Most shop owners, and most people in general, never read the fine print in their insurance policies. They just trust that they are covered. Then a palm tree falls on the car, and the questions start. In part one of a two-part series, Richard Sharman explains what everyone should know about insurance before they need it.
Richard is an executive coach at ATI with more than 40 years of experience in the collision industry and insurance claims. In episode 54 of Maximum Octane, he and Kim Hickey cover being over or under-insured, who is responsible when a bad policy is sold, why you need a claim set, recycled parts, and policyholder duties.
This article is for general education only and is not legal or insurance advice. Insurance rules vary by state and policy; review your coverage with a licensed agent.
What You Will Learn
- Do you know if you are over or under-insured?
- Who’s to blame when a disadvantageous policy is sold to you?
- Why you should have a claim set
- What happens if a palm tree falls into your car
- Can they use recycled parts to repair your vehicle?
- A bit about policyholders’ duties
Are You Over-Insured or Under-Insured?
Richard opens with a simple but important question: do you know if you are over-insured or under-insured? Many people pay for coverage they do not need while lacking coverage they do. Others carry state minimums that leave them exposed to large claims. Reviewing your coverage regularly helps you find the right balance.
Being under-insured is often the more serious risk. If a major claim exceeds policy limits, the policyholder may be responsible for the difference. That can threaten personal savings, homes, and businesses. Being over-insured, on the other hand, usually means paying for coverage that duplicates other protection or exceeds what is needed. A periodic review with a licensed agent, ideally once a year or after major life changes, helps strike the right balance.
Life events that should trigger a review include buying a new vehicle, adding a teen driver, purchasing a home, starting a business, or significantly increasing assets.
Who Is to Blame for a Bad Policy?
Around the 6 minute mark, Richard and Kim discuss who is responsible when a disadvantageous policy is sold to someone. Agents have a role in recommending appropriate coverage, but policyholders also have a responsibility to understand what they are buying. Asking questions and reading the declarations page are part of that responsibility.
The National Association of Insurance Commissioners offers consumer resources that explain insurance basics and how to contact your state’s insurance department.
Insurance can be confusing, and many people rely heavily on their agent’s recommendations. Asking questions is part of being a responsible policyholder. Useful questions include: What does this policy not cover? What would happen in a specific scenario, such as a tree falling on my car or an uninsured driver hitting me? How do my deductibles work? Getting answers in writing provides clarity if questions arise later.
Why You Need a Claim Set
Richard explains why every policyholder should have a claim set. In general terms, it means having your policy documents, contact information, photos of your property, and records organized before anything happens. When a loss occurs, you are not scrambling to find what you need. Listen to the episode for Richard’s specific recommendations.
Documentation is critical after a loss. Photos of vehicles, property, and valuables taken before any damage provide evidence of condition. Keeping receipts for major purchases and repairs helps establish value. Storing these records digitally, in a secure cloud account, protects them from being lost in the same event that causes the claim.
A practical approach is to create the claim set during a calm moment and update it once a year when your policy renews. Walk around your vehicles and property with a phone and record a short video, then save it with your policy documents and agent contact information in a secure cloud folder. Shop owners can encourage customers to do the same, which positions the shop as a helpful resource long before a claim ever happens.
What Happens When a Palm Tree Falls on Your Car?
Around the 13 minute mark, Richard walks through the scenario that gives this episode its name. A falling tree is generally a comprehensive claim rather than a collision claim, but the details depend on your policy. Richard uses real-life examples to show how insurance companies respond and what policyholders should expect.
Weather-related claims often surge after major storms, which can slow claim processing. Policyholders who document damage promptly, mitigate further damage when safe, and keep records of all communications with their insurer tend to have smoother experiences. Knowing coverage details in advance helps set realistic expectations about what will be paid.
How to Choose a Collision Shop
Richard also shares how to spot the best collision shop. Policyholders often have the right to choose where their vehicle is repaired, and choosing a qualified, trustworthy shop matters. Industry training through organizations like I-CAR is one indicator of a shop’s commitment to proper repairs.
Choosing a collision repair shop is an important decision because the quality of the repair affects safety, resale value, and appearance. Signs of a qualified shop include training certifications, proper equipment for modern vehicles, clear communication, written warranties, and positive reviews. Many states allow policyholders to choose their own repair shop, even if the insurer recommends another. Understanding those rights helps customers make informed decisions.
Recycled Parts and Your Repair
Richard addresses whether insurance companies can use recycled parts to repair your vehicle. Policies and state laws vary on the use of OEM, aftermarket, and recycled parts. Understanding your policy language helps you know what to expect and when to ask questions. Collision shop owners can find more on navigating these conversations in ATI’s How to Negotiate With Insurance Companies.
Repair parts generally fall into several categories: original equipment manufacturer (OEM) parts, aftermarket parts made by other companies, and recycled or used parts taken from other vehicles. Each has advantages and disadvantages in cost, fit, and availability. Insurance policies often specify which types may be used. Some states have regulations requiring disclosure of non-OEM parts. Customers who care about part type should review their policy and ask questions before repairs begin.
Stackable vs. Non-Stackable Deductibles
Richard explains stackable and non-stackable deductibles and how they affect what you pay when more than one policy or coverage applies. These details can make a big difference in out-of-pocket costs.
Deductibles can add up quickly when multiple coverages apply to a single event, such as damage to both a home and vehicle from the same storm. Understanding how your policies interact helps you estimate out-of-pocket costs and plan financially for potential losses.
Policyholders’ Duties
Richard closes with policyholders’ duties. Insurance is a contract, and the policyholder has obligations too, such as reporting claims promptly, cooperating with the insurer, and taking reasonable steps to prevent further damage. Knowing those duties protects your claim.
Common policyholder duties include notifying the insurer promptly, providing accurate information, allowing inspection of damage, preserving evidence, and taking reasonable steps to prevent further damage. Failing to meet these duties can complicate or jeopardize a claim. Reading the duties section of your policy before a loss helps you know what to do when the time comes.
Why Shop Owners Should Understand Insurance
For repair shop owners, understanding insurance serves two purposes. First, it protects their own personal and business assets. Second, it helps them serve customers better. Customers dealing with claims often feel confused and stressed. A shop that can explain the process, help customers understand their rights, and advocate for proper repairs builds trust and loyalty.
Collision shops in particular benefit from deep insurance knowledge, since much of their work involves coordinating with insurers. Mechanical shops also encounter insurance questions related to comprehensive claims, extended warranties, and roadside coverage. Richard’s decades of experience in the claims world make this episode a valuable resource for both.
Insurance Review Checklist
- Find your declarations page and confirm your coverage limits and deductibles.
- Ask your agent whether you are under-insured or over-insured.
- Build a claim set with documents, photos, and contacts.
- Learn your rights about choosing a repair shop and parts.
Continue with part two, Everything You Need to Know About Your Auto Policy. Kim also shares insurance lessons from Hurricane Ian in Hurricanes, Real Heroes, and the Ones Who Keep America Going.
Frequently Asked Questions
Does car insurance cover a tree falling on my car?
In many cases, damage from a falling tree is handled under comprehensive coverage rather than collision coverage, because the vehicle did not collide with something while being driven. If you carry only liability coverage, damage to your own vehicle may not be covered at all. Your deductible will usually apply. Coverage details vary by policy and state, so review your declarations page and ask your agent how this type of claim would be handled.
Can I choose my own collision repair shop after an accident?
Many states give policyholders the right to choose where their vehicle is repaired, even if the insurer suggests a shop from its network. Rules vary, so check your state insurance department’s guidance and your policy language. When choosing a shop, look for training and certifications, proper equipment for modern vehicles, clear communication, written warranties, and a good reputation. Repair quality affects your safety and your vehicle’s value.
Can my insurance company use recycled or aftermarket parts on my car?
Many policies allow insurers to specify aftermarket or recycled parts, especially on older vehicles, while some policies or endorsements provide for original equipment manufacturer parts. Some states require disclosure when non-OEM parts are used. If parts type matters to you, read your policy and ask your agent about options before a claim. During a repair, your collision shop can explain which parts are being used and why.
How often should I review my insurance coverage?
A yearly review at renewal is a good habit, along with a review after major life changes such as buying a vehicle, adding a driver, purchasing a home, or starting a business. During the review, confirm limits, deductibles, listed drivers, and vehicles. Ask your agent whether your coverage still fits your assets and risks. Regular reviews help you avoid paying for coverage you do not need and catch gaps before they become costly.
