Smith pointed out some positives that have come out of issues and strife in the collision industry this year as well.
“I would like to think that one of the most positive and significant occurrences is the collision repair industry associations recently coming together to reach an accord regarding ‘Industry Standards’ and the acknowledgement that Original Equipment Manufacturers (OEM) recommended repair processes, procedures, parts and materials are indeed the Collision Repair Industry’s ‘Standards’ by which all repairs should be performed and judged,” said Smith.
According to Smith, this issue was long overdue and presents a perfect opportunity for state and national associations to work together on issues beneficial to the collision repair industry at large and the consumers it serves.
Auto Damages Experts also provides post-repair inspections on vehicles repaired at other shops in various situations. Technicians at ADE have even been called as expert witnesses in court cases pertaining to vehicles. Smith said that through some of these post-repair inspects, the overall reduction in repair quality in this industry became evident to him and his staff.
Howard Batchelor, Executive Director of the Georgia Collision Industry Association, also talked with Autobody News about his view of the collision industry over the last year.
“One of the industry’s biggest issues is the influence insurers have over body shops right now,” said Batchelor, “You pretty much have to be on a DRP program to survive in the industry right now.”
Batchelor said he sees insurers getting more involved in the repair process recently—not just the claims process.
Batchelor said he sees insurers wanting an OEM parts discount and asking for large discounts on entire jobs from their DRPs, forcing shops to sacrifice profit and allowing the insurers to manipulate the repair process.
“They say steering doesn’t go on, but we all know it does,” said Batchelor.
On a local level, Batchelor mentioned how price manipulating by insurers, by setting paint caps and charging some materials items as sublet items or mechanical repairs at body repairs, they are manipulating the amount of tax they pay the state. Batchelor and the GCIA have worked with their state insurance commissioner to address this issue.
“We {the GCIA} are here to inform, educate and help shops be more profitable.”
Batchelor also sees many independent shops relying on DRP work in an industry where MSOs are the only growing portion of the industry.
“Independent shops and even dealership body shops are shrinking and struggling, and really have to have DRP relationships to stay in business right now,” said Batchelor, “Relying on DRPs for business is like putting all your eggs in one basket—you’re giving up a portion of your profits for increased volume.”
Florida PIP Fraud Continues to Gum Up the Works
The automotive claims industry in Florida has seen thousands of instances of fraud over the last year, continuing to drive up insurance costs for consumers and put shops in a price pinch.
Efforts by the state of Florida and several consumer groups hope to curtail the fraud’s affect on consumers and the collision industry for 2012.
“The bottom line is that if PIP is not transformed this year, Florida will continue to lead the country in questionable automobile claims, inviting even more criminal activity and putting Florida’s consumers and businesses at risk,” said Paul Blume, Property Casualty Insurers Association of America’s senior vice president in charge of state government relations.
Georgia Continues to Challenge Insurer-Set Labor Rates With Association-Gathered Surveys
Georgia continues to challenge the insurer’s set labor rates with their own, association collected, labor rates surveys.
The surveys, collected for their fifth year in a row this year by the Georgia Collision Industry Association (GCIA), help Georgia body shops negotiate better labor rates with insurers.
“Shops need to realize that this survey is intended to help establish a fair market rate in the marketplace,” said Batchelor.
