Frustrated with car insurance costs? Think twice.

More people than ever are frustrated with their car insurance costs. After all, it’s not a multi-million dollar restored classic race car, right? With the rising costs of insurance policies, you might be considering a switch to a discount insurance company. There’s good reason to think twice before you do.

In this guide, we answer these questions:

• Why are car insurance costs so high?
• How does discount car insurance work?
• How can I get my car repaired right if a discount insurer is part of my claim?

We hope this guide will help you understand some of the challenges we’ll need to help you face if you are involved in discount insurance claim.

Why are car insurance costs so high?

There are really three main things that make car insurance costs so high:

• Labor costs
• Parts availability and costs
• Risk

Labor Costs

Modern cars, trucks, and SUVs are a lot more complex than they used to be. The time required to fix them is growing with every new model. As this labor cost goes up, it makes an insurance company’s costs for repair go up. We’ve written about this in our article: What are the top things that affect auto collision repair costs?

Cost and availability of parts

In the same way, the costs of parts are also going up. There are thousands of parts in modern vehicles. Many of them are more complex than they ever used to be. An LED headlight assembly for an average modern car can cost as much as $1,000 – just to get the part! When you add supply chain issues, it means parts are getting scarce from Original Equipment Manufacturers (OEMs), aftermarket parts suppliers, and even salvage yards. When parts are scarce, the prices tend to go up.

Since insurance companies operate as for-profit businesses, they have to balance their income (from policy sales) with their expenses (from policy claims). When their costs go up for repairs, the car insurance costs for their car insurance policies goes up.

Risk

Insurance companies also have to manage their risk. Inexperienced drivers are more likely to be involved in a wreck. This means their car insurance costs are going to be higher than someone with more experience who is driving the same type of vehicle. The number of claims an insured person has made can also increase the insurance company’s risk. Even the number of tickets from moving violations an insured person has will increase the insurance company’s risk. All risks, when added together, can make a big difference on car insurance costs.

How does discount car insurance work?

What is discount car insurance?

First, we need to talk about what discount car insurance is.

Maybe you’ve noticed. There’s an advertising competition happening right now in the car insurance industry. You see it on TV, billboards, magazine ads – maybe even in your mailbox. Most of these companies seem to be trying to do two things:

1. Tell you you’re paying too much for car insurance
2. Convince you that they’ll take better care of you than any of the other companies

This competition is fierce. It’s leading to lower and lower policy premiums. That sounds like a good thing, right?

Unfortunately, as we mentioned earlier in the section Why are car insurance costs so high? , repair costs are going up quickly. Guess who has to pay the difference when there’s been an accident that involves a discount car insurance policy?

Who pays when car insurance costs don’t cover the claim amount?

Most people think it’s the car repair shop’s responsibility to take whatever the insurance company pays.

This has led to a lot of auto repair scams as shops compete for work in order to stay open. Because of the rising costs of parts and labor, along with the lower and lower payout claim values, auto body repair shops are under a lot of pressure. This can lead them to cut corners that reduce quality or, worse, lead to safety issues now or in the future. You can read more about one type of those in our page about hidden damage.

When discount insurance is involved in your claim, it’s your responsibility to know how to avoid scams, hidden damage, or lower quality repairs. The more you know about car insurance costs and how they impact claims, the more likely you’ll be to have your vehicle repaired with excellence.

How can I get my car repaired right if a discount insurer is part of my claim?

If you have discount insurance and are the cause of an accident (or are the only vehicle involved in a one-car accident, deer strike, or other property damage event), your insurance company will only pay for the amount of repairs that your policy limits cover. In some cases, you may be able to use a diminished value calculator to dispute the payout.

If you are not at fault but the other party has a discount insurance policy, you should consult with your insurance company to see what options they may have available to assist you. There may be other legal options available to you depending on the severity of your claim.

How to handle unreimbursed repair costs

Regardless of who is at fault, in most cases, if the costs of the repair are higher than the amount your insurance company will pay, you will be responsible to pay the difference. Your auto body repair shop will only be able to give you an estimate for repair. An auto body repair team will not be able to give you advice on how to recover the difference between an insurance company payout and the final costs of repair.

Know your rights in North Carolina

In North Carolina, you have the right to choose your own automotive collision repair shop regardless of what the insurance company recommends or says they require.

If insurance is involved, you should contact them first. Let them know there’s been an accident and find out if they will write their own estimate.

You can bring that estimate to the shop you choose so they can help you understand the true cost of repair. The shop will look at your car to assess the visible damage. A shop like ours will let you know if there’s a difference between the insurance company estimate and what we think it will take to properly repair the vehicle.

There is almost always some hidden damage. A body shop can’t tell the full amount of damage until they start to disassemble the vehicle. When we find hidden damage, we work with you (and in some select cases, your insurance company) through a process of filing supplements.

You’ll be responsible to pay any difference between what the insurance company will pay and the actual costs of repair. You can read our article Do you deal with car insurance companies after an accident? for more information on how we can help.

About Automotive Collision Specialists in Fuquay Varina, NC

Do you want your car repaired correctly? We do too. That’s why we stand behind all our work with a limited lifetime warranty. We need to be sure your vehicle is repaired correctly when it rolls out of our collision center.

If you’re trying to find a good auto body repair shop near you to help, please give us a call. We’ve been serving neighbors in and near the local Fuquay-Varina, NC community for more than 30 years.

We’re ASE and I-CAR certified and offer a limited lifetime warranty on all the work we do. Call us today at 919-552-0333 to see how we can help!