Spending Other People’s Money

Someone bumped into my car in a parking lot but wasn’t decent enough to leave a note. The hood of my car was damaged. I went to two reputable body shops. One quoted $850; the other quoted $740. As body work goes, it’s a small job. Because the bill isn’t much more than my deductible, I decided to pay out of pocket and not bother with an insurance claim.

Both body shops told me if insurance is involved, the repair bill will be over $2,000. They will have to fix it "the right way." Instead of just repairing the hood, they will have to replace the hood and repaint the fenders to match the color. Both also told me I will not notice any difference with my untrained eyes if I only have them repair and repaint the damaged area. Since I’m paying the bill, I chose the lower-cost option.

What if the driver who caused the damage gave me his or her insurance information? Guess which option I will choose? Fix it the right way, of course, however marginal the quality difference may be. I don’t have to care if I’m spending other people’s money.

Think about it for a moment where this "spending other people’s money" phenomenon exists. It happens all the time in health care. Although I don’t watch much TV, I’ve seen plenty of ads for powered wheelchairs because "Medicare pays for it." If you give people money, they won’t necessarily use it to buy a powered wheelchair. But if Medicare pays for it and there’s no way to get paid cash if you don’t ask for one, then why not? And you wonder why health care is so expensive.

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  1. Deacon Bradley says

    Great point! A friend of mine was just telling me about how he’s become a conscious consumer of health care as a result of a cheap health care plan. The doctor told him, “I’m 90% certain this isn’t ___ but I’m going to run a test just in case.” Since my friend knew he was footing the bill for any lab work he said NO THANKS! Maybe we need more lousy insurance plans instead of cadillac plans.

  2. moneybum says

    No, you would not get it fixed the expensive way. You would have his or her insurance issue you a check for the estimated repair and a rental car. Then you repair it the cheap way and pocket the difference.

    Someone once hit me from behind. I called her insurance and they sent and insurance adjuster. He said I have two options. I can get it repaired and the pay directly the garage or they can pay me an estimate. I opted for the estimate and pocketed the a $500 profit. Their estimates are always for thorough repairs.

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