Auto Insurance Fraud in NY Remains at Crisis Levels & the ‘Fraud Tax’ Exceeds $200 Million for second consecutive year
Allstate responded April 26 to the Insurance Information Institute’s (III) announcement that fraud and abuse in New York State’s no-fault auto insurance system remains at crisis levels. III also revealed the estimated ‘fraud tax’ that New Yorkers paid in 2010 was $204 million—an amount exceeding $200 million for the second consecutive year. The New York State Senate Insurance Committee is holding a hearing on April 26 to examine the issue more closely.
Krista Conte, New York spokesperson for Allstate Insurance Company, said in response to the III announcement:
"We agree with the Insurance Information Institute that the scale of fraud and abuse in New York State's no-fault auto insurance system today has reached crisis levels. Not only is no-fault fraud (auto accident fraud) costing New York consumers and insurers hundreds of millions of dollars, it puts drivers at risk.
"Those who would commit this type of crime are taking advantage of the broken no-fault system and they are organized, calculating and part of a big business. In essence, the perpetrators of this crime are imposing a 'fraud tax' on honest, hard working New Yorkers by gaming the auto insurance system.
"Without the support of lawmakers, incidents of fraud will continue to increase. Responsible citizens are the victims. We urge lawmakers to enact comprehensive, meaningful no-fault insurance reform that puts citizens of New York first."
Study Says Most U.S. Consumers Want to Buy an Electric Vehicle (Eventually)
Plug-in electric vehicles may just be entering the market, but most U.S. consumers are ready to buy them. E Source recently analyzed data from the Nielsen Energy Survey and found that 85 percent of U.S. consumers say they would purchase a battery-driven car either right away (3 percent), when their current car needed replacement (57 percent), or when the technology is proven and it becomes more mainstream (25 percent). The caveat is that consumers strongly prefer (58 percent) plug-in hybrid electric (PHEV) versions such as the Chevrolet Volt. PHEVs have greater range than electric-only cars like the Nissan Leaf and only 8 percent of consumers prefer them. "We are seeing a substantial willingness for drivers to move to plug-in electric vehicles, but only if the manufacturers can provide the easy extended range of travel that Americans are used to," says Bill LeBlanc, senior advisor at E Source.
E Source also reports that younger drivers are more willing than older drivers to purchase the electric-only cars, and people who describe themselves as liberals are similarly more inclined to desire the all-electric cars than those classified as conservatives. "We see that all ages and all political mindsets like the plug-in hybrid vehicles equally," says LeBlanc. "But when it comes to the all-electric car, it appears to be seen as more of a 'green' purchase, rather than as a practical upgrade to a more-efficient vehicle."
Another factor that E Source looked at was how far people drive each day and how that affects their desire for a plug-in electric vehicle. Daily driving habits don't seem to affect desire for the all-electric vehicle; however, desire for the PHEV grows as people spend more time in their cars. "Overall, the survey supports the existence of a huge untapped market for electric vehicles that can be charged at night at home. People seem very ready to move to the next generation of cars and dramatically decrease the frequency of their visits to the gas station," reports LeBlanc.
New York is in an Auto Accident Fraud Crisis, Broken Laws Need to be Fixed Now, NYIA to Testify at Senate Hearing
Immediate reform of New York's fraud-riddled no-fault automobile insurance system is needed to stop criminals from cheating the state's citizens out of hundreds of millions of dollars a year, says the New York Insurance Association, Inc. (NYIA).
In testimony prepared for delivery April 26 at the New York State Senate Insurance Committee regarding no-fault auto insurance fraud, Ellen Melchionni, president of NYIA, identifies how the broken no-fault auto laws are forcing New Yorkers to paying for the fraudulent activities of criminals. Costs are spiraling out of control because bogus medical mills and unscrupulous medical providers, predominantly in the New York City area, are billing for treatments that were never performed, unnecessary or excessive.
"Criminals are committing rampant fraud, imposing a 'fraud tax' on honest, hardworking New Yorkers," Melchionni said. "Meaningful, comprehensive reform of the laws is necessary to fix the broken system that criminals are blatantly exploiting for their personal gain. There is not a silver bullet to solve this problem. Auto accident fraud is a moving target. The state needs to be vigilant in fighting this vast problem and cracking down on criminals who have created a 'big business' of fraud to cash in at the expense of New York residents."
"NYIA supports the substantive reform introduced by Sen. James Seward and Assemblyman Joseph Morelle, S2816A/A6286," Melchionni said. "This bill contains numerous remedies including giving insurance carriers adequate time to investigate fraud, encouraging efficient and fair settlement of disputes and creating tougher penalties for fraud."
"NYIA also supports two bills that would help stop staged auto accidents," Melchionni said. "We believe the majority of staged accidents occur during the first 60 days of a newly issued policy. Sen. Martin Golden and Assemblyman Carl Heastie have introduced S4507/A6346A, which would allow insurers to cancel new policies purchased with phony checks or credit cards—minimizing the opportunity for fraud. Another piece of legislation, S1685 sponsored by Sen. Seward, was passed in the Senate and now needs to be taken up in the Assembly by passage of A6177 sponsored by Assemblyman David Weprin, to create a necessary deterrent for criminals who prey on innocent motorists by staging car crashes."
"If there is not comprehensive reform, we are concerned that the present crisis will become progressively worse, leading to a system that is not only broken, but beyond repair," Melchionni said.
The New York Insurance Association (NYIA®) is a state trade association that has represented the property and casualty insurance industry for more than 125 years. For more information visit www.nyia.org.
SOURCE New York Insurance Association
GM's Volt, Nissan Leaf get top marks in IIHS crash tests
The Insurance Institute for Highway Safety (IIHS) crash tested the two first generation 2011 plug-ins for the first time and both earned top safety ratings, an endorsement of the automaker's view that you do not have to sacrifice safety for better fuel economy.
The Volt and Leaf earned the top rating of good for front, side, rear, and rollover crash protection. With standard electronic stability control, they qualify as winners of TOP SAFETY PICK, IIHS' award for state-of-the-art crash protection. GM's plug-in hybrid Chevy Volt and the Nissan's all-electric Leaf clearly save on fuel , but the size and weight of their battery packs add significant crash protection as well. The strong marks for front, side and rear crash protection also indicate automakers are using the same safety engineering in electric cars as they do in traditional gas-powered vehicles.
The Volt and Leaf are classified as small cars in terms of their overall length, width, and carrying capacity; however, their hefty battery packs put their curb weights closer to midsize and larger cars. "The Leaf and Volt's extra mass gives them a safety advantage over other small cars," said Joe Nolan, chief administrative officer for IIHS, on April 26. "What powers the wheels is different, but the level of safety for the Volt and Leaf is as high as any of our other top crash test performers," Nolan said.
The addition of the 2 electric cars brings to 80 the number of award winners so far for 2011, including 7 hybrid models. That lifts GMs’ current model tally to 12 and Nissan’s to 3.
GM and other manufacturers have lagged Toyota and other Asian manufacturers in developing fuel-saving gasoline/electric hybrids, which account for only a fraction of the U.S. sales market.
They hope their plug-in variants will better compete and catch on with those consumers demanding improved mileage performance in their daily commutes, especially with pump prices steadily rising and averaging $3.88 a gallon nationally. Gas in some areas already exceeds $4.
The Volt and the Leaf are classified as small cars but their battery packs raise their weight closer to mid-size and larger ones.
The Leaf weighs 3,370 pounds while the Volt is about 3,760 pounds. Most midsize cars are in the range of 3,200 pounds and the Chevy Impala, a large family car, 3,500 pounds. Heavier cars generally do a better job of protecting people in crashes but do less well on fuel savings.
The findings also contrasted with a lackluster Volt endorsement earlier this year from Consumer Reports on efficiency. David Champion, director of Consumer Reports auto test center told Reuters in February that the Volt was fun to drive but did not make sense financially to operate. He said consumers seeking value and top fuel efficiency would be better off buying a top-performing hybrid like Toyota's Prius or a Fusion by Ford Motor Corp. GM responded at the time that the review was hasty.
CA Senate Passes Airbag Fraud Bill Doubling Potential Penalties
California Senate Bill 869 was passed in committee (9-0) on April 25. The bill modifies the state's Business and Professions Code saying that a repairer who "fails to repair and fully restore the airbag to its original operating condition," where the customer has paid for the airbag as provided in the estimate, is guilty of a misdemeanor punishable by a fine of $5,000 or by one year in prison, or both. Existing law caps penalties at $1,000, by imprisonment not exceeding 6 months, or by both fine and imprisonment.
It is already fraudulent and a violation of the Automotive Repair Act to state on an invoice that an auto repair shop will repair or replace a part if it fails to do so. This bill strengthens the existing penalties on that violation specifically for airbags which are being replaced.
The Senate analysis of the measure suggests that possibly in the future some consideration should be given to strengthening the law even further. The analysis asks, "Should there be a requirement to repair or replace a deployed airbag?" Currently, there are no statutes requiring that an auto repair shop replace a deployed air bag, but the analysis suggests a law requiring that any vehicle entering an auto repair shop which has a deployed airbag must leave that repair shop in good working order.
A previous bill SB 427, tabled in 2009 would have established the same misdemeanor with the same penalties for a violation as this bill and would have additionally required the parts invoice for any replacement airbag installed to be attached to the final repair invoice. That bill was vetoed by the Governor, citing that it was duplicative of existing law and, therefore, added very little additional benefit to consumers.
The California Autobody Association (CAA) and the California New Car Dealers Association (CNCDA) opposed the 2009 measure citing the same administrative issues acknowledged by the Governor.
The CAA and the CNCDA support this new measure. The CNCDA states that it has had an interest in curbing the nefarious practice of parts switching and, therefore, support this bill since it narrowly targets the most egregious example of such conduct.
see previous story here
Your Local School's Auto Body Program Could Receive a $50K 'Makeover'
Applications Due August 31st
You can help your local secondary and/or post-secondary collision program receive a $50,000 Makeover through the Collision Repair Education Foundation's 2011 Ultimate Collision Education Makeover school grant. The application is available to download online and must be postmarked by August 31, 2011.
The winning school will be announced during SEMA 2011. Instructors are advised to begin the application early due to the required application information. Important Notes Regardless if your local school/college's auto body program wins the $50,000 Makeover grant, those schools that apply for the 2011 Makeover grant are the initial schools that the Foundation goes to when it receives in-kind product and monetary donations throughout the year.
In 2009, the non-winning Makeover grant applicant schools received close to $200,000 in product donation. Yes, the non-winners! Through the Makeover's application, the schools must list an itemized $50,000 wish list and through these lists, the Foundation can seek out industry supporters to donate these requested items for the schools.
Over 50 schools from across the country applied for the 2010 Makeover grant. The Ultimate Collision Education Makeover grant debuted in 2009 when Steel Center Area Vocational Technical School (Jefferson Hills, PA) was chosen as the recipient of the award. In addition to Steel Center AVTS receiving $80,000 from the award, the schools that applied for the 2009 grant still benefited from the Ultimate Collision Education Makeover program.
In total, the 35 schools each received an average of $5,000 in products, supplies, and equipment for a total value over $175,000. Every school that applied for the grant received at least one item to benefit their students and collision program.
In 2010, the award went to Bridgerland Applied Technology College (Logan, UT). The 2010 applicants have already had the opportunity to receive items from Airgas, Fibre-Glass Evercoat, Sherwin-Williams, UltraWiz, as well as Cintas technician shirts.
With the generous support from the industry, the Education Foundation is looking to at least double the total support from 2009 to 2010 for schools that applied for the grant. The Ultimate Collision Education Makeover school grant and other collision student and school support opportunities provided by the Collision Repair Education Foundation are made possible through industry donations. If you are interested in getting involved with the Foundation and joining its efforts to support the future of the collision industry, please contact Foundation Associate Director of Development, This e-mail address is being protected from spambots. You need JavaScript enabled to view it at 847.463.5244.
Sherwin-Williams Automotive Finishes A-Plus™ Network Adds New Estimating Contributor Program
Sherwin-Williams Automotive Finishes A-Plus™ Network is now affiliated with VehicleOwnersGuide.com, an online provider of powerful blueprint documents that helps collision repair shops identify any missed revenues. Its unique estimating analysis tool, EstimateScrubber.com, can be used in the repair planning process to prompt estimators to include commonly omitted items and better identify the repair cost associated with estimate line entries.
EstimateScrubber.com is compatible with most estimating systems used by the leading insurance companies and allows it to print a PDF file of an UltraMate®, Pathways® or Audatex® estimate. When this estimate printout is uploaded to EstimateScrubber.com the A-Plus Network member shop will receive a free, detailed P-Page analysis.
Painting with Waterborne at John Force Racing
by Paul Stoll, PPG Trainer
John Force Racing drivers have won the last five National Hot Rod Association (NHRA) events, dating back into late 2010. You don’t do that without some body damage to your Ford Mustang Fuel Funny Cars.
To view a PDF of this article please CLICK HERE.
John Force Racing has been using PPG’s Envirobase® High Performance waterborne basecoat on their cars for two years now. Envirobase® HP is very easy to use and repair, something that the paint team has the opportunity to do on more than one occasion—when things go bad on the racetrack. PPG waterborne basecoat dries to a thinner film than conventional solvent basecoats, helping the team keep the Ford Mustang bodies light. And PPG’s Envirobase® HP waterborne paint has helped John Force Racing go green.
I had the opportunity to go to the team’s Brownsburg, Indiana shop earlier this winter and spend four days helping paint the Ford Mustang bodies for 2011. I worked with Dean Antonelli, one of John Force’s crew chiefs and general manager of the Brownsburg facility. Paint shop manager and graphic designer Brandon Baker, painter Dave Gregory and Jesse Knox were all part of the team.
PPG’s MVP Spring Conference—Excellent, Entertaining and Informative
PPG hosted its invitation-only Spring 2011 MVP Conference in Palm Springs at the spectacular Rancho Las Palmas Resort March 27 through 29. The theme of the conference was ‘Journey to Excellence’ and excellence on many levels was provided for more than 350 fortunate PPG customers and special guests in attendance.
To view a PDF of this article please CLICK HERE.
Imagine a collision repair training event that combines a golfing retreat at a top-notch Southern California resort, high-end illusionists and magic tricks, nationally known motivational speakers, excellent and abundant food, and of course, serious and substantial shop management training. Add in a spectacular location, beautiful weather, and an intimate cocktail party—with live music—to introduce a continuous two-day trade show, and it’s hard to imagine a collision shop owner who wouldn’t want to be part of it.
Take note, industry, this is the way to hold a collision and refinish conference that leaves the attendees wondering what can possibily be done next year to top it. But it wasn’t just fun and games. In fact a good deal of the fun and games were designed with a serious purpose in mind, either to illustrate good and bad thought habits impacting business, or to invite introspection about running a collision business in an era of change and uncertainty. Clearly a lot of planning, refinement, and foresight went into designing the curriculum that drives the MVP Business Development Series from PPG.
