Auto Body Shop Owner Steps into World of Consulting
Written by Ed Attanasio, Autobody News
Published January 3, 2022
I was at a California Autobody Association (CAA) meeting recently and I couldn’t help but notice a well-dressed man at the front table.
It was an informational meeting with the Bureau of Automotive Repair (BAR) and after a few minutes I assumed he was a member of the BAR.
At one point, he scolded another auto body shop owner for asking a question. He said, “The customer is your customer, not the insurance company! I taught you that, but maybe you forgot?”
I almost laughed. After listening to him for a while, I could tell this guy is passionate about collision repair, as well as being very knowledgeable. I told myself I needed to meet him.
His name is Alex Kuang, owner of Redwood City Auto Body in Redwood City, CA. He wants to sell his shop to become a consultant and share his knowledge with the collision repair industry.
Kuang is the current president of CAA’s Golden Gate (San Francisco Area) chapter, and is trying to increase its membership by recruiting many of his friends who own or manage shops in the Bay Area.
Kuang came to the U.S. from China at age 10 in 1988 for a better future. His father was originally a butcher, but when he immigrated to the Bay Area, he became a chef specializing in Hong Kong-style cuisine.
Today, Kuang wants the world to know he can cook, and if you don’t believe it, take a look at his Facebook page when you have a moment, where he posts photos of his culinary creations regularly.
Kuang’s first job was as a painter, but he quickly decided he wanted to sell the paint instead of spraying it.
“I loved the product I was using and wanted to share the news, so I got a job with a distributor to educate other shops about it,” he said. “I did that for eight years and I learned so much because I was visiting multiple body shops every day. I was surprised to learn a lot of painters weren’t knowledgeable about the paint they were spraying. I told them the more you know the better you can be as a painter, and you could see it in the finished product. I enjoyed helping them to becoming better painters and better managers.”
In 2010, Kuang made the move from employee to employer when he purchased Redwood City Auto Body.
“One of my customers called me and said he wanted to get out of the business and he offered me a very good price,” he said. “I was selling paint and I didn’t really know how to run a shop, but I was ready to jump in. I was the new kid on the block in a competitive market, but I knew at least I could succeed by working harder than the guy down the street.”
The numbers showed Kuang’s passion and incredible work ethic were going to lead to healthy profits. During his first month as the owner, the shop did $16,000 in volume, but within just five years, the number---pre-COVID---had grown to approximately $300,000 monthly.
Kuang is a major advocate of the right to appraisal, to say the least. It’s a technique he’s perfected over the years by learning from the experts and through trial and error. Many shops stay away from it because they find out it’s complex and feel as though the insurance companies will win anyway, Kuang said.
It’s not an old scenario that happens every day in shops from NYC to LA. The body shop writes an estimate to fix the car, and then the customer’s insurance company comes in with a lower number. A lot of body shops will bite the bullet and cover the difference, while others will figure out how to cut their costs to accommodate the insurance company’s appraisal.
Kuang learned a long time ago eating the difference was no way to run a successful business, so he decided to educate himself and learn how to write what he calls the “perfect sheet.”
His estimates are well-known for being thorough, accurate and designed to beat insurance companies when he goes up against them over short-pay claims. He builds a case even F. Lee Bailey would be proud of, with stacks of photos, texts, emails, OE repair documentation, schematics---you name it.
It’s the appraisal clause, or the right to appraisal, and you will find one in most automotive insurance policies. It gives the customer a method to dispute the estimate provided by their insurance company when their vehicle has been damaged or totaled.
It’s not new, but more shops are using it now because they can see it works as long as they dot their I’s and cross their T’s.
Kuang found out the hard way because the first few times he tried to implement the right to appraisal on a repair, he stumbled.
“I realized you have to document everything in detail and then have the information on-hand or the insurance company will always prevail,” he said. “They are just waiting for you to make a mistake, and they know that many body shops aren’t skilled at performing this process. They got me a few times on storage fees, but never again. The appraisal clause is great for shops and customers, but insurers hate it.”
Just like he said at the CAA meeting, Kuang’s mantra is built on the concept the customer is the shop’s customer---not the insurer. But many shops forget that or ignore it.
When a policyholder decides to opt for the appraisal clause, it sets in motion an arbitration process that starts where both parties hire their own independent appraisers, Kuang explained. If the two appraisers are not able to agree on a specific number, which happens most of the time, they have to get a third-party involved to review their findings and conduct an additional inspection and assessment in many cases.
If two out of the three agree, that number is final and can’t be appealed.
Kuang has become highly adept at helping his customers navigate this tricky process and presents cases with a 99.99% success rate.
“We cannot do it ourselves, but we can assist the customer because otherwise the insurance company will eat them alive---I’ve seen it," Kuang said. "The insurer and the policyholder are the ones who have to pay for the arbitration, so sometimes, customers are reluctant to do it. But we convince them that this is the only way for them to get paid for a proper repair.”
Initially, the appraisal clause was a system that worked well for shops who knew how to use it, but now it’s a little more complicated, Kuang said.
“The problems began when the insurance industry figured out how to beat it, and today some insurers have changed the wording in their policies to the point where it nullifies the appraisal clause altogether,” he said.
Kuang is a maniac when following OE repair procedures to the tiniest detail because he knows his estimate will likely be analyzed in detail by at least two more sets of eyes. Often, he produces short videos highlighting OE repair procedures and calling out parts and processes often missed.
As a consultant, Kuang will enable more shops to use the appraisal clause and other techniques he has developed to get paid fairly on each and every repair. The insurance companies won’t likely appreciate his new role, but it’s never been a warm and fuzzy relationship anyway.
“Once they saw I knew how to succeed using this system, they started steering customers away from me---it was pretty blatant,” Kuang said. “The insurance companies have a long list of things they won’t pay for, and they don’t like it when they are smarter than they are.”
Kuang said he has big plans for his consulting company, and helping his shop clients to be smarter will be one of the first things he wants to achieve in 2022.