Is it insurance fraud if the shop absorbs the deductible in an auto claim?

As I see it, the shop and the adjuster got together to agree on a price. Then the shop is willing to do the job for less and only takes the award from the insurance company. Is this fraud?

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  • 7 years ago
    Favorite Answer

    The Insurance company doesn't care, they are only paying what the adjuster writes up anyway. Minus the deductible. if the shop wants to eat the deductible, that's there decision.

    Source(s): Insurance Agent for 15 yrs.
  • 7 years ago

    That would be fraud, but you're never going to prove it and they're going to be able to prove that the whole thing is legit. That's because it usually is legit, at least on paper. And if something is legit on paper, it's legit in court.

    You seem to have your terms mixed up, though. The deductible is the part the insurer doesn't cover in a loss, which means it's usually the part that you cover. If you have $1000 in damage and a $300 deductible, the insurer pays $700 in total. If the body shop agrees to absorb the deductible, they're giving you a break and not the insurance company. The insurer doesn't care who does pay the deductible, as long as it isn't them.

    And trust me, body shops don't give breaks to insurance companies. Take a damaged vehicle into any repair shop and get an estimate, then ask them how much it would be if you didn't go through insurance. 99% of the time, the price will be much lower. The only shops that give volume discounts to insurers are quick-repair places like auto glass and upholstery cleaning services.

    Body shops don't give breaks to insurers for two reasons. One, the shops are doing this for money and they like getting paid. Two, everything has to be done by-the-book and with a full paper trail with insurance companies. Insurers keep detailed written records on absolutely every little thing, then make three copies of everything, because paper trails are how they cover their own butts.

  • 3 years ago

    I would recommend you to visit this site where onel can compare rates from different companies: http://INSURANCECOMPAREQUOTES.US/index.html?src=2Y...

    RE :Is it insurance fraud if the shop absorbs the deductible in an auto claim?

    As I see it, the shop and the adjuster got together to agree on a price. Then the shop is willing to do the job for less and only takes the award from the insurance company. Is this fraud?

    Follow 2 answers

  • Dan B
    Lv 7
    7 years ago

    This is how it's done. You truly have $1,000 damage with a $300 deductible. The body shop agrees to do the work for $1,300 and the insurance company agrees to the price. The body shop "absorbs your deductibe" by overcharging for the repairs. I see it as fraud, but hard to prove.

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  • Rouvin
    Lv 6
    3 years ago

    I might suggest that you visit this web page where onel can get rates from different companies: http://INSUREQUOTE.INFO/index.html?src=5YAxnu68umH...

    RE :Is it insurance fraud if the shop absorbs the deductible in an auto claim?

    As I see it, the shop and the adjuster got together to agree on a price. Then the shop is willing to do the job for less and only takes the award from the insurance company. Is this fraud?

    Follow 3 answers

    Source(s): I might suggest that you visit this web page where onel can get rates from different companies: http://INSUREQUOTE.INFO/index.html?src=5YAxnu68umH...
  • Harry
    Lv 7
    7 years ago

    it is not legal, but its how its done! a lot of contractors for home improvement will write you 2 bids, one for the insurance, one for taxes, but remember they have to eat that money they never saw, so sharing is nice.

    its the way its done not quite usually but not seldom either.

    Source(s): it is still illegal! contracted for years
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