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Tuesday, 05 May 2009 07:11

Amaradio --- Our Own Worst Enemy, but is Help on the Way?

Written by Lee Amaradio

Last week I attended a meeting in San Francisco at the California Department of Insurance. This was a meeting I had looked forward to for quite some time. As the CRA’s president I was privileged to accompany some top shop owners as we made our case before the department heads. It’s too soon to know how successful the DOI will be with the evidence that they will be investigating but we did accomplish what we set out to do, and that is to establish the fact that there is a real problem and we need help.

    One of the things we agreed upon was that the collision industry is its own worst enemy, and because our standards are all over the board it is a difficult thing to regulate. We are not consistent in any aspect of the repair process in regards to both how we fix the cars and how we charge for those repairs.
    Every shop has a different opinion on how the vehicle should be repaired and what should be charged for, and what they choose to give away. At least the insurers are all in agreement on their business plan and that is to get the repairs done as reasonably (cheap) as possible. This is their primary goal and they stay focused on constantly trying to get it done a little cheaper.   
    On the other hand, many shops have been fighting for labor rate increases only to find others willing to work cheaper than ever. They are using the economy as an excuse to “butch” cars back together and save deductibles, all in the name of staying in business.
    If those shops would get their heads out of the sand and realize that their plans will come to a bitter end because they are only prolonging the inevitable. Soon there will only be a handful of shops qualified enough to repair the vehicles being built today. We are already to this point, do people need to die before these so called body shops and insurers realize that safety is becoming a real issue?
    What do you think will happen to our industry when a law is passed by some consumer group that will require all vehicles to be repaired by a qualified facility according to factory specifications? If we were a hospital we would be killing 50% of our patients and all it will take is for a third-party action to set a precedent and the attorneys will be all over any shop that tries to wing it.
    Here’s the bottom line. You can work as cheap as you want to, and if you can survive in this industry more power to you. “Good for you” if you can make it. But you must fix the cars the correct way, and many shops have no idea what that means. So if  and  when you start repairing the vehicle the way the manufacturer requires, it becomes evident that you must spend some money on training and  equipment and then the cost of the repair goes up.
    There is nothing in this world that says you can’t cut corners to save a little money but shops have crossed over a line that will ultimately cost them their businesses. They have stepped over the safety line—a line that should never be breached—and when you do it you have no excuse. How will you tell someone that their loved one is no longer with them because you were trying to save the insurance company some money?
    If we expect help from the Department of Insurance we must first help ourselves, by policing our own industry. I recently received an e-mail from a person named Raquel. She asked why our industry does nothing to police ourselves? She also asked me why no one ever writes about the numerous under-equipped and illegal body shops and why we do nothing to expose them. She has a valid point. If the DOI says we are our own worst enemy maybe it’s time we looked at a different approach to changing things within our industry.
    It’s time we start to expose faulty substandard repairs and identify any shop that continues to remain “Old School” in repairing today’s modern highly sophisticated vehicles. We are already an industry divided and it seems that the insurance companies always gravitate to the bottom feeders so  the only way for things to change is for us to quit sabotaging ourselves by having standards that are all over the road and start exposing the shops that continue to undermine what we are trying to do, which is fix the cars the correct way and to get paid for doing so. The present system penalizes the  qualified repairers and rewards the  shops with the lowest standards for repairing today’s vehicles.  
     We see body shops closing their doors because there is no bail out for us, so if we so desperately need a raise why would we lower our prices? Are we feeling guilty for running our businesses in the black? Will the insurers be better off with no qualified shops? Who will fix the cars that require special equipment and training? At some  point things will return to normal and all of  low balling  shops will be gone, because you will not be able to repair the cars, and the reason will be because you will not know how.
    With the economy we’re in, I see some insurers acting like they are broke and it is up to us to fix their problem. Remember, insurers had the best year in property and casualty that they have had in 80 years, but they lost more than they have ever had because of bad investing. They are still here (they still have the money) and are acting like it’s up to us to bring their profits back up. I have heard more than once; don’t even think of asking for any labor rate increases this year. I need to raise my door rate to 50 dollars per hour at the beginning of the year, which is a severely discounted door rate as it stands. How can I afford to give more discounts because some shop that is on its way out of business is working cheaper?
    My advice to all of the shops out there is to continue to charge to repair the cars correctly, and if you don’t know what that means, it’s time that you find out.
    Don’t be afraid to expose those shops that are not willing nor able to step up. If I was a doctor and half of my patients were dying, it would be a good time to step down.
    Insurers have some valid points when they say, “Why I should pay you when no one else is charging for that?”
    I’m not saying that they are right but I am saying that they have a valid point that is hard to defend against because we are our own worst enemy.     
    See coverage of meeting at autobodynews.com