After an accident, you have enough to worry about. Navigating the insurance claim process can add another layer of stress, especially when it comes to repairs. You might hear your insurance company suggest, or even push you toward, a specific auto body shop. This practice is known as 'steering,' and you should understand your rights. Insurance steering occurs when an insurer tries to control your choice of a repair facility, often by implying that their preferred shop is faster, cheaper, or the only one they will work with.
In Vermont, the law is clear: you have the right to have your vehicle repaired at any shop you choose. This is a protected consumer right. The state considers steering to be an unfair claim settlement practice under 8 V.S.A. § 4724(9) 1. Engaging in such behavior is broadly prohibited as an unfair or deceptive act within the business of insurance 2.3 Insurers often have networks of "direct repair program" (DRP) shops where they have pre-negotiated labor rates or parts usage agreements. While these programs can be efficient for the insurer, they can create a conflict if your interests are not the priority. The tension between insurer cost-control measures and consumer choice has been a long-standing issue, central to major litigation and consumer advocacy for decades 45.
The Vermont Department of Financial Regulation has the authority to enforce these rules. An insurer found to be engaging in steering can face significant penalties, including an administrative penalty of up to $1,000.00 for each violation 6. If a violation is determined to be willful, that penalty can increase to as much as $10,000.00 6. The history of automobile insurance regulation shows a consistent concern over practices that might limit consumer options, with congressional hearings as early as 1971 examining the need for reforms to protect car owners 78. The core principle remains firm today. The decision of who repairs your car is your choice, not your insurer's. This guide will help you understand how to exercise that right.
This guide provides general information for educational purposes and is not legal advice.
Your fundamental right to choose a repair shop
After an accident, one of the first and most important decisions is where to have your vehicle repaired. In Vermont, that choice belongs to you, and you alone. This is not just a courtesy, it is a fundamental right protected by state law. Your insurance company cannot legally require you to use a particular repair shop, a practice known as “steering.”
Vermont’s insurance laws are designed to ensure fair dealing between you and your insurer. The law broadly prohibits any trade practice that is an unfair method of competition or a deceptive act in the business of insurance 2.9 Steering a customer to a preferred shop, often to control costs or for other business reasons, can be considered such a practice. The state’s Unfair Claims Settlement Practices Act provides a strong framework for consumer protection 1. Under this act, engaging in unfair practices with enough frequency to be considered a general business practice is illegal 12. This means an insurer cannot systematically pressure policyholders into using a specific network of shops.
This principle of consumer choice has deep roots. For decades, consumer advocates and even Congress have recognized the potential for insurers to overstep, creating an imbalanced relationship with their customers 785. The right to choose your repairer is a key protection against this imbalance. It ensures that your priority, a safe and proper repair, is not superseded by the insurer’s business arrangements. The focus of the repair should be on restoring your vehicle correctly, a point often emphasized in consumer-focused guides on handling claims 5. Landmark legal cases have also challenged insurer practices nationwide, reinforcing the need for transparency and fairness in the claims process 4.
This right applies whenever your vehicle is being repaired. The situation is different only if your car is declared a "totaled motor vehicle," meaning the insurer has determined it to be a total loss 10. For all other repairs, from minor dents to significant collision damage, you retain control. You have the right to get an estimate from your trusted local mechanic or a body shop of your choosing. Your insurer’s obligation is to pay for a proper repair, not to dictate where that repair happens.
This guide provides general information for educational purposes and is not legal advice.
The Vermont law on unfair insurance practices
Vermont law provides a strong foundation for consumer protection in the insurance marketplace. State statute explicitly says that no person or company shall engage in any trade practice that is determined to be an unfair method of competition or an unfair or deceptive act 2.11 This broad prohibition is the bedrock of your rights during the claims process. The focus on fair dealing in auto insurance is not new; it has been a subject of public and governmental review for decades, leading to the development of important consumer protections 78.
The law gets more specific when it comes to handling your claim. A key provision, 8 V.S.A. § 4724(9), defines "engaging in unfair claim settlement practices" as an illegal act 1. This is not about an isolated disagreement or a single administrative error. The statute targets actions committed "with such frequency as to indicate a general business practice" 1. This means the law is designed to stop patterns of bad behavior, such as consistently pressuring customers to use preferred vendors or creating unreasonable hurdles for those who do not.
When an insurer tries to steer you to their preferred body shop, it can be considered an unfair practice. While they can provide you with a list of shops, they cannot pressure you, mislead you about your rights, or create unreasonable delays if you choose your own independent repairer. The goal of these regulations is to ensure the focus remains on a safe and proper repair, not on the insurer's business relationships or cost-saving arrangements 5.
These protections are not just suggestions. Vermont law gives the state's Department of Financial Regulation the power to enforce these rules. The Commissioner of Financial Regulation can impose significant administrative penalties on an insurer for violations. According to 8 V.S.A. § 4726(a), this can be a penalty of up to $1,000.00 for each violation. If the violation is found to be willful, meaning it was done intentionally, the penalty can increase to as much as $10,000.00 for each instance 6. These financial consequences create a powerful incentive for insurance companies to handle your claim fairly and respect your right to choose.
What actions count as illegal steering?
Vermont law prohibits insurers from engaging in unfair trade practices, which includes illegally steering you to a particular auto body shop 2. While you might think of steering as a direct command, it often takes more subtle forms. An insurer cannot use pressure, misinformation, or deliberate delays to coerce you into using their preferred facility. These actions are considered unfair claim settlement practices, especially if they show a pattern of behavior that suggests a general business practice by the insurer 1.
Here are concrete examples of what illegal steering can look like:
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Creating unreasonable delays. An insurer might intentionally slow down your claim if you do not use their network shop. For example, the adjuster might take an excessively long time to schedule an inspection of your vehicle at the independent shop you chose. They could also create delays by questioning every line item on the shop’s estimate, dragging out the approval process, or being slow to issue payment once repairs are complete 1. This creates a frustrating experience designed to make their preferred shop seem like a faster, hassle-free option.
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Providing inaccurate or misleading information. An insurer cannot lie or mislead you to influence your choice. This includes falsely stating that you will have to pay the difference in labor rates or parts costs if you go outside their network. They might incorrectly imply that your policy requires you to use a network shop to receive a lifetime warranty on the repair. This type of conduct, where insurers make claims about parts and repair quality to control repair decisions, has been the subject of significant litigation 4. An adjuster telling you that your chosen shop is not properly licensed or equipped, when it is, would also be a prohibited practice.
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Disparaging your chosen shop. It is an unfair practice for an insurer’s representative to make false or intimidating comments about your chosen repair facility 1. An adjuster might say, “We’ve had a lot of problems with that shop,” or, “I can’t guarantee their work.” These tactics are meant to create doubt and push you toward a shop where the insurer has a cost-saving arrangement 5. Concerns about this kind of insurer influence are not new; they have been documented for decades 78.
This is general information, not legal advice.
Rules for non-original (aftermarket) parts
When your car is being repaired, the insurer may want to use non-original equipment manufacturer (non-OEM) or "aftermarket" parts to control costs. Vermont law gives you specific rights in this situation. An insurer cannot force these parts on you without your knowledge and approval. These rules are considered part of the state's general prohibition on unfair or deceptive insurance acts 2.12
The law is very clear. If an insurer specifies the use of non-OEM parts for the repair, it must be stated on the written estimate 1. The estimate must clearly identify each of these parts. Most importantly, the insurer or body shop cannot use these non-original parts unless you give your consent in writing 51. This gives you the final say. You have the right to inspect the estimate and decide if you are comfortable with the specified parts. Landmark legal cases have centered on the quality and safety of non-OEM parts, reinforcing the need for these disclosures 4.
This requirement is not just a suggestion; it is a legal obligation. The use of aftermarket parts has been a point of contention between consumers and insurers for decades, with a long history of debate over cost-saving measures 78. If an insurer fails to identify non-OEM parts or uses them without your written permission, it is considered an unfair claims settlement practice 1. The Vermont Department of Financial Regulation has the authority to penalize an insurer for these violations. Penalties can be up to $1,000 for each violation and as much as $10,000 if the violation is found to be willful 6. This gives you significant leverage. If you see non-OEM parts on your estimate that you did not agree to, you should immediately raise the issue with the insurer and your chosen repair shop.
This is general information, not legal advice.
Penalties for insurers who violate the law
Vermont law gives the state’s chief insurance regulator, the Commissioner of Financial Regulation, significant power to enforce fair claims practices 2. When an insurer pressures you to use a specific repair shop or engages in other prohibited acts, the Commissioner can levy substantial financial penalties. These fines are not just a slap on the wrist. They are designed to make sure insurance companies follow the rules that protect you.
The law, specifically 8 V.S.A. § 4726(a), sets out a clear two-tier penalty system. The Commissioner may impose a penalty of up to $1,000.00 for each violation 6. This applies to any instance where an insurer is found to have broken the rules governing claims, whether for a minor repair or for a vehicle declared a total loss 10. However, if the violation is found to be willful, the penalty increases dramatically. A willful violation means the insurer acted intentionally or with reckless disregard for its legal obligations. For each willful act, the fine can be as high as $10,000.00 6. This higher penalty addresses situations where an insurer knowingly and deliberately tries to steer customers, creating a strong deterrent against such behavior.
These penalties can accumulate quickly. The law states the fine is for "each violation," which can be interpreted as each time an insurer improperly handles a claim. If an investigation finds that an insurer has been steering customers with enough frequency to show a "general business practice" of unfair behavior, the total fines can become very large 1. Such patterns of misconduct have been a point of contention between consumers and insurers for many years, leading to landmark court cases and extensive government review 74. The ability for regulators to impose these escalating fines gives consumers a powerful tool. By filing a formal complaint with the Vermont Department of Financial Regulation, you are not just seeking a resolution for your own claim. You are also alerting regulators to a potential pattern of behavior that could result in serious financial consequences for the insurer 5.
This is general information, not legal advice.
What to do if you suspect steering
If you feel an insurance adjuster is pressuring you to use a specific auto body shop, you should act. Your power lies in creating a clear, factual record of the insurer’s behavior. Follow these steps to protect your right to choose.
First, document every interaction. Keep a detailed log of all communications with the insurance company. For each phone call, note the date, time, the representative’s full name, and exactly what was said. Write down any phrases that suggest you will receive slower service, a less comprehensive repair, or more out-of-pocket costs if you use your preferred shop. Keep all emails and written correspondence. This careful record-keeping is a fundamental part of managing your claim effectively 5.
Next, communicate your decision to the insurer in writing. Send an email or certified letter that clearly states which repair shop you have chosen. If the adjuster continues to push back, ask them to provide their reasoning in writing. This simple request can sometimes be enough to stop steering behavior. More importantly, it creates a paper trail that proves you attempted to resolve the issue directly.
If the pressure continues, your next step is to file a formal complaint with the Vermont Department of Financial Regulation (DFR). The DFR is the state agency responsible for overseeing the insurance industry. Filing a complaint is a serious step that alerts regulators to potentially unfair or deceptive trade practices in the business of insurance 2. Your individual complaint helps the DFR identify patterns that may constitute a "general business practice" of unfair claim settlement 1.
To file, visit the DFR’s website and locate their consumer complaint form. Submit your detailed log, copies of emails, and any other evidence you have collected. Be clear and concise in your description of the events. This formal action can have significant consequences. The Commissioner of Financial Regulation has the authority to fine an insurer up to $1,000.00 for each violation, and up to $10,000.00 for each willful violation of the law 6. Your complaint provides the evidence regulators need to enforce these rules.
This is general information, not legal advice.
What happens if your car is a 'total loss'?
The rules protecting your right to choose a repair shop apply only when your vehicle is being repaired. If the damage is severe, your insurance company may instead declare the vehicle a "total loss." This determination fundamentally changes the claims process and your options. In this situation, anti-steering laws no longer apply because there will be no repairs to steer.
Under Vermont law, a "totaled motor vehicle" is defined simply as a vehicle that an insurance company has declared to be a total loss 10. Insurers typically make this declaration when the cost to repair the vehicle, combined with its potential salvage value, exceeds its actual cash value (ACV) before the accident occurred. The ACV is the market value of your car right before the collision, considering its make, model, year, mileage, and overall condition. This is a financial decision made by the insurer to manage the claim economically, a standard part of the auto insurance claims process 5.
Once your car is declared a total loss, the claim shifts from a repair process to a settlement process. The insurance company will pay you the vehicle’s ACV, minus any deductible in your policy. In exchange for this payment, the insurer takes ownership of the damaged vehicle and its title. They will then typically sell the car for parts or scrap at a salvage auction. Since the car is not being fixed, your right to choose a repair shop becomes a moot point. The entire framework of insurance practices, including those concerning repairs, has a long history of legislative review 7, 8.
While you cannot force an insurer to repair a vehicle they have deemed a total loss, you are not without recourse. Your power in this scenario is focused on ensuring you receive a fair settlement amount. If you believe the insurer’s offer for the ACV is too low, you have the right to negotiate. You can support your position by gathering evidence of comparable vehicle sales in your area and providing records of recent upgrades or exceptional maintenance. The insurer is still obligated to engage in fair claim settlement practices and cannot use deceptive acts in any part of the insurance business, including vehicle valuation 2.
This is general information, not legal advice.
Sources
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8 V.S.A. § 4724(9) - https://legislature.vermont.gov/statutes/section/08/129/04724
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8 V.S.A. § 4723 - https://legislature.vermont.gov/statutes/section/08/129/04723
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Lee R. Russ, Couch on insurance 3d (1995) - https://openlibrary.org/works/OL2998184W
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Avery V. State Farm Mutual Automobile Insurance Company (2001) - https://play.google.com/store/books/details?id=IqmdYTKyGckC
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Auto Accident Personal Injury Insurance Claim by Dan Baldyga (2002, AuthorHouse) - https://play.google.com/store/books/details?id=R8M3AgAAQBAJ
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8 V.S.A. § 4726(a) - https://legislature.vermont.gov/statutes/section/08/129/04726
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Automobile Insurance Reform and Cost Savings: Hearings, Ninety-second Congress, First Session... by United States. Congress. Senate. Committee on Commerce (1971) - https://play.google.com/store/books/details?id=UxM3ZkDwTx8C
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Automobile Insurance Reform and Cost Savings, Hearings Before by United States. Congress. Senate. Commerce (1971) - https://play.google.com/store/books/details?id=zdNFAQAAMAAJ
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Lee R;Segalla, Thomas F, Ronald a;Rhodes Anderson Mark S;Russ, Couch On Insurance, 3d (1984) - https://openlibrary.org/works/OL9354833W
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23 V.S.A. § 2001(14) - https://legislature.vermont.gov/statutes/section/23/021/2001
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West Group, Couch on insurance 3d (2002) - https://openlibrary.org/works/OL23878985W
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George James Couch, Couch on insurance (1995) - https://openlibrary.org/works/OL7533284W