Unfortunately, this case needs a lawyer — not a consumer advocate


When Leonard Smith had an accident with his 2016 Mini Cooper Clubman, he thought his auto insurance policy at American Family Insurance (AFI) would cover the damage — until the insurance company disputed part of his claim.

Smith believes that AFI should pay to replace certain parts that he feels were too severely damaged to be repaired. AFI disagrees, claiming that the parts should be repaired rather than replaced.

Who is correct?

After the accident, for which Smith admits responsibility, he took the Mini Cooper to Haury’s Lake City Collision, a Seattle-based auto body shop recommended by AFI, for an estimate of the repair costs. Haury’s, which describes itself as “Seattle’s premier auto body and collision repair facility,” estimated the repair costs at $7,682, which includes the cost of replacing the quarter panel and rear bumper cover.

“We do not have an agreed repair amount or repair methodologies,” AFI’s claims adjuster informed Smith. “I have gone to two different repair facilities who have both agreed that they can perform the correct repairs per the American Family Insurance estimate. The quarter panel and rear bumper cover are both repairable.”

According to the adjuster, AFI’s liability for the claim was $3,344, less a deductible of $500. That’s a difference of $4,338, not counting the deductible. The adjuster felt that he could not justify the cost of cutting into the car to enable replacement of the damaged parts. He also informed Smith that Haury’s would not disclose its hourly labor rate.

Smith sent a letter to the adjuster asking him to explain how the adjuster calculated AFI’s liability. Specifically, Smith wanted to know the names of the shops which the adjuster had contacted regarding the work to be done on his Mini Cooper, the dates and times of the contacts, and the names of the persons to whom the adjuster had spoken.

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In the same letter, Smith included the following text, which noted that the adjuster had cited obsolete sections of the Washington Administrative Code (WAC) to justify his determination:

As you must know from your discussion with Haury’s, that I have subsequently confirmed, they charge a flat rate for repair work. I do not believe that your statement above is a valid basis for denying my claim and underpaying for the work that is necessary. Nor do I believe based on my conversations with Haury’s that your statement accurately represents the discussions that took place.

In the same letter you cite the WAC. … I want to draw your attention to the following paragraphs:


    • Misrepresenting pertinent facts or insurance policy provisions.
    • Compelling a first party claimant to initiate or submit to litigation, arbitration, or appraisal to recover amounts due under an insurance policy by offering substantially less than the amounts ultimately recovered in such actions or proceedings.
    • Attempting to settle a claim for less than the amount to which a reasonable person would have believed he or she was entitled by reference to written or printed advertising material accompanying or made part of an application.

  • Failing to make a good faith effort to communicate with the repair facility chosen by the claimant.
  • Arbitrarily denying a claimant’s estimate for repairs.
    (a) A denial of the claimant’s estimate for repairs to be completed at the chosen repair facility based solely on the repair facility’s hourly rate is considered arbitrary if the rate does not result in a higher overall cost of repairs.
    (b) If the insurer pays less than the amount of the estimate from the claimant’s chosen repair facility, the insurer must fully disclose the reason or reasons it paid less than the claimant’s estimate, and must thoroughly document the circumstances in its claim file.

Smith hired an independent adjuster to assess the damage to his Mini Cooper and give him an estimate that he considered fair. The independent adjuster told him that the quarter panel and rear bumper cover of his Mini Cooper needed replacement, at an estimated cost of $6,113, less the $500 deductible.

And he sent additional correspondence to AFI’s physical damage field claim manager, which contained the following:

I moved forward with the repair at Haury’s with the information that I had before me after exercising due diligence regarding my options. I did all I could with the information that I was given, which frankly was not much in spite of my repeated attempts to obtain it. I wonder where my insurance company is in all this. Why am I having to spend so much time on my claim? I feel caught between Haury’s and American Family, when all I want is a fair settlement: my car restored to the condition it was in before the accident, not one that has us roughly $4,300 apart.

Smith received a check from AFI for $2,844, the original amount offered by the adjuster, less the deductible, to settle the claim.

He then contacted our advocates for assistance.

Because AFI paid the claim, and as Smith plans to take legal action against AFI because the claim payment was much lower than he expected, we cannot assist him with his case. Nor did the accusatory tone of his correspondence with AFI incline us in his favor.

Washington state law allows auto insurance policyholders to select their own auto repair shops.

But Smith’s case, in which auto repair shops and insurance companies disagree on the necessity of repairs and their estimated costs, raises a valid question, which we’re asking our readers.

Should insurance customers be able to demand that specific body shops complete the repairs on their cars, regardless of the estimated repair costs?

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Jennifer Finger

Jennifer is the founder of KeenReader, an Internet-based freelance editing operation, as well as a certified public accountant. She is a senior writer for Elliott.org.

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