Volume 14, Issue 6 - November/December 2012

Ask The Doctor
pros who know

Who Gets the Refund and Who Gets Dinged
by Richard Campfield

When a repair fails, can the third-party administrator (TPA) take it back from a non-participant and, if so, shouldn’t the refund go to the consumer?

Last month, for the second time that I can remember, I had a repair subtracted from my check from an Allied customer, when I had already given a refund to the consumer. I am a non-participant so I called the insurance company to ask several questions:

1. Can the network or insurance company take the money back from a non-participant?

2. Shouldn’t the refund go to the consumer because they bought and paid for a policy first with that coverage? The consumer did not get a free repair from an insurance company; the consumer bought a contract/coverage for it.

3. What happens when the deductible is $500 (which it is more than 50 percent of the time) and the consumer is paying for the entire cost of the replacement? Does the insurance company still get the refund or does the consumer? Is this scenario even in the books or swept under the rug?

Now Who’s the Customer?
I have always given the refund to the consumer because the consumer, not the insurance company, is my customer. I have asked multiple attorneys this question, and been told that they believe the consumer gets the refund, not the insurance company. One attorney said that it could vary by state, but the consumer could actually be paid the amount for the repair or replacement and do what they want with it. I asked Allied’s TPA who should legally get the refund but have yet to receive an answer to that specific question.

The fact that the consumer gets nothing on a failed repair is the reason we named the insurance company’s national warranty the “phantom warranty,” since it is a warranty to the insurance company, not the consumer. This leads to another point: if you are a non-participant there is no contract between you and the insurance company, and they make that abundantly clear to the consumer in the script when trying to get the consumer to leave the non-participant.

I was told by the Allied TPA that the insurance company paid for the repair so the insurance company gets the refund and that is just the way they have been doing it for years. I argued that the consumer paid for it first and the refund goes to the consumer. I am still waiting for the answer to the question as to whose refund is it legally. I doubt that I will get an answer.

Payment for a Failed Attempt
To confuse this issue even further, I have below a transcription of an actual tape recording detailing how, after a repair could not be done correctly by a TPA that does repairs, the consumer left that shop and went to another one. The consumer was then told by the insurance company that the first shop gets to keep the money for the repair because they did attempt it. What’s up with that?

TPA: Okay. So, [Shop 1] wasn’t able to do the work, but you have the …

Consumer: Well, that wasn’t quite right. [Shop 1] did a repair, gave me the vehicle back, showed me that the cracks had gotten longer while they worked on it, and told me that they were going to go ahead and run the charge through to you, and that if it failed I could come back and get a new windshield. And I said “That’s not good enough. I want the end of those cracks drilled.” And they said “Well, we can’t do that.” So I had to go somewhere else.

TPA: Okay. So what they did is they ended up repairing it, but they couldn’t drill the cracked area, so you went somewhere else?

Consumer: They repaired it, but they made it worse and then could not repair what they had done.

TPA: Okay. On the windshield repair, was the damaged area bigger or smaller than a dollar bill size, sir?

Consumer: No, it’s the size of a quarter when they got it. When I got it back, it was a couple inches longer.

TPA: So, when it extended out, was it bigger than that dollar bill size?

Consumer: No.

TPA: No, okay. Let me check on what I need to do with this claim. With [Shop 1] doing the work, and I see that this was already invoiced, I need to see what I need to do further. I have to call over to [Insurance Company] directly and see how I would insert the shop that you went with to do the drilling and get that all taken care of.

Shop 2 Owner: Okay.

TPA: Let me see what I have to do further. Okay? Hold on just a moment.

Consumer: Thank you.

TPA: Thank you so much for holding. I do have to speak with my supervisor in regards to this, so it will just be a moment. Ok?

Shop 2 Owner: Ok.

TPA: Mr. ________?

Consumer: Yes, ma’am?

TPA: Since [Shop 1] did do the repair work to the vehicle, [insurance company] is only willing to pay for one repair. So, since they already paid [Shop 1] since they did the work, now that you went to a different shop to get it, you’re actually responsible for that yourself. So you’re going to have to pay out-of-pocket.

Consumer: No, I don’t think so. I’ll call [Insurance Company] myself if that’s what I have to do. The first repair was faulty and they should not pay for that. And it only happened an hour ago, so how could they have paid for it?

TPA: With the claim going through [Insurance Company], it filed its invoice. Since they did attempt to do the work, they get paid for it through [Insurance Company].

Richard Campfield is the founder and president of Ultra Bond Inc. in Grand Junction, Colo.

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