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Wednesday, 08 September 2021 16:37

Consultant Says CA Auto Body Shops Need to Know the Laws that Affect Them

Written by
Juan Martinez leverages two decades in the collision repair industry to help auto body shops as a consultant through JM Business Solutions, Inc. Juan Martinez leverages two decades in the collision repair industry to help auto body shops as a consultant through JM Business Solutions, Inc.

Index

...looking for other venues, usually from dealerships or fleet work, for example. If you are a new shop and you don’t have a book of business, a DRP might be good for the short-term, but it won’t likely be sustainable.

 

Every DRP contract I’ve seen within the last five years is so one-sided, I can’t understand why any shop would sign one. They take advantage of the less experienced shops and thrive on their lack of knowledge. I’ve convinced some of my clients not to take certain DRPs on and they end up thanking me every time.

 

One source of revenue for shops that’s fairly new in California involves working with attorneys, who want to represent their clients in personal injury cases. They find them on Yelp and are building business relationships with shops that are getting good reviews. It has become a viable source of business for shops because these lawyers are representing injury victims and want to make sure that their cars are being repaired properly.

 

In southern California, everyone owns a Porsche, a Lexus, a BMW or an Audi. This means OE certifications are more important here than in many other parts of the country. Shops have to make certain their training is up-to-date and that they have the right equipment to do the job. Because if they can’t or won’t, there are 20 other qualified shops out there that can.

 

What are some of the most common problems your clients have encountered while working with insurers?

 

The Fair Claims Settlement Act (Section 2695.8) states that insurers need to pay out in a “workmanlike manner,” but they don’t do it.

 

When a shop writes an estimate, there are three things the insurance companies can do. First, they can adjust the claim, which means that they will write their own estimate. That means that the car has to be fixed using nationally distributed data---ALLDATA, Mitchell, for example---or the vehicle’s repair manual.

 

The insurance companies don’t do any of it. In fact, they write the lowest estimate possible. They make it impossible to...