Tuesday, 31 July 2007 17:00

DOI thwarts skewed labor rate surveys

In what the Collision Repair Association of California (CRA) calls “a major win for repairers, the Department of Insurance has put in writing conditions intended to prevent insurers from using skewed labor rates surveys to underpay the cost of collision repairs. Specifically, Gary Cohen, former DOI general counsel at the time, in a June 2007 letter to Gene Crozat, owner of G&C Autobody and president of CRA, held that an insurer survey, regardless of how it is conducted, “does not create the presumption that these surveys accurately reflect the prevailing rates charged by auto body repair shops in a specific geographic area.”


Cohen added the department would evaluate price disputes on a case-by-case basis with considerations given to evidence submitted by the repairer.

CRA’s executive director Allen Wood stated: “The department’s letter is a warning to insurers that their labor rate surveys will no longer be accepted as the weapon of choice in disputes over reasonable repair costs. The CRA has fought hard to put fairness in the labor rate survey process and we thank the department for issuing this letter.”