Just about every driver knows the basics of automotive insurance. Customers pay into a pool in case of a specific event such as an automobile accident or weather disaster. When that condition is met, the insurance pool pays the customer a variable amount to have the damage fixed and mitigated. Insurance companies offer several other services, in addition to simply pooling money, to help mitigate an emergency or disaster. Insurance companies are also in the business of saving money for themselves as well as their customers. A major source of savings on behalf of both the driver and the insurer is a negotiated rate with a repair service.
A negotiated rate is a discount offered to customers of an insurance company. The insurance company typically negotiates for these rates with companies who can still benefit for repeat business at a significant discount to standard rates. Negotiated rates as common across many areas of insurance. Both medical and automotive insurance companies typically have a negotiated rate on services that a customer may never realize they get as part of an insurance plan.
The negotiated rate will vary depending on the insurance company and the service that have entered into negotiations. For many services, it can be dramatically less than the standard rate offered to the public. This can mean savings even if a driver doesn’t use the insurance and risk an increased deductible. When major damage occurs the insurance company can usually suggest a service they have a negotiated rate with to ensure savings across the board.