Special Reports

9 Investigates: Insurance companies cutting corners on safety

By Jason Stoogenke, wsoctv.com
By Jason Stoogenke, wsoctv.com

CHARLOTTE, N.C. -- You spend money on auto insurance, expecting that if you are in a wreck, a body shop will fix your vehicle so that it is as safe as before the crash.

Story highlights:

  • Action 9 uncovers some insurers may be trying to save money by cutting corners on safety.
  • Some insurance companies have lists of "preferred" body shops.
  • Similar allegations have drawn a lawsuit from one state.

But some body shops told Action 9's Jason Stoogenke that insurance companies are forcing them to cut corners -- even if it means putting drivers back on the road in an unsafe vehicle. Those shops said insurers pressure them to use cheaper parts, to repair things that should be replaced and to do work in less time than the job demands.


Masee Vang's Story

Masee Vang was in a wreck.

"I could see it out of the corner of my eye and then, boom, it happened, and my nerves were just pretty much wrecked," she said.

She took her car to K&M Collision in Hickory. Operations manager Michael Bradshaw said parts needed to be replaced, but that Vang's insurance company kept telling him to just repair them.

"The customer wants it repaired correctly, you know? We want to repair it correctly (but) the insurance company wants to save money. So they're fighting us every bit of the way," Bradshaw said.

"I'm really, really disappointed. I really am. I feel like they kind of let me down," Vang said of her insurer.

But K&M wouldn't take "no" for an answer. Bradshaw told Channel 9 that he fought with her insurance company for three weeks to convince it that parts on Vang's vehicle needed to be replaced, not just repaired. He said he and Vang ultimately won, but it forced Vang to wait longer to get her car back.


Collision consultant: "It happens every single day"

Collision consultant Billy Walkowiak is hired by both drivers and insurance companies to see if repairs are done properly. He feels that many insurers put profits before driver safety.

"They really are all about getting the car finished and repaired and getting out as quickly as possible," he said. "I can't say that they are trying to put a consumer in a dangerous vehicle, but I can say it happens every single day."

Some insurance companies have lists of "preferred" body shops. That means that the insurers throw more business their way, but critics say those insurance companies use such lists to keep shops in line as well, threatening to drop shops that challenge them too often.

Action 9 asked the insurance industry specifically about that allegation:

View on YouTube

Insurance industry's response

Action 9 asked six major insurers to respond to claims that they pressure body shops to skimp on repairs, even if when it jeopardizes safety: Allstate, GEICO, Liberty Mutual, Nationwide, Progressive, and State Farm.

None would speak on camera.

State Farm emailed a statement: "A vibrant, profitable auto collision repair industry is in the interest of State Farm. At the same time, we are advocates on behalf of our customers for reasonable repair costs. We believe repairer profitability and quality auto repairs that are reasonably priced can both be achieved."

Allstate and Liberty Mutual referred Action 9 to Michael Barry of the Insurance Information Institute, a nonprofit group in New York.

"The auto insurance industry has a vested interest in seeing that cars are repaired properly because the auto insurer's going to continue to insure that vehicle and the people in it," Barry said.

The institute also provided this report.


Insurer being sued by state

Still, at least one state is suing a major insurance company over similar allegations.

Louisiana said State Farm was so heavy-handed with body shops that it put that state's drivers in danger.

RESOURCES: Read the Louisiana lawsuit

Assistant Attorney General Stacie Deblieux is handling the case.

"Everyone is at risk. Even if you have good repairs on your vehicle, the person who is driving in the lane next to you may not," she told Action 9.

Some Charlotte area repair shops, including K&M, are urging North Carolina Attorney General Roy Cooper to sue as well. K&M even produced a YouTube ad directed at Cooper.

View on YouTube

But Cooper is torn between safety and slapping insurance companies with more costs, which he said they would probably pass along to consumers.

"We want to make sure that repairs, that you don't get charged too much and that insurance companies don't charge too much for their premiums," he told Action 9.


Protecting yourself

Here's what you can do to protect yourself before or after you're in a wreck:

1. Ask your insurance company if your policy can specify that original parts be used for repairs.

2. See if the body shop has an agreement with the insurance company. If so, the shop may be less likely to challenge the insurer.

3. Read the estimate closely before repairs start. It should have abbreviations next to each repair saying whether it will be replaced (RPL) or repaired (RPR) and, if repaired, where that part will come from: aftermarket (A/M), junkyard (RECON) or a wrecked vehicle (LKQ). 

4. If the shop is using "used" parts, ask if they are the same metal, weight and strength. Some shops may even have proof that X-rays were used to make sure the part is not damaged.

5. Call independent auto appraisers. They can review your estimate before repairs start and review the work after it's done.

Read our past 9 Investigates stories:

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