Monday, 06 July 2009 10:35

Amaradio --- Rogue Supervisors Should be Identified to Top Insurance Managers

Written by Lee Amaradio, Jr.

I had an experience last week with what I call a “rogue supervisor”—an insurance company supervisor who is ignoring company policy and allowing his emotions to supersede his better judgment. It’s like a military commander having his own private war with no regard to protocol.

I talk to many different shop owners across the country and it amazes me that we all have different opinions of the insurance companies that we as collision shop owners collectively deal with. I have insurers that I love to do business with that others shop owners hate. On the other hand, I hate many that the others love.
    Could it be that the same insurer would have different policies with different shops? This just wouldn’t make sense. If this were the case these insurance companies would need to create several different operating policies and no one would know what to do when. I know that insurance companies are smart enough to have a standard operation policy that is the same for all.
    If this is true than why do we have each company treating each shop or geographical area differently? Rogue supervisors are the reason. Supervisors that care more how their own numbers look than what is best for the insurance companies and the customers they represent.
    I think that the pressure to perform in the midst of heavy financial losses is making some insurer supervisors forego their better judgment. Add this to the fact that the department of insurance is not enforcing the current laws and we have anarchy within our industry. I know for a fact that when the insurer puts the policy holder’s satisfaction secondary they are treading on very dangerous ground. I want to believe that the majority of the major insurance companies would never allow the hard line approach that many claims offices are taking with their insureds.
    I spoke to a shop owner from Southern California who told me he advises his customers to by-pass claims and go directly to customer service. His advice to his customers was to explain to the customer service representative that they didn’t want to be transferred back to claims because they were unhappy with the way claims treated them. The results his customers received were satisfactory 100% of the time. This would support my theory that some claims offices are not adhering to company policy.
    In my shop, when a customer complains it gets my attention because I know that that unhappy customer will spread bad publicity whether the complaint is legitimate or not. If I am forced to eat a few bucks for the sake of my company’s reputation, so-be-it, because our reputation is what secures our future. Insurance companies must operate the same way. Why would they spend millions in advertising to gain customers only to lose them over a couple of bucks?
    I have seen long-time policy holders drop their insurance company after  a claim because they were forced to pay a small amount out of pocket for something that, according to state law, should have been paid anyway (like a reasonable labor rate). In most cases this is under $100. The news of their disappointment is not reaching the right people—likely because they are dealing with claims and not customer service.  
    I received a phone message at my shop from an insurance company supervisor (I’ll call him Mr. T.). I think that if the managers of this insurance company knew this was going on, things would change.
    I’ve done business with this company for years without any customer or company complaints. He told us that they will no longer pay our ‘exorbitant’ labor rates. I thought this was strange for several reasons. They had been paying our  “exorbitant”  rates all of last year. This year he was refusing to pay even last year’s rates.
    I will quote the phone message word for word below. I have it on a CD if anyone would like a copy (his boss is especially welcome to receive a copy). I believe I am dealing with a rogue supervisor because to leave a rude recorded message like this on my shop’s voice mail cannot be something that his company would approve of.
    Here’s the phone message word for word left for John, one of my managers:
    John, I received your fax, uh, I got your messages, um, the fact remains we have a labor rate survey on file. Nobody agreed... nobody gave you any agreement that we were going to pay you your exorbitant door rate. You guys don’t do any special work! You are not any better than anybody else! Our labor rate on file with the department of insurance affords us the ability to reasonably adjust any written repair estimate that you provide. As such we are sticking with $45 per hour and $32 for materials. We will not concede to your exorbitant rate period, end of story! If you’re going to charge it, you can collect from the claimant, end of story. Have a good day!    Hang up..
    Mr. T said that “nobody gave you any agreement that we were going to pay you your exorbitant door rate.
    First—I have file after file where this company paid me $48 per hour all of last year. Now they will only pay us $45! Does this sound like a reasonable adjustment? And no, we don’t have any agreement, but I do have agreements with other DRP’s that pay us $48 per hour. I wonder how that would look if we discounted this company lower than our DRP rate.
    Second—I have a copy of this company’s most recent survey and all of the data turned in is well over two years old. It was resubmitted in April of 09 with some data as old as three years. That’s not too reasonable to me—nor did this seem reasonable to the Department of Insurance.
    Third—Our agreements are always between the vehicle owner and the shop, as California law demands.
    Fourth—What is reasonable about this approach? He never asked one question about the repair process. He just denied the labor rate based on a bogus labor survey that according to some attorneys I’ve spoken with could be considered fraudulent because of the time the data was collected compared to when it was turned into the DOI. (Easy to prove intent to fix rates.)
    Why would this insurance company want to alienate a customer over $140 and have that customer file a complaint to the Department of Insurance (CDI). I’m not sure senior management understands what is going on.
    What really got me about this phone message is that I take offense to Mr. T saying we do not do any special work and are not better that anybody else. This part offends my life’s work, years and years of effort that means nothing to someone like Mr. T.  His statements prove that he knows very little about us and that there is nothing reasonable about his approach to adjusting estimates. Just for the record, I will tell you what separates us from every other shop on his survey.
●  Mercedes Benz USA Certified to include structure and aluminum repair (cost w/equipment $250K plus training $5K per tech) including an aluminum clean room.
● I-Car Gold Class Designation (training cost over $25K. Only 1 percent of the shops in the USA are Gold Class, much different than saying we have I-Car trained techs).
● Verifacts-member shop with excellent quality control rating (monthly fee)
● ALLDATA subscriber (monthly fee)
● BMW Factory trained and equipped (training is $5K per employee plus equipment).
● Toyota factory-trained and certified.
● Lexus factory-trained and certified.
● General Motors factory-trained and certified.
● Porsche factory Certification pending (training $7.5K plus equipment, fees paid.)
● ASE certified (on-site) full time mechanic.
    In addition, we sponsor training of over 1000 I-Car students per year by donating classroom facilities to help on going training within our industry
    My general manager Steve Saunders sits on the I-Car Gold and Platinum advisory board. Steve Saunders was also our local chamber of Commerce ambassador of the year.
● We were nominated Murrieta, California’s medium-size business of the year.
    We were the 2008 Collision Business of the year out of over 3,500 Assured Performance “Best in Class Shops” across the nation.
    We maintain a documented third party CSI score of 97.5% with a volume of over 6 million dollars per year.
    We are current members of CIC, ASA, CAA,and the CRA.
    Below is our equipment list that according to Mr. T makes  no difference.
● We have 42,000 sq. feet under roof.
● We have 5 Garmat down-draft heated paint booths.
● We have 2 complete overhead ProSpot inverter welders that cover the entire work area.
● We have a portable Tecna inverter welder that is brand specific for our Mercedes program.
● We have a complete aluminum clean room with all welders and specialty tools for aluminum repair. All of our techs are certified welders in aluminum and steel.
● We have a CarBench in-ground bench with the ability to jig all high end vehicles, a requirement for 2 of our OEM Certification programs.
● We have 5 Car-o-liners in the ground on lifts with Cartronics computer measuring system (these are approved by BMW with other OEM’s soon to follow).
● We have 4 Chief E-Z liner drives on frame racks with velocity computer measuring system.
● We have just invested in a MIG brazing welder as some OEM’s are now requiring.
● We have our own in house alignment rack and an ASE certified suspension technician.
● We have our own Enterprise satellite office with rental cars on site.
    I have invested millions of dollars in my shop between training and equipment. I will not go on about my own credentials but I can safely say I am an industry author and  spokesman and considered an expert in my field. You don’t need to look very far to see that I care about our industry and nothing just happened by accident, I didn’t just wake up one day and all was accomplished. No. It took a lot effort from a lot of great employees along with a well-thought out business plan over the last 30 years.  
    I am just trying to prove a point on how a “rogue supervisor” can create problems that otherwise could have been avoided.
    I think Mr. T is more than pushing the envelope of his company’s policy. Would a large insurer want their supervisor to leave a message that says we do nothing special and we are no better that anyone else? This just shows Mr. T’s ignorance because he hadn’t taken the time to be reasonable. Who do you think the policy holder thinks has the credibility? Was his approach in the best interest of his company. I don’t think so.
    This is exactly why we don’t have any consistency that bridges across claim centers. Until the insurers get their “rogue supervisors” under control and we see consistent guidelines, nothing will change. They need to quit rewarding the shops with the least amount invested and penalizing those shops that need to reasonably charge a couple of dollars more per hour because they have invested in the training and equipment to complete a proper repair (according to OEM requirements). Without standards we will never be able to find common ground and repair the animosity within our industry.
    Mr. T, As I have said before—if you treat me with respect, I will do the same for you. But when you shoot off your mouth when it’s obvious you know nothing about us, I take it personally and this is no longer a matter of $140, it has become a matter of principal.