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In our lives there are many choices we must make on a daily basis. Some are minor and will affect us very little, like where we eat lunch. Others could alter our lives and those around us forever. These are the decisions I want to write about; the ones that can change everything.
    I have watched choices that others have made affect me personally, and I have experienced first hand the results of decisions I have made change the lives of those around me. So, as business owners, we must decide “what” to do and when to do it because decisions need to be made. Sometimes we can throw caution to the wind and just go for the gusto, while other times we must take time and cautiously consider the negative aspects of each decision.

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click for CRA President Amaradio's Letter to Body Shops

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I had an experience last week with what I call a “rogue supervisor”—an insurance company supervisor who is ignoring company policy and allowing his emotions to supersede his better judgment. It’s like a military commander having his own private war with no regard to protocol.

To read Lee Amaradio's column in PDF format, click here

I talk to many different shop owners across the country and it amazes me that we all have different opinions of the insurance companies that we as collision shop owners collectively deal with. I have insurers that I love to do business with that others shop owners hate. On the other hand, I hate many that the others love.
    Could it be that the same insurer would have different policies with different shops? This just wouldn’t make sense. If this were the case these insurance companies would need to create several different operating policies and no one would know what to do when. I know that insurance companies are smart enough to have a standard operation policy that is the same for all.
    If this is true than why do we have each company treating each shop or geographical area differently? Rogue supervisors are the reason. Supervisors that care more how their own numbers look than what is best for the insurance companies and the customers they represent.
    I think that the pressure to perform in the midst of heavy financial losses is making some insurer supervisors forego their better judgment. Add this to the fact that the department of insurance is not enforcing the current laws and we have anarchy within our industry. I know for a fact that when the insurer puts the policy holder’s satisfaction secondary they are treading on very dangerous ground. I want to believe that the majority of the major insurance companies would never allow the hard line approach that many claims offices are taking with their insureds.
    I spoke to a shop owner from Southern California who told me he advises his customers to by-pass claims and go directly to customer service. His advice to his customers was to explain to the customer service representative that they didn’t want to be transferred back to claims because they were unhappy with the way claims treated them. The results his customers received were satisfactory 100% of the time. This would support my theory that some claims offices are not adhering to company policy.
    In my shop, when a customer complains it gets my attention because I know that that unhappy customer will spread bad publicity whether the complaint is legitimate or not. If I am forced to eat a few bucks for the sake of my company’s reputation, so-be-it, because our reputation is what secures our future. Insurance companies must operate the same way. Why would they spend millions in advertising to gain customers only to lose them over a couple of bucks?
    I have seen long-time policy holders drop their insurance company after  a claim because they were forced to pay a small amount out of pocket for something that, according to state law, should have been paid anyway (like a reasonable labor rate). In most cases this is under $100. The news of their disappointment is not reaching the right people—likely because they are dealing with claims and not customer service.  
    I received a phone message at my shop from an insurance company supervisor (I’ll call him Mr. T.). I think that if the managers of this insurance company knew this was going on, things would change.
    I’ve done business with this company for years without any customer or company complaints. He told us that they will no longer pay our ‘exorbitant’ labor rates. I thought this was strange for several reasons. They had been paying our  “exorbitant”  rates all of last year. This year he was refusing to pay even last year’s rates.
    I will quote the phone message word for word below. I have it on a CD if anyone would like a copy (his boss is especially welcome to receive a copy). I believe I am dealing with a rogue supervisor because to leave a rude recorded message like this on my shop’s voice mail cannot be something that his company would approve of.
    Here’s the phone message word for word left for John, one of my managers:
    John, I received your fax, uh, I got your messages, um, the fact remains we have a labor rate survey on file. Nobody agreed... nobody gave you any agreement that we were going to pay you your exorbitant door rate. You guys don’t do any special work! You are not any better than anybody else! Our labor rate on file with the department of insurance affords us the ability to reasonably adjust any written repair estimate that you provide. As such we are sticking with $45 per hour and $32 for materials. We will not concede to your exorbitant rate period, end of story! If you’re going to charge it, you can collect from the claimant, end of story. Have a good day!    Hang up..
    Mr. T said that “nobody gave you any agreement that we were going to pay you your exorbitant door rate.
    First—I have file after file where this company paid me $48 per hour all of last year. Now they will only pay us $45! Does this sound like a reasonable adjustment? And no, we don’t have any agreement, but I do have agreements with other DRP’s that pay us $48 per hour. I wonder how that would look if we discounted this company lower than our DRP rate.
    Second—I have a copy of this company’s most recent survey and all of the data turned in is well over two years old. It was resubmitted in April of 09 with some data as old as three years. That’s not too reasonable to me—nor did this seem reasonable to the Department of Insurance.
    Third—Our agreements are always between the vehicle owner and the shop, as California law demands.
    Fourth—What is reasonable about this approach? He never asked one question about the repair process. He just denied the labor rate based on a bogus labor survey that according to some attorneys I’ve spoken with could be considered fraudulent because of the time the data was collected compared to when it was turned into the DOI. (Easy to prove intent to fix rates.)
    Why would this insurance company want to alienate a customer over $140 and have that customer file a complaint to the Department of Insurance (CDI). I’m not sure senior management understands what is going on.
    What really got me about this phone message is that I take offense to Mr. T saying we do not do any special work and are not better that anybody else. This part offends my life’s work, years and years of effort that means nothing to someone like Mr. T.  His statements prove that he knows very little about us and that there is nothing reasonable about his approach to adjusting estimates. Just for the record, I will tell you what separates us from every other shop on his survey.
●  Mercedes Benz USA Certified to include structure and aluminum repair (cost w/equipment $250K plus training $5K per tech) including an aluminum clean room.
● I-Car Gold Class Designation (training cost over $25K. Only 1 percent of the shops in the USA are Gold Class, much different than saying we have I-Car trained techs).
● Verifacts-member shop with excellent quality control rating (monthly fee)
● ALLDATA subscriber (monthly fee)
● BMW Factory trained and equipped (training is $5K per employee plus equipment).
● Toyota factory-trained and certified.
● Lexus factory-trained and certified.
● General Motors factory-trained and certified.
● Porsche factory Certification pending (training $7.5K plus equipment, fees paid.)
● ASE certified (on-site) full time mechanic.
    In addition, we sponsor training of over 1000 I-Car students per year by donating classroom facilities to help on going training within our industry
    My general manager Steve Saunders sits on the I-Car Gold and Platinum advisory board. Steve Saunders was also our local chamber of Commerce ambassador of the year.
● We were nominated Murrieta, California’s medium-size business of the year.
    We were the 2008 Collision Business of the year out of over 3,500 Assured Performance “Best in Class Shops” across the nation.
    We maintain a documented third party CSI score of 97.5% with a volume of over 6 million dollars per year.
    We are current members of CIC, ASA, CAA,and the CRA.
    Below is our equipment list that according to Mr. T makes  no difference.
● We have 42,000 sq. feet under roof.
● We have 5 Garmat down-draft heated paint booths.
● We have 2 complete overhead ProSpot inverter welders that cover the entire work area.
● We have a portable Tecna inverter welder that is brand specific for our Mercedes program.
● We have a complete aluminum clean room with all welders and specialty tools for aluminum repair. All of our techs are certified welders in aluminum and steel.
● We have a CarBench in-ground bench with the ability to jig all high end vehicles, a requirement for 2 of our OEM Certification programs.
● We have 5 Car-o-liners in the ground on lifts with Cartronics computer measuring system (these are approved by BMW with other OEM’s soon to follow).
● We have 4 Chief E-Z liner drives on frame racks with velocity computer measuring system.
● We have just invested in a MIG brazing welder as some OEM’s are now requiring.
● We have our own in house alignment rack and an ASE certified suspension technician.
● We have our own Enterprise satellite office with rental cars on site.
    I have invested millions of dollars in my shop between training and equipment. I will not go on about my own credentials but I can safely say I am an industry author and  spokesman and considered an expert in my field. You don’t need to look very far to see that I care about our industry and nothing just happened by accident, I didn’t just wake up one day and all was accomplished. No. It took a lot effort from a lot of great employees along with a well-thought out business plan over the last 30 years.  
    I am just trying to prove a point on how a “rogue supervisor” can create problems that otherwise could have been avoided.
    I think Mr. T is more than pushing the envelope of his company’s policy. Would a large insurer want their supervisor to leave a message that says we do nothing special and we are no better that anyone else? This just shows Mr. T’s ignorance because he hadn’t taken the time to be reasonable. Who do you think the policy holder thinks has the credibility? Was his approach in the best interest of his company. I don’t think so.
    This is exactly why we don’t have any consistency that bridges across claim centers. Until the insurers get their “rogue supervisors” under control and we see consistent guidelines, nothing will change. They need to quit rewarding the shops with the least amount invested and penalizing those shops that need to reasonably charge a couple of dollars more per hour because they have invested in the training and equipment to complete a proper repair (according to OEM requirements). Without standards we will never be able to find common ground and repair the animosity within our industry.
    Mr. T, As I have said before—if you treat me with respect, I will do the same for you. But when you shoot off your mouth when it’s obvious you know nothing about us, I take it personally and this is no longer a matter of $140, it has become a matter of principal.  

Last modified on Wednesday, 08 July 2009 10:24
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You Want How Much?

Do insurers really want to be educated in the proper repair techniques of collision repair, or do they just want it cheaper?
    I know that there are many out there that think body work is body work, and as long as you keep the consumer happy you have completed a successful repair. I have made the mistake of thinking that most shops and insurers want to repair the cars the correct way.
    This is just not true; many shops still look the other way as do many insurance companies. What the policy holder deserves has become secondary to making a profit.

Why is it so hard to repair vehicles correctly and turn a profit?

The reason is because we have a third party paying the bills and collision repair standards are all over the charts. When we get busy we are arrogant and demand that the insurers pay  to repair the vehicles correctly because we have such high standards then as soon as we get slow we agree to almost anything to make a buck.

    I understand that the economy is bad but it still will not justify what some shops are doing today to survive. We have made some great strides forward within our industry and where we have finally started to gain the respect we deserve and now I’m watching some shops take giant steps backwards. I’ve had an insurer that was paying us $48 per hour for body labor for all of 2008 and now in 2009 they are trying to get away with paying us only $45 per hour. This is because some shops think that to lower their price is the answer in this weak economy, once again I will say: we are our own worst enemy. How can we afford to lower a labor rate that is already to low to begin with? This will only put you out of business quicker and bring our industry back ten years.  
    I took my dog to the vet last week and for the office visit and some blood work the bill came to $450, I was shocked because I recently took my wife to a neurosurgeon and the bill was only $260 (after the insurance company made their adjustment). I paid the vet at the time of service but the neurosurgeon had to wait for his payment from the insurance provider. I was only responsible for my 20% co-pay. This is what happens when a third party pays the bills and this third party is left basically unchecked.
    I know malpractice insurance is more expensive for humans than for dogs. I see the insurance companies’ double dip by regulating what the poor doctors can charge but on the other hand their mal- practice insurance is going through the roof. Many doctors have been forced from private practice because of the escalated cost of their insurance.
    Medical care is at an all time low and no matter how much money you’re willing to spend on a policy there is no good medical coverage available, all medical coverage’s have been downgraded compared to ten years ago.  
    My wife has been trying to get a neck surgery for over eight months now. We have been jumping through hoops because the insurers want to rule out every other possible procedure before they allow her to have the surgery. Why? To save them money (because when a third party is paying the bills everything changes).
    As time goes on doctors are making less money every year, but is it the insurers fault or is it the doctors that agreed to work for less and less, and by doing so forced all of the other doctors to lower their rates just to survive? Now the entire industry is in the survival mode and a neurosurgeon is making less than the vet.
    So do insurers really want us to repair the vehicles the right way, Yes, absolutely, they just don’t want to pay for it. Why should they if they don’t have to?
    So for us to expect the insurance companies to pay for the OEM procedures to repair today’s vehicles is difficult because we are not sticking together by repairing these vehicles the same way. Once the insurer sees that they will be paying for the same OEM procedure anywhere the vehicle lands we will all get paid the to repair vehicles the right way. This sounds impossible and maybe it is, but the alternative if we don’t is quite grim.
    This is what happened to the doctors, and the insurers have completely overrun the entire medical industry. Please pay attention to what I am saying; the collision industry is not far behind. Doctors didn’t stick together and now it’s too late and the insurance companies completely control them, they even dictate the type of treatment we get.
    If they can do this to your body what makes you think it would be any different for someone’s vehicle. If you think things will get better by doing nothing you’re mistaken.
    What ever happened to good will? Something has been lost with the bean counters, Where is customer care? If the only thing you think about is cutting cost something has to give. I have recently watched several insurers change course and start concentrating on customer service once again and I am happy they are finally realizing that getting customers in the front door is only half the job, keeping them as future customers is the other half.
    The reason my vet makes more money than my wife’s neurosurgeon has nothing to do with running leaner or being a smarter businessman,
    No the reason is that the medical industry didn’t stick together and now they are completely dominated by the third party that pays the bills.  
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Last week I attended a meeting in San Francisco at the California Department of Insurance. This was a meeting I had looked forward to for quite some time. As the CRA’s president I was privileged to accompany some top shop owners as we made our case before the department heads. It’s too soon to know how successful the DOI will be with the evidence that they will be investigating but we did accomplish what we set out to do, and that is to establish the fact that there is a real problem and we need help.
    One of the things we agreed upon was that the collision industry is its own worst enemy, and because our standards are all over the board it is a difficult thing to regulate. We are not consistent in any aspect of the repair process in regards to both how we fix the cars and how we charge for those repairs.
    Every shop has a different opinion on how the vehicle should be repaired and what should be charged for, and what they choose to give away. At least the insurers are all in agreement on their business plan and that is to get the repairs done as reasonably (cheap) as possible. This is their primary goal and they stay focused on constantly trying to get it done a little cheaper.   
    On the other hand, many shops have been fighting for labor rate increases only to find others willing to work cheaper than ever. They are using the economy as an excuse to “butch” cars back together and save deductibles, all in the name of staying in business.
    If those shops would get their heads out of the sand and realize that their plans will come to a bitter end because they are only prolonging the inevitable. Soon there will only be a handful of shops qualified enough to repair the vehicles being built today. We are already to this point, do people need to die before these so called body shops and insurers realize that safety is becoming a real issue?
    What do you think will happen to our industry when a law is passed by some consumer group that will require all vehicles to be repaired by a qualified facility according to factory specifications? If we were a hospital we would be killing 50% of our patients and all it will take is for a third-party action to set a precedent and the attorneys will be all over any shop that tries to wing it.
    Here’s the bottom line. You can work as cheap as you want to, and if you can survive in this industry more power to you. “Good for you” if you can make it. But you must fix the cars the correct way, and many shops have no idea what that means. So if  and  when you start repairing the vehicle the way the manufacturer requires, it becomes evident that you must spend some money on training and  equipment and then the cost of the repair goes up.
    There is nothing in this world that says you can’t cut corners to save a little money but shops have crossed over a line that will ultimately cost them their businesses. They have stepped over the safety line—a line that should never be breached—and when you do it you have no excuse. How will you tell someone that their loved one is no longer with them because you were trying to save the insurance company some money?
    If we expect help from the Department of Insurance we must first help ourselves, by policing our own industry. I recently received an e-mail from a person named Raquel. She asked why our industry does nothing to police ourselves? She also asked me why no one ever writes about the numerous under-equipped and illegal body shops and why we do nothing to expose them. She has a valid point. If the DOI says we are our own worst enemy maybe it’s time we looked at a different approach to changing things within our industry.
    It’s time we start to expose faulty substandard repairs and identify any shop that continues to remain “Old School” in repairing today’s modern highly sophisticated vehicles. We are already an industry divided and it seems that the insurance companies always gravitate to the bottom feeders so  the only way for things to change is for us to quit sabotaging ourselves by having standards that are all over the road and start exposing the shops that continue to undermine what we are trying to do, which is fix the cars the correct way and to get paid for doing so. The present system penalizes the  qualified repairers and rewards the  shops with the lowest standards for repairing today’s vehicles.  
     We see body shops closing their doors because there is no bail out for us, so if we so desperately need a raise why would we lower our prices? Are we feeling guilty for running our businesses in the black? Will the insurers be better off with no qualified shops? Who will fix the cars that require special equipment and training? At some  point things will return to normal and all of  low balling  shops will be gone, because you will not be able to repair the cars, and the reason will be because you will not know how.
    With the economy we’re in, I see some insurers acting like they are broke and it is up to us to fix their problem. Remember, insurers had the best year in property and casualty that they have had in 80 years, but they lost more than they have ever had because of bad investing. They are still here (they still have the money) and are acting like it’s up to us to bring their profits back up. I have heard more than once; don’t even think of asking for any labor rate increases this year. I need to raise my door rate to 50 dollars per hour at the beginning of the year, which is a severely discounted door rate as it stands. How can I afford to give more discounts because some shop that is on its way out of business is working cheaper?
    My advice to all of the shops out there is to continue to charge to repair the cars correctly, and if you don’t know what that means, it’s time that you find out.
    Don’t be afraid to expose those shops that are not willing nor able to step up. If I was a doctor and half of my patients were dying, it would be a good time to step down.
    Insurers have some valid points when they say, “Why I should pay you when no one else is charging for that?”
    I’m not saying that they are right but I am saying that they have a valid point that is hard to defend against because we are our own worst enemy.     
    See coverage of meeting at autobodynews.com










Last modified on Tuesday, 06 October 2009 13:30
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I recently met with a gentleman who owns a body shop in Northern California.  I was showing him around my shop and as we talked about how we processed cars and managed systems, the subject of labor rates came up. He was quite surprised at the labor rate difference between his shop and mine. While he was impressed with our shop, he wasn’t impressed by the fact that we were only getting paid half of what he was.
    His door rate is $90 per hour and he is struggling with one insurance company in particular that will only pay him $75 per hour. While he was complaining to me, I showed him that my door rate was $48 per hour and this same company refused to pay us more than $38 per hour. I told him that I wished I had his problems. These are not made up numbers. The difference was big enough to spark my interest and do some research.   
    I track labor rates across the country and I understand why small differences in rates exist. But what I couldn’t figure out was why there is such a big difference in California between the North and the South. Does Southern California pay less for everything, therefore we can charge less and still make a profit?  If that’s the case, we would assume that Northern California must just pay more for everything so they are entitled to charge more.
    I decided to find out the truth behind the labor rate differences by researching different costs related to collision repair between the North and the South. I started with the cost of real estate and did a comparison of everything from paint materials to the cost of labor. You will be surprised at what I’ve discovered.
    We have all heard that with a higher labor rate you just total more cars so I added this to my research list. I looked at total-loss thresholds and tried to find the truth.
    Please keep in mind that there are exceptions to every rule and while I did do extensive research this is not what I would call a comprehensive study, but my personal inquiries that I believe prove my point.
    With this in mind, here’s what I’ve discovered as I talked to shop owners, parts vendors, paint suppliers, different employees, and researched shop profiles via the internet, etc.
    Common sense would tell you that the North must have a higher cost of doing business when it comes to fixed costs, such as real estate, especially because their labor rate is the highest in the Nation. I researched industrial property in the North and compared it to the South. This proved to be eye opening because the more I looked, the more I found that the South is actually more expensive. Now, as I said, there are exceptions to every rule, but my research revealed that the South as a whole was more expensive.
    Next I checked paint materials and the staple items. As I compared the price of the everyday materials we use I found that these prices were not higher in the North and in the South, where waterborne paint is required, the paint actually costs more by quantity.
    Next I checkd to see if the insurers charged more to insure vehicles in the North than they do the South. I expected to find that premiums would double. Once again I was surprised to find no significant difference.
    The same with total-loss thresholds. I have watched them become much lower (some as low as 50%) in the South. This is just another way to price fix. Lower the total-loss threshold and this will drive the cost of repairs down because the repairer will adjust the estimate to make the vehicle repairable. I say let the vehicles total. It hasn’t seemed to matter in the North. I would rather make more money on the vehicles that I’m repairing than lose money on saving totals.
    So why are the Northern shops able to get these rates? It makes no sense that a shop that has lower fixed costs gets a higher labor rate. Even a shop that has nothing close to the cost of training or equipment that I have invested in, gets twice my labor rate just because of their location.
    I continued my research and decided to look at labor costs and compare the two. They must be paying out much more than I am. We have all heard of the unions that the North had to deal with and we all felt sorry for them. As I continued my research I found the labor in the North was now diversified as much as in the South and there are few unions left. The more I continued my quest for information the more I realized that the reason the North is being paid twice that of the South is because they “ASK FOR IT”.
    This may sound simple but it means they are smarter in the North. It may have started with the unions, but it ended with all of the body shops in the North receiving double what the rest of the country gets. Because they asked for it, they got it. The flawed labor rate survey system (to which I am opposed) rewards any frumpy, dumpy, backyard body shop in the North with double the Southern labor rate, even for shops like mine with millions invested just because it is located in Northern California.
    So why do the insurers pay them these rates but refuse to pay them to us? One reason is we are more divided in Southern California. They stick together more and they have reaped the benefits.
    We need to get our heads out of the sand and raise our rates to match theirs. There is no reason not to. If they can justify those rates in the North, we can use the exact same formula to justify them in Southern California and the rest of the country.
    Yes, we would all be better off in the South if our rates were, say, $75.00 per hour. Wow, we would be so happy we would probably agree to almost anything, but that would be missing my main point.     Remember that Northern California is fighting to get $90 per hour. Is this because they are bunch of greedy shop owners? No, it is because we are so “UNDERPAID” and we have failed to realize that this is what the rate SHOULD BE for collision repair through out the nation. A fair and reasonable rate would be $90 per hour.
    The price fixing of the insurance companies has reduced our rates to less than half of what they should be. Do the research for yourself and compare our rates with mechanics, with hair dressers. Even the nail lady who does my wife’s nails makes more than most body techs per hour. I had my house pressure-washed and the labor rate was $40 per hour to run a pressure washer (Is that more skilled labor?).
    Times have changed! As this New Year starts, research for yourself, and then “RAISE YOUR LABOR RATE”. Not because of what you may be able to get, but based on what you “NEED”!
    We don’t need the insurers to throw us a $2 bone. We need double what we’re getting. We need to get what the North gets and we need it nationwide.
    So you think this sounds too easy to be true, then explain to me why Northern California’s labor rate is double ours. It is because they needed it and they ASKED FOR IT. There’s no other reason.  
    P.S. To all of you frumpy, dumpy, backyard shops, you will benefit also if you quit undermining everyone else by keeping your rates too low.


         
           
Last modified on Wednesday, 28 January 2009 17:45
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I write articles about our industry. I give shops my opinion on what I think they can do to turn this industry around because we need “change.” I have become an industry advocate and placed a well-deserved bull’s eye on my back. I will say what most other industry people only think.
    This all started because I was so frustrated that I could no longer contain it inside. Always striving to stay ahead of the competition, our shop decided years ago to deliver a quality product. Through the years the standard by which collisions are repaired have changed so much.Even though I was a quality shop if I were to repair vehicles today by those ten-year-old standards, I would no longer be delivering a good, honest repair to my customers.
    Take a look at anything from cell phones to computers and you will see that 10-year-old technologies no longer measure up. We are continually raising the bar with everything in America; this is just the way things are. Remember the first cell phones that needed to be installed in your vehicle? What if we tried to sell those cell phones today? People would laugh at us. Things have changed!
    Remember the Shade Tree mechanic – where is he today? Today’s vehicles require diagnostic computers that tell the mechanic what is wrong. Cars have changed. Try to change spark plugs on some of today’s vehicles and you will be shocked at what an ordeal it is.
    Although the equipment required to repair vehicles today is quite a bit different than the old days, some collision shops are still repairing collisions and charging the way we did ten years ago. This really needs to change!
    I remember when color match was the main concern of my customers, cars were different, and the consumer was less demanding. Today the customer expects the color to match; the old days of trying to sell a color that isn’t spot on are gone. The consumer has become so accustomed to getting things done correctly that they expect it. So if an insurer tells you that they refuse to pay for a blend or to color sand and buff, we can no longer take “no” for an answer. We should charge them and not worry when they tell us that the shop down the street never blends anything.

So how do we keep up?
Change is how! Many of today’s shops have fallen behind the times and are being encouraged to stay in the past by the insurers. I have heard so many times that “we are the only shop that charges for this or that.” Maybe we are the only ones doing it. I know of shops that still pull things on the floor and, believe it or not, they are on many of the insurers preferred list.
    Why would an insurer recommend a shop that they know is substandard? Because they save money. This is the only reason. They know that they assume no liability for the repair; so they are essentially off the hook.
    If a question about the repair were ever to make it into a courtroom the insurer would say, “We are not the repair experts, we don’t tell them how to repair the vehicle, they are the experts.” We all know this is true, we hold the bag, and we are the ones responsible!

{mospagebreak} 

    If we assume all of the liability for the repair, why do the insurers write estimates that we work by? Why do shops even look at an estimate that is written by a rookie adjuster that doesn’t have a clue how to repair a collision? Some are taught by their superiors not to even look at our estimates for the simple reason that they are trained to purposely leave things off the estimate.
    Common sense would tell you that they shouldn’t even have the right to write an estimate or have any input into the repair process unless they were the experts and shared the liability. We are the collision repair experts and, by their own words, the insurers are not the repair experts.
    The law says that the insurer has the right to reasonably adjust our estimates. There is nothing in the insurance code that gives an insurer the right to write an estimate or control the repair process. Adjusting an estimate is completely different than writing one.

Make the changes now
If you want things to change for your shop you need to start today. I suggest that you tear down every vehicle and write a complete estimate. If an adjuster tries to hand you an incomplete scratched out estimate, don’t accept it. This takes diligence on the shop’s part because the insurer will delay the repair and pass the buck on to you.
    We have every customer authorize a teardown. We take a ton of photos for the adjuster but we work for the consumer and our responsibility lies with them. The BAR requires us to do this and when we do it any other way we are non-compliant with BAR requirements.
    The vehicle owner is our customer and we need to educate them at the time of drop off. Let them know that you work for them and have their best interest in mind. Explain the potential delays could be if you have trouble coming to an agreed price with the insurer.
     Next you need change the way you deal with the insurers. It’s time to educate the insurers that you deal with about why you are charging for any item or procedure in question.
    Show them OEM documentation or use ALL DATA documents. I have found that when you prove that something is required, the insurer is powerless to deny it. Now you move the liability over to their side. In 30 years, I have never found an insurer willing to assume any liability for any repair.
    Anyway, yes, I am trying to change the industry and I’m willing to put myself on the line, because someone needs to. The days of sitting back and waiting for something to change are gone.
    I will speak out and tell the truth about what is going on. I will continue to change this industry one shop at a time, one insurer at a time, one tech at a time, one training program at a time.
    I will continue to write articles and give information and hope that you will be that one shop that “gets it” and realizes that the “change” starts with you.

 

Last modified on Wednesday, 31 December 2008 11:32
Tuesday, 25 November 2008 14:10

Amaradio -- It’s Just Like A “Real Rolex”

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I work for a major auto insurer and I have been chosen to purchase my supervisor’s retirement gift. I’m personally responsible for purchasing his “Gold Rolex.” My boss deserves it. Let me explain.
Last modified on Tuesday, 25 November 2008 14:52
Monday, 27 October 2008 14:15

Amaradio --- Doomsday or Opportunity Knocks

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I didn’t have a clue about how bad conditions were in the world until the dire circumstances were pounded into my head by the media. Things are bad, but I’ve seen worse.
Last modified on Wednesday, 29 October 2008 15:20
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Labor rate surveys were established as a starting point for negotiations. They are intended to create a floor to build upon, not a ceiling to keep prices artificially controlled. Today they are not serving any purpose other than keeping the cost down for the insurers. Insurers have even been bold enough to force the consumers to pay the rate difference when negotiations break down. It’s ironic because the code states that the burden of proof lies with the insurer, not the consumer.
Last modified on Wednesday, 03 September 2008 22:24
Thursday, 05 March 2009 11:09

Amaradio---Keeping Quiet From Now On

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I want to start out by saying “I’m Sorry” to all of those questionable insurance companies that I have offended by my articles.
    Your message to me has been loud and clear and I am afraid that you may be able to blackball me and put me out of business.
    In my arrogance I thought that I was big enough to make a stand and soon other shops would see what I was doing and follow, but the truth is that few have. Most shop owners like the bullseye on my back but are not willing to step up and change things. You are right, Mr. Insurance Company, you are bigger than me and you are able do considerable damage to my company.
    I realize that I have been mistaken to stand up against you by defending the OEM  repair procedures and to make sure that my customer receives a repair that is completed the way their manufacturer recommended.
    I’m sorry for acting like I know more than you when it comes to the repair process, I will start by repairing high strength steel immediately. I am sorry for voicing my opinion about aftermarket parts and from now on I will keep quiet when you deceive your insureds by telling them that they are the same or better than OEM. I’m sorry for measuring the frame of any vehicle with a measuring system.         

From now on I will promise to use my tram gauge and measuring tape and I will never use a bench with jigs again, no matter what the manufacturer recommends or requires.
    I’m sorry for expecting to get paid for all aspects of the repair process. I must have misunderstood when you told me that you wanted to pay us for what we did.
    I was unaware that you didn’t acknowledge the “P” Pages. Now that I understand that you have the right to pick and choose what part of the database you decide to use things will be much easier. I will buff all cars for free, and as far as block sand and fill, I really don’t know what ever got into me and I promise you will never see something so ridiculous on any of my estimates ever again.
    I will make sure to use things like corrosion protection, weld through primer, and seam sealer at no cost to you.  I’m sorry for itemizing items on my estimates and I will make sure to lump these items together whether I’m BAR compliant or not.
    I promise to remove words like customer choice, quality, and safety from my vocabulary.
    I will promise to keep my mouth shut and recognize that your adjusters are the collision repair experts.
    I promise in the future to repair the vehicles in a way that saves you money and willfully expect to assume the total liability for any repair method that you recommend.
    Please remember my priority will be to make you money and to prove this I will stop all improvements and training. We will focus on your metrics and keeping your cost to a minimum. My profit will always be secondary to yours.
    I’m sorry for taking the extra time on some repairs trying to keep some of your more difficult policyholders happy. I understand that having a happy policyholder is second to cost.
    I’m sorry for this misunderstanding; I thought a happy customer that continued to renew his policy was a feather in our cap.
    I’m sorry for those policyholders that I informed of OEM repair procedures.
    I’m sorry for thinking that I had the right to inform your policyholders with information related to the repair of their vehicles.
    I apologize and in the future MUM is the word.
    Most of all I want to apologize for my arrogance and I want you to know that I have had a change of attitude and I promise that I will agree to anything if you will just send me more cars.  

 NOT!

While there are many good insurers out there that work well within our industry this article is directed to those other insurers and shops that continue to undermine the collision repair process, and continue to go from bad to worse, this article is intended to show how futile their approach really is. 

Last modified on Friday, 12 June 2009 07:16
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