Is insurance steering illegal?

If you own a vehicle, you must have insurance coverage – it’s that simple.

When you get into an accident, this coverage is there to help absorb your losses. But does that mean you have to use the company the insurance provider tells you to? Isn’t that considered insurance steering? Insurance steering is an illegal practice in many US states, including Maryland. Even though it’s illegal, many insurance companies do this as a standard business practice. According to the law, you may choose the repair shop you want.

What is car insurance steering?

Car insurance steering is a common practice that some insurance companies use to pressure policyholders into using a particular repair shop within their network or in their Direct Repair Program (DRP) for vehicle repairs. A DRP is an agreement between an insurance company and a repair facility where services are performed at a discount or predetermined price. In exchange, the insurance company sends more work to the repair shop, making it a win-win for both parties. Note: In Maryland, DRPs are legal, provided they don’t violate anti-steering laws.

Scare tactics insurance companies use in steering

Some common scare tactics that insurance companies may use to steer policyholders toward specific repair shops:

Suggesting that using a non-preferred repair shop will result in delays, higher costs, or substandard repairs.
Claiming that if a policyholder chooses their own repair shop, the process will take longer, the repairs will cost more, or the repairs may not be covered under the policy.
Offering incentives or inducements to use a specific repair shop, such as discounts or warranties, may come at a cost to the policyholder.
Using aggressive or intimidating language pressuring policyholders into using the preferred repair shop.
Insinuating that using a non-preferred repair shop will result in a loss of coverage or higher premiums in the future.
Claiming the warranty will be voided or that the insurer has had issues with the shop before
Threatening that they’ll not pay for the rental.

Maryland State Steering Regulations

Maryland has specific regulations to protect policyholders’ rights and ensure they can choose their own windshield repair facility. Here are some key regulations related to steering in Maryland:

Anti-steering laws: Insurers cannot require policyholders to use a specific repair shop or suggest that a specific shop is preferred. Policyholders can choose their repair shop without being punished.
Disclosure requirements: Insurance companies must provide policyholders with a written disclosure outlining their rights to choose a repair shop. This disclosure must include information about the policyholder’s right to choose a repair shop and the insurer’s obligation to pay for reasonable repairs.
Prohibition on coercion: An insurance company cannot threaten to cancel or refuse to renew a policy or increase premiums if the policyholder chooses their repair shop.
Enforcement: The Maryland Insurance Administration is responsible for enforcing these regulations and investigating complaints related to insurance steering. If an insurer is found to violate the regulations, they may face penalties and fines.
Prohibition on payment for recommendations: Adjusters or appraisers are prohibited from accepting any payment from a repair shop for recommending that shop to a vehicle owner. This helps to ensure that adjusters and appraisers make recommendations based on what is best for the policyholder rather than being influenced by financial incentives.
Limitations on repair costs: Insurance companies are not required to pay an amount for repairs greater than the usual amount charged by repair shops within a reasonable distance of the vehicle owner. This means that policyholders may need to pay the difference if they choose a repair shop that charges more than the usual amount. It’s worth noting that insurance providers are not prohibited from requiring the owner to drive their damaged vehicle to a facility used exclusively for damage appraisals.

What is a preferred provider?

A preferred provider is a repair shop that has an agreement with an insurance company to provide repair services to policyholders at a discounted rate. These repair shops are sometimes called “direct repair facilities” or “DRP shops.” Insurance companies may encourage policyholders to use preferred providers to control costs and ensure that repairs are completed quickly and to their satisfaction. A repair/auto body shop agrees to the insurance company’s terms and conditions by agreeing to be a preferred provider. These terms may include specific pricing requirements, repair timelines, and quality standards. In exchange for meeting these requirements, the repair shop may receive a steady stream of business from the insurance company and access to resources and support from the insurer. It’s important for policyholders to carefully consider their options when choosing a repair shop, including both preferred providers and independent repair shops. While preferred providers may offer certain advantages, such as discounts and streamlined repair processes, policyholders should also consider factors such as the quality of the repairs and their preferences when deciding.

Steering vs. preferred provider

Insurance steering involves an insurer directing a policyholder to a specific repair shop. At the same time, a preferred provider is a repair shop that has an agreement with an insurance company to provide discounted services to policyholders. While both may involve an insurer’s influence over the policyholder’s choice of repair shop, steering is illegal. It can result in penalties, while preferred providers are legal and may offer advantages to policyholders.

Can I choose who repairs my car after an accident?

Yes, you can choose who repairs your car after an accident, regardless of what your insurance company may suggest or recommend. You are not required to use a particular repair shop recommended by your insurer, including a preferred provider or a direct repair facility. However, it’s important to note that if you choose a repair shop that charges more than what your insurer deems reasonable, you may be responsible for paying the difference in cost.

We take your rights and safety seriously!

At Superior Windshield Repair, we value your safety and rights. You can expect quality repairs, prompt service, and competitive pricing. Our team is committed to ensuring you are satisfied with our work and that your car’s windshield is restored to its pre-accident condition. Contact us today at 410-263-1155 or [email protected] to schedule a repair appointment and get your car back on the road as soon as possible!