The California Autobody Association (CAA), which had been "patiently waiting this year," according to Executive Director David McClune, to see if Texas would be successful in passing legislation prohibiting insurers from owning collision repair shops, now says it may be ready to try again.
Aftermarket parts manufacturers and CAPA are likely vexed by the newly-released Crash Parts Certification Study, published in July by the California Bureau of Automotive Repair (BAR). The report blasts the parts certification process, concluding that "certification has no value to the customer . . . if there are problems with the certified product the certifying entity does not stand behind their own certification process."
California's anti-steering legislation, SB 551, took a major step forward on July 9 when an amended version passed the Assembly Insurance Committee by unanimous vote and then moved to the assembly floor. Bill sponsor Sen. Jackie Speier (D-San Francisco) plans to move forward after she and supporters of the bill - the California Autobody Association (CAA) and the State Department of Insurance - can work out clarifying language. The bill passed the State Senate in early June.
Contending that they need to comply with restrictions placed on them by Texas House Bill 1131, Allstate Insurance Company is introducing a new direct repair program in the state of Texas. The new law, which was passed on June 20, requires Allstate to change its existing relationships with auto body repair shops and provide uniformity between its owned (Sterling Collision Centers) and non-owned auto body repair operations.
Now that SB 551 has been signed into law, it is the responsibility of collision repair shop owners to become familiar with its provisions and implications. Kelly Swenson, first vice president and president-elect of the California Autobody Association (CAA), spoke passionately at the CAA Annual Convention in October about the victory achieved for the collision repair industry by the passage of SB 551. Swenson suggested that all shop owners post the law in their facilities and indicated that training on the law and its implications would be offered early in 2004. The law goes into effect January 1, 2004. Enforcement falls to the Department of Insurance.
There's good news for Oklahoma body shop owners who want to take immediate action to stop the steering they believe is rampant throughout their state. A grassroots group of shop owners has started an effort to get anti-steering legislation put on the books. Representative Bill Paulk (D-District #92) agreed in late October to sponsoAutobody News - Administration [Joomla]r the bill when the legislature meets again in the spring of 2004.
Is the onset of fall and impending winter making your blood run cold? It's not too late to pack your bags and head for Florida to attend NACE 2003 - the global collision repair event that draws all segments of the industry together. It's a great source for new products, education and networking - and, of course, a little Florida sunshine.
The Certified Automotive Parts Association (CAPA) is calling on repairers to leave the CAPA seal on all certified parts in order to demonstrate the use of a CAPA part and to aid in tracking the part, should it be necessary.
Once the fog burned off, the San Diego day was almost too beautiful to stay inside, but that's exactly where nearly 100 attendees at the California Autobody Association (CAA) Convention spent that temperate mid-October Saturday.
When HB 1131 was signed into law in Texas, it required that companies with an ownership interest in auto body repair facilities provide for equal referral of work to their owned and non-owned facilities within DRP programs. In order to be compliant with the new law, Allstate was forced to evaluate the make up of the current DRP program, which included owned and non-owned facilities. And the program was redesigned to help ensure that Allstate is complying with the new law.
From a crack-down on fraud to attempts to halt the growth of insurer-owned shops, it's been an interesting year for the collision repair industry. Here is our annual year-in-review wrap-up, a collection of some of the most memorable, important, interesting or enlightening quotes heard around the industry during 2003.
Insurance Commissioner John Garamendi, responding to the workers' compensation crisis dampening California's economy, announced he has significantly lowered the advisory pure premium rate by 14.9%, effectively returning it to the July 2002 level.
The Texas law passed earlier this year that puts a halt on the growth of insurer-owned shops is nine pages long.
Michael Spears is serious about his business. He is results-oriented and motivated by the challenges representing the collision repair industry. Spears is part owner and general manager of Green Valley Collision Center, a brand new 30,000 sq. ft. auto body shop in Las Vegas, Nevada. Green Valley is a member of The Auto Body Group, along with Falconi's Collision Center and Speedway Truck and R/V Center. In addition, ground is to be broken on another 38,000 sq.ft. collision repair center in spring 2004.
The issue of shops needing multiple estimating systems to meet insurer direct repair program requirements may not be resolved soon, according to panelists at a NACE Town Hall meeting that focused on automated claims processing.
At the last International Autobody Congress and Exposition (NACE) expected to be held anywhere other than Las Vegas, attendees had an opportunity in early December to enjoy a welcome party at Universal CityWalk in Orlando, Florida, participate in 45 educational sessions, hear a keynote address from news commentator Bill O'Reilly, and browse a 176,000-sq.-ft. trade show featuring 488 companies.
Attorney General Bill Lockyer filed a $50 million lawsuit against Irvine-based Caliber Collision Centers and its subsidiaries on December 4, 2003 alleging they committed widespread fraud by billing consumers for services and parts that were not provided.
Nine owners or employees of area auto repair shops were arrested and charged December 17, 2003 with auto insurance fraud following a lengthy investigation by a multi-agency task force headed by the Los Angeles County District Attorney's Bureau of Investigation, LA District Attorney Steve Cooley announced. Two others were charged but were not yet in custody.
Allstate has won a round in its fight to own collision centers in Texas. In the U.S. District Court of North Texas, Dallas County, Judge Ed Kinkeade granted a motion for a preliminary injunction against enforcement of H.B. 1131 as requested by the plaintiffs in Allstate Insurance Co. and Sterling Collision Centers Inc. v. Greg Abbott, Attorney General of Texas and Carol Keton Strayhorn, Texas Comptroller of Public Accounts ("defendants").
From "unintentional fraud" to "estimating database abuse" and the added costs created by the lack of standardization among direct repair programs, the Collision Industry Conference (CIC) plans to address a wide range of topics in 2004.
Joey Buttafuoco, co-owner of California Collision, a Chatsworth auto body shop, pleaded guilty to one count of auto insurance fraud and has been sentenced to one year in county jail and five years probation, the District Attorney's Office announced.
State Insurance Commissioner John Garamendi announced the arrests of nine suspects today by the California Urban Auto Fraud Task Force for embezzlement, conspiracy and tax evasion in connection with an "insider" insurance scam. Investigators from the California Department of Insurance Fraud Division, the California Highway Patrol and the Sacramento County District Attorney's office made the arrests in Oakland, Richmond, Vallejo, Fairfield, Norwalk, California and Raleigh, North Carolina. Each suspect could face a maximum of five years in state prison and/or fines up to $50,000.
Louisiana Attorney General Charles C. Foti, Jr. announced a guilty plea in an insurance scam that cost insurance companies and consumers hundreds of thousands of dollars. Foti said the case is even being watched nationally as other states may follow Louisiana's precedent of prosecuting windshield repair scams.
The recently completed Space Draw for the International Autobody Congress & Exposition (NACE) 2004 event in Las Vegas showed an increase over 2003 in the number of participating companies and the amount of space assigned, indicating a strong start to NACE being held during Automotive Aftermarket Industry Week (AAIW) in November.
In a ruling that bucks the national norm, The New Mexico Supreme Court ruled last month that consumers could sue insurance companies for failure to negotiate reasonably once liability has been established in an automobile accident. It's called "third party bad faith" and it gives a motorist the right to sue the other party's insurance company when that other party is at fault and his insurer makes an unreasonable or "low ball" offer to settle the case.
In the marathon of Arizona politics, the baton has been passed from the Fairness for Automotive Consumers (FAC) legislative committee members - David Fait, Brad Beebe, Randy Maddox, and Cindy Beckes - to State Representative Gary Pierce (R), and lobbyists Barry Aarons and Art Chapa.
California Department of Consumer Affairs (DCA) Director Charlene Zettel has presented her department's report on the Bureau of Automotive Repair (BAR) to the 2004 Sunset Review Committee with three recommendations for improving the BAR. The recommendations include consideration of a statutory definition of "fraud," a term that has been hotly contested in the collision repair industry over the past year.
Two of the remaining four defendants in the national class action lawsuit that alleges price- fixing in the automotive refinish industry have settled for a total of $48 million while still denying the allegations in the lawsuit. In the late April settlement, Dupont agreed to pay $36 million and BASF $12 million to settle dozens of suits filed all over the country that were consolidated into Federal District Court in Philadelphia. A third defendant, Akzo Nobel, settled its share of the suit for $18.75 million in February 2003 while denying all liability. PPG and Sherwin Williams remain as defendants as the federal civil case moves forward in Philadelphia.
The 2004 International Autobody Congress & Exposition (NACE) registration fee will include a badge that will admit attendees to the NACE Exposition, as well as Automotive Aftermarket Industry Week (AAIW) shows - SEMA and AAPEX. NACE will also provide a complimentary shuttle that will run between NACE and AAIW shows. Both arrangements are designed to increase the value and add convenience to attending this year's NACE, being held November 3-6 in Las Vegas during AAIW.
Optimism was in the air at the Arizona Collision Craftsmen's Association (ACCA) May meeting as they celebrated the signing of HB 2468 into law by Arizona Governor Janet Napolitano.
Texas Attorney General Greg Abbott's final settlement in April with two auto insurers will result in estimated refunds of more than $700,000 to Texas policyholders who paid more on their claims for auto repairs than their policies required.
The Motor Vehicle Owners' Right to Repair Act, H.R. 2735, has reached a landmark number of 106 co-sponsors in the U.S. House of Representatives, according to the Coalition for Auto Repair Equality (CARE). The Right to Repair Act was introduced in the House July 15, 2003, by Representatives. Joe Barton (R-TX) and Edolphus Towns (D-NY) and in the U.S. Senate on February 26, 2004, by Sen. Lindsey Graham, (R-SC). The Senate bill, S. 2138, has 10 co-sponsors in the Senate.
A California state court lawsuit for alleged price-fixing by paint companies in the automotive refinishing market has taken a big step forward. Superior Court Judge Ronald Sabraw on June 17 granted a motion certifying the case as a class action. The step is important because individual named plaintiffs, namely small body shops, would have been unable to prosecute an expensive price-fixing case against large corporate defendants such as DuPont and PPG.
U.S. Secretary of Labor Elaine L. Chao announced in April the final regulations governing overtime eligibility for "white-collar" workers under the Fair Labor Standards Act. The regulations had not been substantially updated for over 50 years, creating confusion for workers and employers, generating wasteful class action litigation, and failing to effectively protect workers' pay rights, according to the Department of Labor.
The Joint Sunset Review Committee and the Department of Consumer Affairs (DCA) has issued recommendations to the California Bureau of Automotive Repair (BAR). These recommendations are similar to those submitted to the Sunset Review Committee by the DCA Director Charlene Zettel in early June, with one notable exception and two additional recommendations (see June ABN).
In May Arizona Governor Janet Napolitano signed into law House Bill 2468. HB 2468 includes anti-steering provisions that protect consumer choice and place limitations on the claims adjuster making repair decisions, thereby protecting the competitive market. The bill has mandatory reporting requirements with stiff penalties for violations of the bill.
Insurance Commissioner John Garamendi has announced that received workers' compensation rate filings illustrate a downward trend, but still fall short of his pure premium rate advisory of -20.9 percent issued on May 28, 2004.
When the The International Autobody Congress & Exposition (NACE) 2004 Educational Conference opens on November 3 in Las Vegas, it will have two new tracks - Sales & Marketing and Estimating, as well as an increased number of focused sessions for dealers, jobbers and claims professionals. New 45-minute "crash course" sessions in several of these tracks should prove popular with many attendees who don't want to commit several hours to a topic.
The auto body shop in Fort Worth, Texas took in the repair just like any other day. The customer signed the repair order for a damaged 1997 GMC pickup truck, got in the rental car, then drove that rental car off to rob the Frost Bank! Not quite the usual scenario.
The nation's largest auto insurer has no plans to join the other insurers setting performance benchmarks for shops participating in its direct repair program - but it may do more to help those 20,000 shops understand how their performance stacks up.
NACE show management is reporting that the number of companies scheduled to exhibit in the 2004 International Autobody Congress & Exposition (NACE) is up 23 percent over last year, and the size of the Exposition has already exceeded last year's event by 11,600 square feet.
For $5.8 million, Caliber Collision Centers (Caliber) has resolved a consumer fraud lawsuit filed in California and agreed to disciplinary actions initiated by the state Department of Consumer Affairs (DCA) that alleged Caliber billed customers for parts and services that were not provided.
Automotive Service Association (ASA) leaders met with U.S. Rep. Chris John, D-La., to discuss the Agreement between the automakers and ASA providing service information to independent repairers. The ASA executive committee briefed Rep. John on the progress of the Agreement.
Now that the anti-steering bill HB 2468 has passed in Arizona, what is the next step for the Arizona Collision Craftsmen's Association (ACCA)? (Autobody News, July 2004) The bill, sponsored by Fairness for Automotive Consumers (FAC), includes anti-steering provisions that protect con-sumer choice, place limitations on the claims adjuster making repair decisions thereby protecting the competitive market, and has mandatory reporting requirements with stiff penalties for violations of the bill.
Texas Attorney General Greg Abbott has filed court-approved settlements with two auto insurers to refund more than $3.4 million to Texas policyholders who paid more out of pocket on claims for auto repairs in certain years than their policies required.
California authorities arrested 38 people for alleged auto insurance fraud at more than 30 auto body shops in the Sothern California cities of Riverside and San Bernardino Counties. If convicted, each suspect faces up to five years in state prison and a maximum fine of $50,000.
Governor Arnold Schwarzenegger announced his support for Proposition 64, a November ballot measure whose supporters claim would stop "shakedown lawsuits."
California independent body shop owners got a boost on September 29 when Governor Arnold Schwarzenegger signed a bill that amends the automotive repair laws (Business & Professions Code Sec. 9880) to more strictly define who the customer is when a vehicle is being repaired, making it clear that an insurance company paying to repair a car is not the customer and cannot take the place of the customer.
Farmers Insurance Exchange has begun serving civil summons and complaints upon a Los Angeles body shop and its director, accusing them of taking part in a scheme designed to defraud Farmers and its policyholders. The civil complaint, which is similar to prior suits filed against shops, seeks damages for the fraud committed.
Standing at the corner of 8th Street and Kingsley Drive in Koreatown in Los Angeles, Insurance Commissioner John Garamendi announced several arrests in a large "paper collision" insurance fraud ring. He also asked the community to assist in locating three members who remain at large.
Oil, antifreeze and paint. An auto body repair facility can create more than 200 gallons of potentially hazardous waste each year. Where do these by-products of the body shop business go?
Warning drivers that anyone can become a victim of insurance fraud, Insurance Commissioner John Garamendi and the California Highway Patrol (CHP) announced the bust of an alleged auto insurance fraud ring that cost insurers - and ultimately policyholders - at least $1.5 million in the past year alone.
The International Autobody Congress and Exposition (NACE) may have been the main draw that attracted more than 30,000 participants in the collision industry to Las Vegas in November, but there was no shortage of other meetings and events to also occupy their time while they were there.