How Do I Get Insurers to Pay My Labor Rate? Rochester MN

By Randy Trahan
4/1/2006

Labor rates have always been an area of contention between shop owners and insurance companies. From time immemorial, the two camps have been divided on the issue, and monumental arguments have arisen any time this subject is broached. So before we can arrive at any real answer to the labor rate question, we must first look at the components that impact rates.

What Is a Contract?
In an effort to bring some uniformity to how much a shop should charge or a consumer should pay per labor unit or labor hour, the idea of a standard labor rate was proposed (some would say forced) and adopted.

The ever-changing nature of economic factors that impact rates within a particular region include cost of living, cost of goods, previous labor rates, operations being performed and, lastly and sadly, what repair facilities are willing to accept. That last factor — what we’re willing to accept — is a vital part of the equation and relates to what we’re going to examine next. It’s important to understand that the true basis for why rates work the way that they do is a legal term called an “implied contract” or an “implied-in-fact contract.” The definition for this is, “A contract where the agreement of the parties is indicated by their conduct.” Let’s take a closer look at this ...

The basic elements of a contract are offer, acceptance, agreement, cap...