State Farm’s foray into parts procurement. Growing dissatisfaction with direct repair programs. “Underwritten” initial estimates by insurers. These were among the most talked-about topics in the industry this past year. Here’s a quick review of the year through a collection of some of the most memorable, important, interesting or enlightening quotes heard around the industry during 2007.

    “I can’t tell you the number of calls I’ve had saying, ‘We had an issue pop up in our state. We did our due diligence. We tried to contact the Department of Insurance and submitted an inquiry and we’re not getting any response. Or they say they can’t help us.’ So there’s a lot of questions from repairers about what they need to do in the event that they have an issue they are trying to resolve.”
    – Dan Risley, executive director of the Society of Collision Repair Specialists (SCRS), expressing in January the frustration he hears from collision repairers getting little or no response or action from their state department of insurance or other government regulators to concerns or questions pertaining to claims issues.

    “We got in front of a group of state insurance commissioners and started outlining some of the issues we’ve talked about today, and you could not believe the eyes that were popping out of their heads in shock and disbelief. When we were done with our presentation, we had six or seven of them come up and say, ‘We want to spend more time with you; we want to understand the issue more.’”
    – SCRS’ Risley, speaking later in the year about a presentation he made before the National Association of Insurance Commissioners.

Desk audits legislated out
“From a practical standpoint, the passage of this legislation means that repair shops will no longer be tied up in disputes based solely on an insurer’s or third-party auditor’s view of a photograph of a damaged vehicle. In addition, the legislation ensures that shops can continue to work with parts suppliers with whom they have established a good working relationship and who they can rely on to provide quality parts and good service.”
    – Judell Anderson, executive director of the Alliance of Automotive Service Providers in Minnesota, on legislation passed in her state that prohibits insurers from adjusting a claim without a physical inspection of the vehicle (eliminating so-called “desk audits” based on photos), and prohibits insurers from requiring that shops use a particular vendor for parts.

Painting a positive picture
“We are delighted to complete our merger with Keystone…Keystone’s aftermarket product line is a perfect complement to LKQ’s leading presence in the recycled parts marketplace. We now have an expanded national network of nearly 300 facilities that allow us to offer readily available, high quality recycled, refurbished and aftermarket collision repair parts to our customers.”
    – Joseph Holsten, president and CEO of LKQ Corporation.

    “This is not hotheaded or suicidal insurrection…Rather, it is what we at CARSTAR have begun talking about as “responsible push-back.” To us, “responsible push-back” means standing our ground on the basis of the facts of our work. It doesn’t mean threatening to give up relationships with insurers if we don’t get immediate relief. But it does mean letting our insurance partners know, for example, that a partial blend on a panel doesn’t reduce time and materials by 50 percent, and that many shops already deliver consumer experiences that meet and exceed their expectations – and that those of us who meet those standards will not sit passively by and comply with new rules that are not grounded in the relevant facts of safe and responsible vehicle repair or customer care in our shops.”
    – Dick Cross, chairman of the board of the national CARSTAR chain, in an open letter to the industry last spring.

Bad to worse

Lou DiLisio

“I’ve been part of this industry my entire life, and in the last year, I gotta tell you, the things I’ve seen going on in this industry just make me sick to my stomach…We need to unite and start to address some of these issues instead of allowing people to run all over us. Enough is enough. I’m not blaming any one segment. We all have blame in this thing. The insurance companies have abused the database times to the point where the repair facilities are going after the information providers and scrutinizing tenths of labor on individual operations. And the reason is because it’s the only outlet they have to try and collect an extra tenth of an hour to pay their bills at the end of the week.”
    – Lou DiLisio, an industry consultant, one of a number of participants at the Collision Industry Conference (CIC) in Atlanta last spring issuing passionate pleas for changes in the industry.