Retro News: Prevailing Practices, Doing Business on Internet, 2-Way Estimating, Steering Suits
Written by John Yoswick, Autobody News
Published December 2, 2014
20 years ago in the collision repair industry (December 1994)
The cause and effect of “prevailing practices” was just one issue addressed by an inter-industry panel at the National Autobody Congress and Exposition (NACE) Forum in Las Vegas in December.
Moderator Meryl Comer opened the discussion by asking panelists who they believed is responsible for setting “prevailing practices.”
“I think if you ask some of our insurer friends, they’d probably say prevailing practices are set by the shops in the area,” California shop owner Jack Caldwell said. “Whatever most shops do, that sets the pace. And I guess to be totally honest, I’d have to agree, that’s where it starts. However, prevailing practices can be and are modified by the guy with the checkbook.
Insurers on the panel agreed that prevailing practices are their attempt to “mirror” the majority of collision repairers in a given area when preparing or auditing estimates, but shop owners criticized the “one-size-fits-all” approach insurers sometimes use.
“It’s important to note that cars are changing,” Texas shop owner Joe Sanders said. “We perform operations today that weren’t necessary a few years ago. Resetting electrical components, for example. That may have only been done in our shop once or twice a month two years ago. But we do that routinely now every day. That process is prevailing in our operation, and I shouldn’t be held back because the shop down the street works on older cars and doesn’t have to do that.”
Most of the questions from the audience during the forum were addressed to the insurers on the panel. Gerry Westerfield of State Farm was asked how shops can respond when adjusters “quote unwritten and undocumented company policy for not paying standard P-page procedures.”
“If a State Farm representative comes to your shop and says, ‘We don’t pay for that, it’s company policy,’ take it from me, we don’t have that policy,” Westerfield said. “So tell them, ‘I know your policy and that’s not it. Who’s your supervisor?’” – As reported in Spray Dust magazine.
15 years ago in the collision repair industry (December 1999)
Soon there will be no choice. If you aren’t already using the Internet, you’ll have to in order to stay in business.
By 2001, GM will require all of its suppliers to do business over the Internet. Ford has similar Internet plans. Allstate announced last month that it would soon sell insurance over the Internet.
In today’s business world, it’s get online or go home. To remain competitive, collision repair faculties will need to use the Internet to their advantage.
How will collision repairers be using the Internet? Parts ordering, for one. You can already tap into lustineparts.com and CarStation.com to order parts. And there may come a time very soon when ordering parts over the Internet is handled regularly through brokers. Just as a person looking for an inexpensive airfare can go through Priceline.com, a collision repairer looking for the best quality part at the cheapest price will be able to go through a middleman.
The bad news is twofold. For starters, the Internet gives the insurance industry a whole new arena to control. With its financial emphasis on price (sometimes at the expense of quality), the insurance industry will be looking to use the Internet to find the cheapest parts it can. In cyberspace, look for price to reign over quality.
A second disadvantage to the Internet is that it will be more difficult for collision repairers to keep information about their businesses private. In addition to brokering deals, Internet middlemen will be compiling information about the buying habits of collision repair shops. They in turn will sell this information to others interested in making a profit on the industry. – From an editorial in Hammer & Dolly by Sheila Loftus.10 years ago in the collision repair industry (December 2004)
The Society of Collision Repair Specialists (SCRS) is circulating a petition in support of two-way communication between like estimating systems. This is the ability to electronically transmit and receive the vehicle owner’s assignment information, estimate, supplement or attachments between insurers and repairers that are using the same estimating system regardless of whether a DRP relationship exists between the companies.
“Two-way communication, as SCRS defines it, would eliminate many of the inefficiencies inherent in the current claims handling process, most specifically the rekeying of the estimate,” said Lou DiLisio, chairman of SCRS. – As reported in Autobody News.
It took nearly a decade, but two of the Big Three estimating providers now offer systems that enable shops and participating insurers to exchange data electronically outside of a DRP relationship.
5 years ago in the collision repair industry (December 2009)
In fining Allstate Insurance $5,000 for “interfering with (a) consumer’s free choice of repair facility,” the Insurance Division of Rhode Island’s Department of Business Regulation also clarified what constitutes such interference by an insurer.
In reviewing a complaint brought by Providence Auto Body, the Department said that “without a legitimate business reason, an insurer may not take actions that make it more difficult to have the repair done at a (shop) with which the insurer does not have a contractual relationship.”
In this case, the Department found that a combination of actions by Allstate constituted interference with claimant Dennis D’Ambra’s shop choice.
These actions included:
- delaying arrangements for repair of the vehicle (after the shop contacted Allstate saying D’Ambra had hired it to do the repairs) until Allstate could locate and contact D’Ambra seven days later;
- telling D’Ambra that Providence Auto Body was not “approved”;
- suggesting that D’Ambra take the vehicle to a drive-in claims center after he had already said he wanted Providence Auto Body to repair the vehicle; and,
- taking 15 days after contacting D’Ambra to conduct an appraisal of the vehicle at the shop.
- The ruling states that discussion by an insurer about its DRP or drive-in claims center is not in and of itself an indication of steering.
“However, when the customer indicates that he does not need or want that information, as D’Ambra did here, the conversation must stop,” the ruling states. “The customer has the right to simply choose a shop and have the shop ‘handle’ the repair.” – As reported in CRASH Network (www.CrashNetwork.com), November 14, 2009.
Almost five years later Oklahoma Attorney General Scott Pruitt last month issued a warning in his state about the practice of “steering” by insurers, in which “insurers strongly push consumers to autobody repair shops,” sometimes “crossing the line, making dishonest statements.”