I am a auto body shop, I have a total loss vehicle here. Adjustor came to shop gave us an estimate, along with labor and storage charges. We started work on vehicle with customer and insurance permission. In the course of repair, we had to call insurance company for a supplement, when they came the adjustor deemed it a total loss. This was after parts were ordered, painted and some put on vehicle. Now the insurance company os refusing to pay for the parts that they told me where to buy them. Is this legal. Thank you Erin

closed as off-topic by Nij, A. K., Tim Lymington, jimsug Feb 10 at 10:37

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    At first glance, this sounds in breach of contract. What is the insurer's pretext for refusing to reimburse you? what does you contract (if any) with the insurer say in this regard? what do you mean by calling the insurer "for a supplement"? how did the insurer gave you directions on where to buy the parts? If you could edit your question to make it a bit clearer and adding relevant details, that would allow us to give you a more specific and more useful answer. – Iñaki Viggers Jan 30 at 21:00
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    @IñakiViggers it sounds like the body shop gave a repair estimate to "make good" the vehicle, the insurer accepted that estimate and agreed costs, body shop later discovered they couldn't do it under the original estimate and wants a cost adjustment, and that adjustment makes it a total loss - who breached the contract here is the question... The body shop for not honouring their original agreed cost, or the insurer for using new information given to it to adjust its original decision at the body shops inconvenience? – Moo Jan 30 at 21:23
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    An estimate is a professional opinion of the potential cost, without guarantee that this cost will remain constant. It is not a quote, which would make it a statement of the cost of the business provided the service quoted for i.e. the offer of contract. Regardless, it's a question that requires knowledge of the case facts and is off-topic as a request for specific legal advice. – Nij Jan 30 at 21:31
  • @Moo, no, that's not what it sounds like. OP specifically says "Adjuster came to shop gave us an estimate..." How does that translate to "the body shop gave a repair estimate..."?! Body shops don't give repair estimates to adjusters. Adjusters give repair estimates. Body shops ask for supplements if costs go over the adjusters estimate. For a narrative example of a situation similar to OP's, read this: bodyshopbusiness.com/truce-working-with-insurance-adjusters – A.fm. Jan 31 at 2:34

You presumably have a repair contract with the vehicle owner, and the owner is getting the cost of repair covered by their insurance. If the owner authorized the work, they are liable for what they agreed to. Based on that authorization, you probably did some work and ordered some parts, and if the insurance company wants to back out, the owner would still be liable for that work (the owner may have to sue the insurance company: but they owe you). But it is also unlikely that you gave a firm bid, instead you said "we need to do this, here's the estimated cost", and it turns out to be substantially more. At this point, you need to get authorization from the owner (as required by state law, in all 50 states AFAIK), when you go over that percentage (10% is a common figure).

At this point, the owner can say "No, it's not worth it to me" and that caps his liability to the authorized limit. If you anticipated approval and bought parts or did unauthorized labor but then were turned down on the extension, that is very unfortunate for you. Whether or not the insurance company has any direct say in this (in dealing with you) depends on whether the insurance company is the actual customer (who is your contract with?). How firm was your initial bid; who is your contract with; who is turning you down. This is or is not legal, depending on what the specific facts are. If a party says "Go buy those parts", they can't then say "Oops, I changed my mind". If your contract is exclusively with the owner, a third party (such as an insurance company) does not have the authority to modify the contract. So you need to figure out who your contract is with, and only talk to that party.

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    "you need to get authorization from the owner [...] when you go over that percentage." I agree. This reminds me of the question to what extent are estimates binding in contracts, although the OP should clarify that aspect in his inquiry. – Iñaki Viggers Jan 30 at 23:13
  • "But it is also unlikely that you gave a firm bid, instead you said "we need to do this, here's the estimated cost", and it turns out to be substantially more." No. That's not how this works at all. OP even specifically said "Adjuster came to shop gave us an estimate..." How did you conceive the notion that OP ever told anybody "we need to do this, here's the estimated cost"? Adjusters give body shops estimates, not vice versa. – A.fm. Jan 31 at 2:38
  • Why do you think the adjuster works for the shop and not the insurance company? Clearly he doesn't work for the shop (he wouldn't come to the shop). I don't see how the adjuster is relevant. I see no evidence that the shop gave a firm bid, and at best they gave an estimate (following industry standard). Do you have reason to think otherwise? – user6726 Jan 31 at 2:44

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