Repair Authorization and Insurance Companies

During complaint investigations involving collision repairs, the Bureau of Automotive Repair (BAR) often finds that automotive repair dealers (ARDs) fail to obtain the vehicle owner’s authorization for the repair or supplemental estimate revisions. Most collision repairs are three-party transactions involving an ARD, a customer, and an insurance company. Not surprisingly, BAR investigations often find that ARDs are trying to serve two clients: the consumer and the insurance company.

Although this complexity, inherent to the auto collision industry, can lead to confusion on the part of the ARD about who the real customer is, the law is clear: A “customer” means the person presenting a motor vehicle for repair and authorizing the repairs to that motor vehicle. According to Business and Professions Code section 9880.1(f), “Customer” shall not mean the ARD providing the repair services or an insurer involved in a claim that includes the motor vehicle being repaired or an employee or agent or a person acting on behalf of the dealer or insurer. In other words, an insurance company is explicitly excluded from being the customer in an automotive repair transaction.

When an ARD incorrectly treats the insurance company as the customer, the actual customer - the vehicle owner - is excluded from repair decisions. This can lead to the customer feeling misled about the repairs performed on their vehicle or feeling misguided about the length of time for the repairs, two issues that result in numerous consumer complaints each year.

ARDs can avoid consumer complaints by remembering that the vehicle owner is the customer and that they must obtain the vehicle owner’s authorization for the repairs and keep them informed about the repair process. For more information about repair authorization, refer to BAR’s Write It Right guide.

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