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Wednesday, 19 June 2013 22:23

North Carolina Body Shop Wins Short-Pay Arbitration Case Against Nationwide Insurance

Michael Bradshaw, VP of Operations of K&M Collision in Hickory, NC, was awarded claimed short-pays in a court ordered arbitration. The binding arbitration was the result of Bradshaw filing a lawsuit on behalf K&M Collision’s customer against Nationwide Insurance for the insurer’s underpayments of what was determined to be reasonable and necessary repair costs. In North Carolina every lawsuit files goes to binding arbitration and only after same can either party then seek a trial if so inclined.

The insurer’s short-pays included: labor rates ($48 Body & Refinish, $80 Mechanical and $65 Frame), procedures (i.e. sand and buff, final detail, road test, color tint and collision access time), invoiced paint & materials, sublet markup, fixture usage and a $250 Damage Analysis fee which included a comprehensive part-by-part inspection of all components including: exterior panels, inner structure, mechanical components and SRS and seat belt systems.

The award also included storage charges at a rate of $50 per day for the total amount of $2,506.98 plus accrued interest until the insurer’s full payment is made.

“I’m glad the courts recognized whom the repair experts were,” said Bradshaw.

“From the beginning I was very confident we would succeed through our legal system in proving all our charges to be both reasonable and necessary. For any insurer to expect all shops to operate by the same rates, procedures and charges regardless of training, manufacturer certifications, equipment and facilities is ludicrous. The fact is we have made a commitment to repairing vehicles properly, adhering strictly to all manufacturer repair methods and guidelines and what we’re consistently finding with some insurers is they care very little about manufacturer certifications and proper repairs and only about bottom line cost and the cheapest repairs possible.

“My father (CEO) and I decided if we were going to stay in business and continue to repair vehicles properly we could no longer accept insurer dictated repair costs. We found that short-pay litigation was necessary to stop insurer underpayments and provide our customers with the factory certified repairs their policy affords them.”


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