Monday, 28 February 2005 09:00

Insurers will gobble up any concessions repair shops make

Written by Dick Strom

"There's a sentiment in this business that has surfaced among the body shop owners who've been victimized by the current trends of commerce. While there are quite a few valid complaints with regard to direction of work, interference with the business of independent body shops, and manipulation of pricing and bids - all of which are very valid and in some cases actionable - there's a thread of entitlement that accompanies that state of mind… some shop owners declare that they have a right to a profit, which is fundamentally wrong. 

"Even though no one deserves to have their customers steered away or to have their reputations trashed, no business has a right to a profit, much less a right to be in business. We're all subject to the vagaries of the marketplace, the economy and our reputations… There are no guarantees… be it a street vendor of hot dogs or a Wall Street trader." wrote Charlie Barone in his article Bull in the Body Shop, published recently in BodyShop Business.

Or a collision repair professional. I believe the end we in the collision repair industry may desire does not justify taking illegal measures with respect to repairer- insurer-consumer business relations.

Whatever "injustices" the collision industry has to deal with today are a direct result of what this industry has allowed insurers to get away with in the past. Understanding why insurers get away with what they do is as simple as understanding why your children or grandchildren got away with shenanigans.

Trial balloon

It starts out with insurers putting out a small "trial balloon" (sound familiar?) by suggesting or demanding of several hungry shops in an area not to charge for hazardous waste, bagging vehicles, and the like. Soon all the other shops get the "you're the only one who charges for that" lie (they never are "the only one") crammed down their throats, resulting in multi-million dollar savings for insurers, and multi-million dollars scrubbed from shops' bottom lines.

As some shops fall for this ploy, insurers will then put out another "trial balloon" - this one a little larger for, say, not paying for blending or blending only into sail panel. Some hungry suckers will fall for this too, and the cycle will continue on. Soon every other shop is gagging over this added wadding in their throats as insurers - leveraging shops against each other - again run to the bank with millions more.

Too often otherwise honest collision repairers crumble to outside pressures to fraudulently conform for the sake of getting most of the money insurers owe them.

Too often expediency prevails

Too often otherwise intelligent collision repairers give up the pursuit of getting paid for each and every operation and material product required in the repair process rather than prove to insurers why they need to be paid for what they have done.

Too often otherwise well-trained collision repairers take risky shortcuts to make up for money insurers withhold rather than documenting their work and demanding reasonable compensation for it.

Too often otherwise prudent collision repairers prove they don't deserve any better treatment from insurers by "getting even" with them - in the process risking their own reputations, the concerns of their customers, and further miring the collision industry as a whole.

Too often otherwise business-savvy collision repairers are suckered into great expansions and expenses for additional techs, tools, and training, by insurers who promise untold steered business at an unrealistic discount.

Too often insurers view and treat the collision industry with disdain and contempt as they see the extent to which repairers will scramble to make ends meet, and save insurers big bucks. Too often insurers laugh at us as shops scrap for available work like so many dogs for a few mangy bones.

Too often insurers cost-cut everything that in any way costs them money, knowing there are abundant numbers of shops who will go to any extent to prostitute themselves and the collision industry for the chance to take a job away from a competitor. Far too often the problems the collision industry faces are of our own making.

Nobody owes you nothin'

Neither the insurance industry, nor any other industry or government institution, owes you and me anything - let alone a living. We voluntarily chose this occupation, of our own free will. And as my grandmother warned Mom when she voluntarily chose to marry my dad, "You've made your bed, now you have to sleep in it" - the obvious implication being, "Don't come sniffling back home if things don't work out as you dreamed… work out your own problems!" The collision industry should have that kind of constitution and be working out our own problems honestly and legally.

The insurance industry has no more control over the collision industry than the collision industry has given it.

Don't feed the bears

A friend likens the extent to which we have allowed insurers to control our businesses to feeding the bears in Yellowstone (go figure who "the bears" are and what they're being fed). "One of the first signs a visitor to Yellowstone National Park sees is 'Please do not feed the bears.'

"Actually, the sign should read: 'If you do feed the bears, please do not stop feeding them, as bears do not understand this concept.' You see, as long as you are nice and cooperative to the bears, everything is fine. But once you stop feeding them, or run out of goodies to give them, they get downright hostile and nasty, and sometimes they will rip the roof off your vehicle.

"Luckily, the vehicle right behind you is willing to take up where you left off. You escape with some damage, but you are alive, and the next vehicle is now pacifying the bears. This all mimics so many insurance companies with their DRPs… everything is fine and dandy until you have the audacity to stop the free goodies."

And don't forget, the bears get bigger each day and so demand more. Isn't it time you stopped supplying free goodies to the bears, regardless of what your competitors do?

Dick Strom, Modern Collision Rebuild, 9270 Miller Road, NE, Bainbridge Island, Washington 98110; (206) 842-3621; e-mail: moderncol@qwest.net.