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Comment by RocketOne | Hacker News Reader

Well, the "kickback from an unscrupulous auto body shop, which then submits wildly inflated repair fees to an insurance company" part definitely makes sense.

I do autobody and have painted my own cars in the past. Total cost for basic materials for an entire car is less than $600, depending on type of paint, color and finish.

But earlier this year my truck tapped, quite literally TAPPED the back of an SUV when it rolled three feet forward from its parked position. The SUV owner and I had to look several times, and wipe off dirt and dust to see a 2 inch crack in the paint in the hatch.

Total repair bill? $1800 for that damn 2" crack! It's robbery and there's no way it should cost that, but that was a 'discount' rate. I could've painted his entire SUV three times for that price!

The autobody industry is out of control and insurance claims are often ridiculously inflated.

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> I could've painted his entire SUV three times for that price!

I have no opinion on how much car paint materials cost but your logic that the $1800 is unreasonable because you can do the work three times for three times the bill of materials (~$600) illustrates a substancial misunderstanding of the cost structure of a business.

This idea that the selling price of a good or service should be some minimal amount above the bill of materials shows up quite a bit on HN and it is just wrong.

I’d like to know what sort of modern car you can paint for a mere 600 dollarydoos. With the modern paints being multiple layers of pigment/metallic flake/other layers of translucent colour I’d bet manufacturer correct paint is more than 600 dollarydoos just to buy for a small car.

Soul Red is 2 layers of colour/metallic flakes with clear on top. According to the shop where I got my car fixed you do 2 shots of each layer. For the new Renault red it’s 9 layers in total. http://www.roadster.blog/2015/02/mx-5-roadster-nd-colours.ht...

"I could've painted his entire SUV three times for that price!"

Your time is free?

i seem to recall that a tap under 5mph is not considered an accident in many (most?) jurisdictions. in any case, that's what bumpers quite literally are for (tested & certified for <5mph bumps), so the claim should be a warranty claim to their auto manufacturer, not an insurance claim.

moreover, most (all?) insurance creates perverse incentives (see: healthcare) unless strictly and carefully defined (which is likely never, since the incentive is to rope in as many policyholders as possible).

> moreover, most (all?) insurance creates perverse incentives (see: healthcare) unless strictly and carefully defined (which is likely never, since the incentive is to rope in as many policyholders as possible).

It can, but it really depends on how the system is structured. The problem today is more the financialization of insurance that is creating the perverse incentives. Since financiers can again use insurance pool deposits to fund other activities the incentive is to aggregate as much cash as possible (as you noted), rather than providing stable, reliable insurance.

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