Dear Consumer Ed:

I wrecked my car and it needs major body work. I saw an advertisement for an auto body shop that said they would pay my insurance deductible.  Is that legal?

Consumer Ed says: 

While having the auto body shop pay for your insurance deductible might not be illegal at face value, we would strongly caution you against it.  First, you should look carefully at the specific terms of the contract you have with your insurance provider.  Allowing the auto body shop to pay the insurance deductible may violate the terms of your policy (frequently, insurance contracts state that the policy holder must pay the deductible).  Also, it is likely that the auto body shop will want to recoup the extra cost of the deductible somehow.  It can do this in one of two ways:  by charging the insurance company more than what the repairs would actually cost, which would constitute insurance fraud; or, by spending less money and time on repairing your car, which could lead to more problems in the future (as well as a depreciation of the value of your car). Or, it could do a combination of both of these things. The fact that a practice may not technically be illegal doesn’t make it a good idea, especially if it’s an offer that seems too good to be true!

For more information, you should contact Georgia’s Office of Insurance and Safety Fire Commissioner by visiting www.gainsurance.org, or by calling 800-656-2298.

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