There's little doubt that much of the growth some collision repair businesses have experienced over the past decade has been fueled by insurer direct repair programs (DRPs). After all, the percentage of insurance-paid work handled through DRPs quadrupled - to more than 30 percent - between 1996 and 2002. Most major insurers are already well over that 30 percent mark - with some at 70 percent or more.
A special online database consisting of motor vehicles and boats affected by Hurricanes Katrina and Rita is available for the public to search in an effort to protect consumers from fraudulent sellers, announced Robert M. Bryant, president and CEO of the National Insurance Crime Bureau (NICB).
A committee of the Collision Industry Conference (CIC) is taking a different approach to the long-standing battle between shops and insurers over "featheredge, prime and block" by defining where body work ends and paint work begins.
For the first time, the Insurance Institute for Highway Safety has tested the smallest vehicles sold in the US market, which gain popularity as fuel prices rise. Now these cars are rated for comparison of occupant protection in front, side, and rear crashes. The Nissan Versa earns good ratings in all three tests. Two other cars earn good ratings in front and side but not rear tests.
Crash test results indicate which vehicles in each weight category afford the best protection in real-world crashes, and this round of tests reveals big differences among the smallest cars. But results of real crashes show that any car that’s very small and light isn’t the best choice in terms of safety. Driver death rates in minicars are higher than in any other vehicle category. They’re more than double the death rates in mid-size and large cars.
CCC Information Services Group Inc. (Nasdaq: CCCG), a leading supplier of advanced software, communications systems, Internet and wireless-enabled technology solutions to the automotive claims and collision repair industries, has signed a definitive agreement to be acquired by an affiliate of Investcorp, the global investment group.
Acting on complaints from the California Autobody Association (CAA) regarding the need for explicit specifications for determining autobody labor rates, the California Department of Insurance (DOI) has become the first in the country to propose regulating how insurance companies conduct surverys to determine the prevailing labor rate.
Neither side in the case of Avery vs. State Farm is willing to cry uncle.
A rule that would prevent businesses emitting certain levels of toxins from locating near schools - Proposed Rule 1401.1 - failed to pass a vote by a quorum of the Governing Board during a hearing in early October. The South Coast Air Quality Management District (SCAQMD) tabled the rule until their meeting this month.
What do you get when you ask the industry to list what they see as the key issues they’d like to see addressed?
The leaders and participants of the Collision Industry Conference (CIC) conducted just that exercise in recent weeks, and ended up with a list of nearly 600 issues submitted by more than 150 representatives of the collision repair, insurance and related segments of the industry.
With the sluggish growth or even decline in sales many shops have experienced in recent years, the technician shortage and recruitment of employees have not been the troublesome issue they were for the industry during the late 1990s.
Concluding well over ten years' debate regarding aftermarket crash parts, the National Conference of Insurance Legislators (NCOIL) unanimously adopted a "Resolution Regarding Motor Vehicle Crash Parts" at its annual meeting in San Diego, California last month.
Keystone Automotive Industries, Inc. announced in early December that the company and other respondents intend to contest portions of a preliminary ruling issued December 4, 2006, by an administrative law judge of the United States International Trade Commission in a complaint initiated by Ford Global Technologies, LLC against the company, another distributor and certain manufacturers.
In a move that some insurers believe could prove detrimental to Louisiana consumers and insurers, the Louisiana legislature narrowly passed a bill that would require all vehicles determined to be "total" losses as a result of recent flooding to be crushed.
The Collision Repair Association of California (CRA) has appointed Richard Steffen as deputy director of legislative affairs. With 28 years of experience in state government behind him, Steffen is armed with a multi-level campaign to aid CRA in the fight for fairness among auto body professionals. The first order of business is to strike a working dialogue with the regulator, the insurance commissioner, the BAR, the attorney general and the insurance industry, Steffen said. He added that there are a number of fronts to adjust public policy.
Insurance Commissioner John Garamendi recommended a 15.3% decrease in the state's workers' compensation pure premium rates, his fourth consecutive decrease and an amount that brings his cumulative recommended cuts to 46.2 percent.
CCC Information Services Group Inc., a leading supplier of advanced software, communications systems, Internet and wireless-enabled technology solutions to the automotive claims and collision repair industries, has signed a definitive agreement to be acquired by an affiliate of Investcorp, the global investment group. Under the terms of the agreement, CCC stockholders will receive $26.50 in cash for each share of CCC common stock, representing a 10.3% premium over the average closing price of CCC's stock for the last 90 trading days. The fully diluted equity value of the transaction is approximately $495 million.
In spite of the fact that California passed SB 551, a statute that was designed to stop steering in the state, several autobody shop owners showed up to testify about their continuing problems with steering at the Senate Banking, Finance and Insurance Committee Oversight hearing on November 23.
The Administrative and Enforcement Monitor of the Bureau of Automotive Repair (BAR) has presented a draft of its first report on the performance of the BAR to the Department of Consumer Affairs and the California legislature.
Concerns about the estimating databases, the reversal of the decision in the State Farm non-OEM parts lawsuit, the collapse of another consolidator and an ongoing battle over the "right to repair" were among the most talked-about topics in the collision industry this past year.
The South Coast Air Quality Manage-ment District (AQMD), the Southland's air quality agency, has adopted stricter standards to significantly reduce smog-forming emissions from coatings used in nearly 1,800 auto body shops in the region. The standards will take effect in 2008.
There's a simple rule in business that if you want to increase profits, you need to either increase sales and revenue, or decrease costs and expenses.
State Farm is rolling out a new DRP program. The program calls for State Farm to get as good a rate as a shop charges any other insurance partner and asks for preferential treatment for State Farm insureds.
Award winning auto designer Chip Foose will be the featured luncheon speaker at the California Autobody Association (CAA) 1st quarter meeting on February 18, 2006, at the Disneyland Hotel in Anaheim. Foose is also the creator and host of the popular television series Overhaulin, airing on theTLC Network. In a relatively short career, Foose has created a legacy of designs and accomplishments beyond his years.
California Insurance Commissioner John Garamendi announced a $1 million fine against Farmers Insurance Group on January 23 following settlement negotiations over how the company handled consumer claims. According to a spokesman for Garamendi, the claims involved both homeowners and automobile policies.
Concerns about proposed new state and federal controls on the sale and use of automotive refinish paint products have kept environmental issues among the key topics being addressed by the Collision Industry Conference (CIC) in 2006.
Activity has been heating up around proposed Assembly Bill 303, known in the industry as the "Concierge" bill because it is backed by Progressive Insurance. Progressive has a repair program known as "Concierge" because of its drop off and delivery services.
Shop owners struggling to remain profitable say they are increasingly focusing on the paint side of the shop, looking for innovative ways to squeeze even more productivity out of paint booths, paint products and paint personnel.
In the three years since "event data recorders" (often referred to as "black boxes") in vehicles really began to arise as an issue of interest for collision repairers, there has been significant activity related to EDRs on a number of fronts:
Last month State Farm, the nation's largest auto insurer, announced that it was beginning the rollout of a new program for its preferred body shops. The contract for that new program was sent to body shops in the test markets of California, Illinois and Michigan. Predictably, the response was mixed, but the "vibe" was definitely negative. Shop owners who admitted that they depend upon State Farm business for a large percentage of their volume either said nothing or said they were taking a wait and see attitude.
Hurricane losses and loss adjustment expenses totaling $6.3 billion (after reinsurance) contributed to a reduction in State Farm's 2005 net income. The company is reporting an after-tax net income from all sources of $3.24 billion, down 39 percent from the $5.31 billion in net income for 2004.
California State Senator Jackie Speier (D-San Francisco) has introduced SB 1492, groundbreaking legislation that would make the Bureau of Automotive Repair (BAR) responsible for conducting an annual survey of body shop labor rates for the purpose of establishing prevailing rates in different parts of the state.
Battle lines are being drawn in California over Assembly Bill 1852, a measure that would have the effect of legally sanctioning certified aftermarket crash parts by declaring that, once certified, they are of like kind and quality to OEM. Such sanctioning would presumably cut off consumers from taking legal action against their insurers for mandating the use of aftermarket parts in collision repairs.
The California Autobody Association (CAA) will be holding its own Legislative Day this year on March 29 at the Capitol in Sacramento. All body shops are invited to attend a short update session and participate in scheduled meetings with their legislators. Further information will be available at www.calautobody.com.
Insurance Commissioner John Garamendi has issued a Cease and Desist (C&D) Order on The Global Healings Society of Puyallup, Washington, following an investigation by the California Department of Insurance (CDI) Investigation Division. The Order demands The Global Healings Society to cease and desist transacting any and all insurance business in California.
For the second year in a row, the White House budget request eliminates the federal investment in career and technical education authorized by the Carl D. Perkins Vocational and Technical Education Act. The Association for Career and Technical Education (ACTE) and the National Association of State Directors of Career Technical Education Consortium (NASDCTEc) expressed disappointment with President Bush's budget request and will work with the Congress and administration to seek restoration of Perkins funds during the appropriations process.
The Lazarus bill - AB 303 - appears to be making a miraculous recovery. Last month, the legislation was declared to be on life support, alive in committee as a technicality for "emergency purposes" only. Despite new statements to the contrary, there is still no written documentation regarding the renewed status of the legislation.
At first glance, it's hard to fathom what Eliyahu Goldratt, a 58-year-old Israel-born physicist, has to offer the collision industry. But more than 20 years after Goldratt authored (along with Jeff Cox) a "business novel" entitled "The Goal," his theory of process improvement is increasingly being discussed within many shop "20 groups" and implemented by a growing number of collision repair businesses.
Results are in for LKQ Corporation's (Nasdaq: LKQX) fourth quarter and year ended December 31, 2005, with revenue of $143.9 million for the quarter and $547.4 million for the year. Net income was $8.3 million for the quarter and $30.9 million for the year, representing growth over 2004 of approximately 64% and 50%, respectively.
The U.S. District Court, Northern District of Texas, has issued a long-awaited opinion on the Texas insurer-owned shop law. HB 1131 put a halt to insurer-owned shops in the state of Texas. Texas state Senator John Carona along with a strong grassroots effort on the part of collision repairers across the state assured the passage of the bill in June 2003.
Yohannes "John" Mesfine feels like he has been through hell and back - compliments of the California Department of Insurance (DOI) and the San Mateo County DA's office. Mesfine, owner of Mesfine Auto Body & Paint in Redwood City, California, was arrested in February 2005 and charged with insurance fraud in a sting operation run by the Department of Insurance.
The second shoe has finally dropped in the saga of AB 303 - legislation that would allow insurance programs like Progressive's "Concierge" to "step into the shoes of the insured." Amendments have been issued by the proponents of the bill to address the complaints made during the Senate Banking, Finance and Insurance Committee hearing last year.
California State Senator Jackie Speier (D-San Francisco) introduced last month SB 1492, groundbreaking legislation that would make the Bureau of Automotive Repair (BAR) responsible for conducting an annual survey of body shop labor rates for the purpose of establishing prevailing rates in different parts of the state.
The U.S. Supreme Court denied the petition of Michael E. Avery, et al in their suit against State Farm Mutual Automobile Insurance Co. After almost 10 years of dueling between Avery, et al and State Farm, the U.S. Supreme Court put an end to the national aftermarket parts class action lawsuit March 6.
The Occupational Safety and Health Administration (OSHA) has issued new standards to the existing standards that limit workplace exposure to hexavalent chromium. It has been determined by OSHA that the current level of hexavalent chromium that workers are exposed to puts workers at a significant health risk.
For anyone in this industry who started out hustling sales - whether that means collision repair jobs, cans of paint or tools and equipment - pulling back from a focus on growth in gross sales can be a challenge. Increasing the top line, after all, is often a key ingredient in increasing the bottom line. More sales equals more profit, right?
The hail storm that struck Central Texas on April 21 is expected to exceed $100 million in insured losses. Baseball-size hail pounded the city of San Marcos smashing vehicles at car dealerships and shopping malls.
Representatives from the vehicle manufacturers, steelmakers, vehicle dismantlers, vehicle shredders, environmental community, states and the U.S. Environmental Protection Agency (EPA) have reached agreement on a statement of principles detailing the elements of a national program for recovering mercury switches from scrap cars and light trucks before they are shredded for recycling. The parties are now working to complete a formal agreement.
Allstate has filed a Notice of Appeal with reference to the recent decision in Allstate Insurance Company, et al. v. Greg Abbott, et al. issued by the U.S. District Court for the Northern District of Texas, Dallas Division. The court held that specific provisions preventing insurer-owned shops from doing business in the state of Texas were constitutional.
"State Farm does not think it is reasonable to pay more for repairs than our competitors," stated George Avery, State Farm Claim Consultant, speaking to over 200 attendees at April's Collision Industry Conference in Portland, Oregon. Avery offered a 30-minute high-level overview of the changes the industry can expect from State Farm.
3i Group Plc and funds advised by Euroventures Management AB, incl. Sjätte AP-fonden, have entered into an agreement to sell all of the shares in Alignment Systems AB, parent of Car-O-Liner and Josam subsidiaries, to FSN Capital Limited Partnership II.