Share the blame

There is plenty of blame to go around as collision repair trade associations court insurers as partners and the International Auto Collision Exposition (NACE) programs are heavily influence by the insurance industry.

Like hooking a fish, the insurance industry has been reeling in the shops to gain control. The big hook was set in 1988 with Allstate's PRO program. The final hook may be State Farm's new Select Service program, which is rolling out now across the country. State Farm's new program requires repairers to put State Farm repairs first in line, handle total losses for free, eliminate storage charges, participate in rental car coverage for repair delays, indemnify State Farm, and potentially source parts from a State Farm selected vendor, among other things.

Lombardozzi estimates that the window for change to get the insurers out of the collision repair business is about 18 months.

Develop customer-focused business

To begin a customer-focused business, Lombardozzi said, it is important to know why the customer comes into the shop.

"Is it to get an estimate or to have the vehicle repaired? If it is to get the car repaired, make sure to get a signed repair authorization," said Lombardozzi.

Lombardozzi added, "An insurance company estimate is meaningless when the vehicle is being repaired in your shop."

He said no one could write an estimate in 10 minutes. An estimate should be a blueprint for the repair, including all the repair procedures. While giving the insurance representative an opportunity to look at the vehicle in the shop, Lombardozzi cautioned against negotiating with the insurance estimator.

"Once the insurance estimator asks you to negotiate, you are treating the insurance company as the customer," said Lombardozzi. "Why do it? If you wrote a good sheet, why would you want to negotiate it downward?"

Lombardozzi said, "You are the CEO of your company. If I want to negotiate, bring in the chief financial officer of the insurance company and I'll negotiate."

Sending in an estimator to negotiate is the equivalent of a real estate firm sending in the janitor to negotiate with Donald Trump when he wants to buy a piece of property, according to Lombardozzi.

"Do not allow the insurance company into the contract for repairs between you and the vehicle owner," said Lombardozzi.

Instead of using hours, Lombardozzi suggested repairers write everything in dollars and cents. The hours on estimates are a convenience for the insurance industry. It makes it easier to one-tenth a shop to death in order to reduce the payout. Each repair procedure has a dollar value.

"The final invoice is a factual document," said Lombardozzi.