Midwestern News

1HomePageMap small mw 0816Local news stories affecting the auto body industry in Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin

A proposed bill in Minnesota, House File 2690 (HF 2690), seeks to amend Minnesota Statutes 2012, section 72B.092, subdivision 1 to include more stringent prohibitions against insurance company requirements placed upon repair facilities. Introduced by representatives Joe Atkins, Greg Davids, Joe Hoppe, Debra Hilstrom, Jim Davnie, and Melissa Hortman on March 3, 2014, HF 2690 changes two subsections of the existing law, including provisions the repair industry supported and were added into the law in 2007.

The first amendment adds a prohibition against insurance companies and their representatives from requiring that a vehicle be presented “… at a particular motor vehicle repair shop designated by the insurer” in addition to the existing ban against drive-in claim centers.

According to Judell Anderson, executive director of Alliance of Automotive Service Providers, Minnesota (AASP-MN), whose organization supports the bill, this amendment seeks to expand the existing prohibition on requiring that vehicle owners present their cars at a drive-in because insurers have adapted to the existing prohibition by requiring vehicle owners to take their vehicles to a specific repair facility for inspection.

“We’ve heard from our members that insurance companies now tell people to go to a specific repair facility to get their vehicle inspected,” said Anderson. “In many cases, the insurer will actually have staff onsite at the body shop one or two days a week, essentially running a drive-in claim center in the repair facility. This section is really about combating insurance company steering.”

The second amendment adds a section to the existing law that expands upon the types of requirements that insurance companies may not place upon repair facilities. The added section states that insurance company representatives shall not specify or require any motor vehicle repair shop to use specific vendors, distributors, manufacturers, suppliers, business platforms, or internal processes to carry out vehicle repairs for an insured or claimant. This expands upon another subsection that was added into the existing law in 2007 that says insurance company representative shall not specify the use of a particular vendor for the procurement of parts or other materials necessary for the satisfactory repair of the vehicle. This clause does not require the insurer to pay more than a reasonable market price for parts of like kind and quality in adjusting a claim

In October 2013, AASP-MN filed a formal complaint with the Minnesota Department of Commerce requesting administrative and/or legal action to prevent State Farm from requiring that collision repair shops that participate in the State Farm direct repair program use the PartsTrader parts procurement system based upon the existing section of the law.

According to Anderson, the addition of the new section should help address numerous concerns AASP-MN members have with increasing insurance company requirements for specific vendors and business processes beyond the existing law that prohibits that activity for parts and materials.

A multi-jurisdictional task force conducted raids in Wayne and Oakland counties on the morning of February 28, 2014, on suspicion of a theft and fraud ring involving automobiles.

The investigation reportedly stemmed from a stolen automobile that lead investigators to raid the Somerset Collision Shop in Detroit, MI, according to reports in the Detroit News.

“The raids were conducted with auto theft teams from Highland Park and Hazel Park in conjunction with the Action Auto Theft squad and a number of other assisting agencies,” said the Hamtramck Police Department in a press release.

“The raids were successful with multiple arrests and the recovery of stolen property. Somerset Collision in Detroit was the primary focus of the raids.”

This isn’t the first time Somerset has been raided by authorities, according to the Detroit News writer Tom Greenwood.

In March 2007, the office of the Michigan Attorney General announced the arrests of three individuals in connection with a Detroit-based organized crime operation that allegedly stole millions of dollars in insurance fraud.

The arrests came after authorities raided three Detroit-area body shops that were all owned by the same family. Among the body shops raided in 2007 were the Somerset Auto Body Shop in Detroit.

Other businesses owned by the family were Bojax Auto Collision, Dynamic Collision, the Collision Connection, Ultimate Collision, and Foreign and Domestic Collision.

According to the Attorney General, in 2007 the businesses were owned, operated, and managed by an Orchard Lake man and his mother and brother, both of whom lived in West Bloomfield, MI.

The defendants all received probation.

The Attorney General office was unable to confirm or deny that the same family still owned the Somerset Collision Shop or were involved in the recent raid.

Heritage Collision and Frame, a 30-year-old, family-owned collision and repair shop in Ypsilanti, MI, is expanding its operations into Scio Township, just beyond the Ann Arbor, MI, border. Heritage Collision and Frame—which originated in Garden City, MI, but has called Ypsilanti its home for the last 10 years—recently purchased a specially-zoned property at 6550 Jackson Road. The facility is located about a mile west of Zeeb Road. The 6,672-square-foot building had been on the market since November 2013, but, up until that time, it was occupied simultaneously by a trucking company and a paving company.

Grant Hatchard, the late owner of Grant’s Automotive, owned the building and operated out of the facility before his wife took ownership following his death in 2011. Charlie Koenn, the selling agent, said that the building was sold to Heritage for just less than its US$240,000 listing price, but it was a sought-after property because of its unique zoning. “It’s zoned for outside storage and auto repair, and there are plenty of businesses around that would like a building like that,” Koenn said.

Christmas came to Overture Center for the Arts in the form of much-needed body repair services donated by the Russ Darrow Group to the organization van. The Russ Darrow Collision Center, located at the Russ Darrow Kia of Madison dealership, 6525 Odana Road, Madison, WI, is responsible for repairing nearly US$4,500 worth of body work to the vehicle. The front and rear bumpers and sliding door were replaced, as well as other body work from normal wear and tear. The new sliding door is donated by LKQ Corporation-Keystone Automotive, and the paint is donated by Auto Paint and Supply. The labor and remaining costs are donated by the Russ Darrow Collision Center. The van was detailed and completed on Friday, December 20, 2013. “We are incredibly grateful to the Russ Darrow Group and their partners for this incredible gift,” says Overture spokesman, Robert Chappell. “The Russ Darrow Group investment in us, like every donation we receive, really demonstrates their commitment to the success of the community as a whole.” Russ Darrow Group is headquartered in Menomonee Falls, WI.

Belron is closing the Glass Medic distribution center in Columbus, OH. The company will now serve the Belron business units exclusively, including Safelite, according to Melina Metzger, public relations manager for Safelite. “After a thorough business review, the Glass Medic parent company, Belron Technical, determined its core purpose is to serve the Belron business units exclusively. Therefore, Glass Medic has ceased sales of all products and its Columbus, OH, distribution center will close,” says Metzger.

The slippery driving conditions that have plagued drivers this winter are creating more business than usual for body shops in the Twin Cities, MN. Collisions on icy pavements are pushing cars into each other—and into car repair businesses. Some reports have drivers waiting as long as six to eight weeks to repair damage from recent crashes; however, body shops tell local news that the wait should not be that long. “Right now, I would say we could get it in within the next week, although we are still booking,” said Chris Thorston, owner of Minnetonka Collision. “I see a lot of shops are a week and a half, two weeks out.”

“It is a little heavier than normal, but we are poised to handle the excessive work load,” said Gary House, ABRA Auto Repairs of Plymouth, MN.

Repair shops say most of the damage has been front- and rear-end collisions in February 2014, with the icy spin outs adding some total body repairs.” Most repairs that I am seeing average five days,” said Thorston. “There are still some bigger ones that are obviously taking two to three weeks to do the repair.”