Tuesday, 30 April 2002 10:00

So, that is what you really think?

Written by Dick Strom

I believe the following quotes, all drawn from notes sent to me regarding articles I've written, are indicative of deep-seated convictions held by a growing number of collision repairers. Many repairers, especially DRP shops, are fearful of retribution by their insurance customers and won't speak their minds publicly (but they'll write to me). Here then, are their thoughts from my correspondence and other sources as noted. 

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"Ask the insurance adjuster who hands you a deficient estimate, 'Do you really want me to fix this car the way you wrote your estimate?'" (bodyman turned adjuster.)

"At 63, I own a profitable collision business. I dismiss most of what insurers say because few if any of them have run a profitable business of their own."

"No problem. Here's my landlord's number. Whatever you can negotiate off what I owe him for rent I'll deduct from what you owe me for vehicle storage."

"The insurer's initial estimate of $592 missed that the door was warped and the pillar crushed. His re-inspection upped it to $2000 (still 25% short). It was all visible damage to any but the visually impaired."

"Do you think I can give you the name of anyone in the insurance industry with common sense?" (a state D.O.I. Deputy Commissioner to a shop's request for the name and number of someone with some common sense in that particular insurance company.)

"My neighbor, a physician, works from 5AM to 7PM each day. He explained that because 'managed care' killed his industry he has to work many extra hours to maintain his lifestyle. Managed care will do the same to the collision industry, and it will happen. DRPs are still on a 'honeymoon' but the next 5 years should be very interesting as the 'control freak' insurance industry tries to extend their control as in medical insurance."

"We'd like to share something we've learned over the years: Insurers don't owe collision repairers anything. Insurers, who have contracted with insureds, are short-sheeting innocent consumers who have paid money in good faith to be made whole in the event of a loss. Also, legislators and consumers don't care about small business, or its profits or lack thereof. They care only about how small business treats them."

"I just read your article in which you listed Black's Law Dictionary definitions. Violations of at least 10 of these definitions are daily practiced in the DRP world. Yesterday my job was put in jeopardy by an insurer because I'm not supposed to say anything unflattering to my customer about this insurer… nor am I supposed to coach my customer through the repair process. Since I've been unsuccessful in obtaining legal representation, I'll soon be part of the attrition rate leaving this industry I love."

"One major issue of 'controlling' an entire market place through a handful of DRP shops is that a few DRP shops contract 'discounted' labor rates in exchange for 'volumes' of work. In reality these DRP shops write whatever labor hours they want or need to make up the monetary difference for DRP concessions. Then ALL the other shops in that market area are forced to work for the same discounted labor rates and concessions, and all the steering necessary to send the volumes of work necessary to the DRP shops, thus controlling all the other shops in that market area."

"I wonder what our insurance agent would say if we filed a personal claim for 'desk rage' and requested Workmans' Compensation for leave of absence? Of course, if we did, who would be in our front office to request the supplements, take the calls, or order the additional parts insurance adjusters conveniently leave off their estimates? Point is, we are worth something even though we are made to feel worthless."

"When we don't receive payment on supplements within 30 days, we send the insurer a new bill for the original amount plus 2 hours administrative re-processing of the delinquent bill. Usually, a check for the 'original' amount arrives within a week."

"I wonder if insurer adjusters would write more accurate sheets, and how much of our 'free work' would cease, if more shops would charge the insurer for admin services? It's obvious that they'll continue accepting our 'free help' as long as we offer it."

"I appreciate your honesty." (insurer adjuster comment when I paid back his company nearly $500 for an overpay we caught on a sheet they wrote [11 hours instead of one hour]. My reply: "All we expect is to be paid in full for all things we do.")

"I always object when an insurance estimate has a rubber stamp on it warning shops that 'fraud is a criminal act.' I recently told one insurer that I don't commit fraud, but that their estimates are replete with fraud. They didn't like my frankness, but I got paid 100% of the supplement. My theory: "You don't have to like me, just pay me fairly."

"Consolidators really don't care because they aren't driven by an interest in this industry…They're looking only at the potential value of their stock when they go the IPO route…THAT'S ALL THAT MATTERS TO THEM. They'll churn the numbers to meet the ratios their investors cherish. Most consolidators, backed by venture capital, profit by prostituting the repair industry, because they REALLY don't give a *&^% about 'right.'"

"Every DRP-insurer needs at least one good 'partner' shop in a specific area to which they can send their 'problems' (tough customers, tough repairs). Since insurers seldom re-inspect, the shop can play the game by listing aftermarket and charging $1 less than OEM, or cost-shift 4-5 hours to non-existent 'inner damage,' and still do quality work. The 'average' DRP repair costs more than the 'average' non-DRP repair, but through DRPs insurers control rates, prevailing practices, and speed of repair."


"What right has an insurer to complain about crash-program time allowances when they don't fix vehicles? If ADP, CCC, and Mitchell were worth their salt, they'd discount lowering time-allotment suggestions from insurers, rather giving the disputed issue a 'time study' performed at a shop with a reputation for quality… THE FINAL PRODUCT, AFTER THE TIME STUDY, RE-EVALUATED TO CONFIRM IT WAS DONE CORRECTLY. All 'time studies' that fail to measure QUALITY are 'bogus.'"

"The insurance industry spends a lot of money talking about fraud. If the parts they are specifying are clearly not Like Kind and Quality (LKQ), insurers are just as guilty of committing fraud as the collision shop that knowingly installs imitation but bills for OEM. Using vague descriptions like 'functionally equivalent' to characterize inferior replacement crash parts is deceptive, and has contributed to the hostility exhibited toward CAPA parts by collision repairers." (from Auto Body Repair News article.)

"As these consolidators begin to take over the collision repair industry they will soon face a dilemma - the insurance industry will begin to pit consolidators against each other for cheaper repairs and more discounts in exchange for more work volume." (sage perspective of Sal G. Donzella, with many decades of experience dealing with insurers.)

"I know insurer head offices are throwing away my first authorization to pay a supplement. I personally take all 'authorizations to pay' to the post office: Then the insurer says, 'We never received them!'" (former-shop-owner-turned-insurer-adjuster when we asked him to follow up on supps. he'd authorized payment, yet not paid.)

"Do you have a problem with 'gratuitous blending?'" (insurer rep's [laughing] comment to me over a line another rep included in his estimate.)

"I'm embarrassed to say I'm a 'DRW,' a 'direct repair wh--e' for 4 insurers… but I hate it!"

"We're a fraud-free repair facility, which has exposed many fraudulent repairs by other shops during post-repair Diminished Value re-inspections. Never have I known insurers to aggressively pursue the original repairer in an effort to stop the fraud!"

"Do you realize that when you're a DRP, the insurer is using you as a shield? You won't be able to raise your rates, and I won't know how to defend you against a customer because you and the insurer are one." ( a shop's lawyer's advice that convinced the shop owner to get off the DRP-train and focus on marketing to build his business.)

"So many paint times are 'odd' numbers because of insurer input to crash program providers. One of their little tricks is calling it 1.9 or 2.3 time units, 50% of which rounds down to .9 or 1.1 time units…smaller times = smaller material allotments."

"When I asked why they called this insurance adjuster 'Three-tenths', he said that his taking off 3/10 hour on every shop line item saved his insurer enough money over the year to pay for all his wages, expenses and vacation - he was a free ride for them!")

"I was trained not to open anything to look for damage, and was not to include anything on an estimate that I couldn't see, even if I knew there was damage. As a result of (this insurer's) estimating procedures, their estimates are always underwritten and are never complete. It was (this insurer's) practice not to include certain repair procedures (rustproofing, blending, colorsand and buff, and wheel alignment) in estimates." (court testimony of estimator with 30 years with this large insurer.) [CRASH Network.]

"When filing a complaint against an insurer with our insurance commissioner we always 'cc' our local Senator and Representative as well as others interested or somehow connected to our request for assistance. This has been our biggest 'plus' as many of these officials will write the DOI advising that they have received our letter and ask to be notified of the department's actions/response. Our state Insurance Department keeps track of the number of complaints filed yearly, and if the numbers decrease they ASSUME all is good… your complaints are needed even though the responses you are probably receiving are discouraging." (Internet post on effective complaint letters.)

"Few states' insurance departments give a *&^% about the collision repair industry. The job of a state insurance dept. is to make sure insurance companies stay solvent so they can pay their policyholders. In most states, insurance departments make it clear that they have no jurisdiction over repairers; therefore, they don't want to hear from them. Complaints must be made through the policyholder." (CRASH Network.)

"It's strange to me that our so-called industry leaders fall into the trap you write about: It's like giving the enemy your ambush plan and then wondering why you don't win. In California we've stayed neutral on DRPs because half the members and officers are participants in them; afraid they'll lose half the membership if they take a stand against DRPs." (a former Marine with 2 tours of duty in the bush in Viet Nam.)

"Our local (large insurer) inspector (who still does some collision work in his garage) at his insurer's company meeting voiced his arguments against 'blend within panel'. Two of my former techs, (one, my best painter ever and a staunch complainer against 'blend within panel' when he worked for me), now estimators for this insurer, just sat there saying nothing. When the inspector asked their professional opinion, they were too scared to death to utter a word for fear of Big Brother. It's a terrible thing when this honest inspector now has to say, 'I think we can justify 5 hours to repair that quarter instead of the 3.5 hours you listed.' Cost-shifting!"

"The only reason insurers re-inspect my work is that they're praying they'll find something I charged for but didn't do."

"I see a lot of shop owners/managers spend incredible hours at work. Are they dedicated and determined, or desperate and lacking in business skills? I can relate: I was the same way when I was in the collision repair business, pulling my share of all-nighters. That's one of the primary reasons I'm not in collision repair anymore. When I weighed it out, my family won. It wasn't worth sacrificing my family for my business."

Dick Strom, Bainbridge Island, WA, moderncol@aol.com