Saturday, 30 September 2006 10:00

CRA has an attack dog mentality

The newly-formed Collision Repair Association of California (CRA) has already achieved one major victory by directly challenging GEICO Insurance on their practice of paint and materials capping. CRA forced officials to enforce the law that makes it illegal to set an arbitrary limit like paint capping. With this decisive win behind them, CRA has proven that this will be an organization to contend with. 

Wednesday evening, September 20, 2006, at the Pasadena Sheraton Hotel, CRA held its first Southern California meeting. Less than a half-hour into the program, it was obvious this is no timid "Let's all talk about it" group. CRA could have stood for "Can Really Attack!"

Association founder and president Gene Crozat, owner of G&C Auto Body in Santa Rosa, told of his more than 500 small claims attacks and other lawsuits he's brought against insurance companies for failing to pay his billed labor rate, failing to pay for proper parts needed to complete a repair, or failing to pay the full ticket for materials used.

But not only did he take them to court; he won most of the time! He said the judge became so accustomed to his documented arguments, she often waived the preliminaries and went straight to judgement. In fact, it is now well known that in the Santa Rosa area, insurance companies pay the highest labor rate in the country - almost certainly because of the efforts of Gene Crozat.

Attack by BAR motivates Crozat

Crozat told the story about what happened before he got his attack act together. He was cited by the BAR for failing to accurately document the necessary details on a repair. This brought him into contact with Allen Wood, the BAR enforcement manager at the time. It also made him aware of how strong his position could be if he complied with every detail required by the law.

When Wood retired from the BAR, Crozat asked him to come to work for him, and he agreed. Now, with Wood as a watch-dog to make certain he was on solid ground with every court challenge to what he saw as unfair insurance company practices, the two of them were really ready to go on the offensive to bring about a fair and competitive collision repair marketplace.

Autobody News (December, 2005) described the meeting of several shop owners at a hearing of the Senate Banking, Finance and Insurance Committee held last fall under the auspices of Senator Jackie Speier. Shop owners questioned representatives of the Department of Insurance (DOI) about its seeming indifference to investigating complaints against insurance company procedures made by consumers. Griping about the DOI brought Crozat and other Bay area shop owners together in a way that no single issue had before. Area shop owners - who are competitive in business - put aside their differences to stand up for a level playing field for themselves and their customers.

A new association is formed

With Crozat as president, an association came together with other members of a governing board that includes: vice president of legislation Todd Bishop, owner, Dibbles Collision Center, Santa Rosa; vice president of membership Blake Andros, owner of four Blake's Auto Body facilities, Santa Rosa, Rohnert Park, San Rafael and Novato; secretary Byron Orris, owner, Byron's Autobody in Napa; and treasurer Roy Carnivale, owner, Anthony's Autocraft, San Rafael.


Association aims and purposes

At the Pasadena meeting, Wood said the association exists because they have become disturbed by a devaluation of the auto body repair industry, because they're tired of waiting for others to fix problems, and because they're very concerned with insurer tactics - making growing demands without compensation or recognition. He believes that current groups are either reluctant or unable to address the issues. Issues of interest include:

• Capping of paint materials

• Prevailing labor rates

• Steering

• Aftermarket parts

• Insurers' special programs

• Consumer education

• Improvement of the industry

• Attracting new technicians to the industry


Wood emphasized the many different entities affected by autobody industry issues. He said the new association plans to address insurers, regulatory entities, suppliers, legislators, and consumers.

They want to get regulatory entities to better understand industry issues and to fix existing laws and regulations to create a more level playing field. They hope to do this by first educating shops on ways to better comply with laws and regulations, and then to work with the Department of Insurance to compel enforcement of the provisions of the law intended to prevent unlawful conduct by insurers as well as the industry.

The association seeks to develop more fruitful relationships with legislators by providing training opportunities for both the legislators and their staffs so they can better understand industry issues. One way the association was able to get legislator support of the GEICO capping challenge was to emphasize the huge loss of sales tax revenue when paint materials are capped and not charged at the full amount required to paint a vehicle.

Wood noted that suppliers are also big losers when paint materials are capped and labor rates are kept at unfair and unreasonable levels. The association plans to seek assistance from those suppliers that share an interest in creating a fair and competitive marketplace. It wishes to safeguard shops' choices to do business with whatever vendors they choose.

Educating consumers

Another factor is teaching consumers that quality products lead to quality repairs. Wood says it is vital to educate consumers on the importance of being involved in the repair process and on their rights regarding repair of their vehicles. This can also include education on the issues with OEM parts and the safety implications of having improperly repaired vehicles. To accomplish this, the association expects to work closely with consumer groups.


How CRA will assist repair industry

With his extensive background as a BAR Enforcement Manager Wood was able to spell out specific details on how a shop owner can protect his or her interests. The association will provide assistance in filing complaints with the DOI, documenting unlawful practices, and assisting with Small Claims Court filings.

CRA will also provide detailed training on the application of laws like PC 550 and PC 550b, prohibiting false or misleading information in repair documentation, and B&P 9875.1 which requires a consumer to be advised of any use of non-original parts in the repair of his or her vehicle. The Association will assist a shop in filing complaints using Autobody Repair Shop Report Form 902, the Claims Service Bureau, Request for Assistance Form 301, and the Suspected Fraudulent Claim, Form FD-1.

Wood, along with Crozat, emphasized the importance of documenting insurance company abuses. If materials are capped, they say, don't adjust your invoice to match the demanded deduction; show the invoice as having a deficient payment. They say do the same with your labor rate if you don't have a DRP contract with a company agreeing to the lower rate. If you accumulate enough invoices showing the unpaid balances, and send copies to the "Collision Repair Association of California," the association now has documentation to go to court or to legislators and show illegal and unfair business practices.

Intended outcomes

Wood and Crozat summarized their overall intent for the new Association:

• Better informed consumers

• Legislation to require licensing of adjusters and estimators.

• Legislation to require posting of labor rates.

• A better trained industry.

• An industry able to compete for customers on level playing field.

• Shops able to take back their customers.

• Enforcement of current laws and regulations to curtail capping, steering, and payment of unreasonable labor rates.

• Ensure proper identification and usage of aftermarket parts.

• Ensure a shop's right to choose with whom to do business.

They stated emphatically that the association is not anti-insurance but wants a level playing field for the industry, allowing shops to compete openly for customers. This means that consumers should receive honest and competent repairs. Insurers should be allowed to reasonably adjust an estimate, but not cap, steer, or pay short.

If these objectives can be achieved, they say we will have a more robust industry, affording future growth with the paying of rates commensurate with costs. This will enable the industry to pay wages that will attract the next generation of well-trained technicians that the industry needs.

CRA is one group that intends to aggressively not only address, but also to resolve those issues critical to the survival of the autobody industry.