Friday, 19 September 2008 14:19

BAR Labor Rate Survey Controversial

The president of the CRA, Lee Amaradio, cautioned automotive repair dealers (ARDs) that voluntarily providing the Bureau of Automotive Repair (BAR) with labor rate information could hurt more than help ARDs to obtain reasonable labor rate payments from insurers.

“On the surface it appears fair to give a state agency information about retail labor rates,” said Lee Amaradio, CRA president. “But the buy-in may be costly to those ARDs who believe that insurer payments should be based on our reasonable cost of doing quality repairs as opposed to relying on an average determined by unregulated mathematics.”

Amaradio said it was critical to understand the dynamics of the BAR’s request for information, given that the CAA supports the BAR information survey. “I don’t have a problem with registrants responding to past survey questions, but the BAR has never before requested that we report our retail labor rates. Even though this is a voluntary survey, it still carries with it the importance of reporting to a public agency.”

CRA’s lobbyist Richard Steffen explained that all ARD reported information is considered public information that will be provided by the BAR to any insurer that requests the individual responses of ARDs. “You will end up with a bunch of self-reported labor rates,” Steffen said, “that could form the basis for an insurer to calculate an average labor rate for a specific market area.  Maybe the average rates will be high, or maybe, based on a limited response, the rates will be lower than those of ARDS who didn’t report. There aren’t any obvious ground rules other than this: if a shop reports a retail rate, it is stating to a public agency that outside of DRPs and special discount situations, this is the rate it collects.

Insurers are already armed with their own rate surveys that they will use to argue the rates reported to the BAR are rarely collected and, as a consequence, they may claim ARDs are making false and misleading statements; i.e., they are committing fraud.”

CRA Executive Director Allen Wood said the involuntary nature of the BAR information request leaves the entire process open to abuse. “Insurers  will pick and chose from this voluntarily supplied information to create a data base that favors insurers. While the CRA is opposed to labor rate surveys, we would accept new rules from the Department of Insurance that would limit how labor rate surveys are used by insurers.  The proposed rules are due to be released within the next week and we would have preferred to wait for those rules rather than have the issue clouded by a voluntary survey conducted by another agency.”

IN OTHER NEWS: CRA has asked the Governor to veto AB 2825. In the final version of the bill, the measure would require repairers to give customers copies of wholesale invoices for crash parts that cost $50 or more.

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