantly—has low costs. Shops like these are part of something known as a Direct Repair Program (DRP). The repair shops form contracts with insurance companies agreeing to repair large amounts of policy holder vehicles at a reduced cost. The repair shop sees an increase in business, and secures a source of income and clients; in return, the insurance company saves money on repairs, further increasing their monetary gains. This also allows insurance companies to provide the option of warranties to policy holders. Consumers think they’ve struck gold, being sold by phrases such as “convenient and speedy repair” or “lifetime repair warranty”.  The barebones description I just provided of Direct Repair Programs is far from the problem. As a matter of fact, the previous paragraph almost makes it seem like insurance providers are the good guys! The steps that an insurance company takes to minimize their costs are not something that policy holders should worry about. However, when those steps interfere with the safety and fair treatment of consumers it becomes a problem. It’s becoming more difficult to trust DRPs nowadays because of what the CNN investigation mentioned earlier revealed.  What did CNN say about DRPs?  Think of the world of insurance like any other company, like Wal-Mart for example. They pay an overall lesser price per unit the more they buy at a time, and they can further decrease costs by using cheaper materials. When companies become corrupt and money-hungry, they’ll vigorously search for ways to nickel-and-dime every customer out there, and if they know they’ll get away with it, they’ll milk the resource until they’ve exhausted it. So am I claiming that DRP deals made between insurance providers and repair shops are organized ways to continue profiting off of unaware consumers? Kind of. Not every repair shop is going to be alright with the idea of insurance company corruption, and they will gladly deny any offers to become part of their DRP. However, if repair shops are being persuaded to use cheaper materials or even just used parts in order to save the insurance companies a few bucks, consumers would likely have no idea. The repaired car may APPEAR fixed, when it’s truly just equipped with a bunch of unsafe parts that have already been involved in previous automobile accidents. Occasionally, the parts will even be counterfeit—made to resemble original parts and vehicle components, but really—the parts are dirt cheap variants made by third-party suppliers. To speak with an attorney regarding your personal injury case for a free consultation and case evaluation, call us now at 727-451-6900. Sibley Dolman Gipe Accident Injury Lawyers, PA 800 North Belcher Road Clearwater, FL 33765 727-451-6900 https://www.dolmanlaw.com/about-us/our-attorneys/matthew-a-dolman/