Body Shop Sounds Off

March 12, 2007

Department of Consumer and Business Services

Insurance Division-2

P.O. Box 14480

Salem, OR 97309-0405

Attn: Greg Ledbetter

Dear Sir:

I am in receipt of your request for additional information regarding open claims filed with your office. I am somewhat disappointed that there are only 4 open files at this time. We provide this option to our customers who would like to try to resolve the issue of certain insurance companies underpayment of claims without having to initiate litigation. Of the 350 to 400 vehicles we repair on a monthly basis, I commonly have 15 to 25 customers who need to seek resolution for non-payment on their claim. Due to the time some carriers take to respond to supplements, make payments, and answer final requests for payment with denials, it may be several months to a year before I can determine there is a non- payment issue. I would not have any way to know which 4 files you are referring to.

If you would like to provide me with the names of the customers, I would be happy to respond with the specifics of each claim. In the interim, and for your education I have enclosed information regarding our position on the two major points that need to be addressed on current claims against Geico, Progressive, Allstate, Safeco, and Allied/Nationwide. These are the only insurance carriers who refuse to pay our labor rates for Body & Paint. These are also the only insurance companies who refuse to pay for Paint Materials per invoice or at least at a minimum rate of $27 per paint unit for estimated paint materials usage. Some of those listed above also have their estimates set and locked with a paint materials cost cap of $350 to $450 dollars regardless of the size of the repair. Farmers insurance also belonged to this category until the first of the year. The local office is now paying all of our current labor rates for Body, Paint, Frame, and Mechanical labor. In fact, their Helppoint service center in Oklahoma City has been paying our rates on many of the deskpaid claims since September of 2006.

There is a contest between these 6 companies every few years to see who can be the last one to acknowledge the new prevailing rate after a majority of shops in the area have raised their rates. Farmers, Geico, and Progressive usually change about the same time, while Allstate and Safeco hold a contest to see who can be last, changing months later. Last time, when Safeco finally started paying our rates, and I informed the Allstate appraiser who came out the same week on a reinspect, he immediately called his supervisor, relayed the message, and walked back in with approval to pay also. All other insurance companies usually begin paying almost immediately or within 60 days of the time when we increase our rates. This would lead me to believe we are not the first shop to go up, we are in the majority, and that the customer should be entitled to receive payment for the full amount necessary to pay for their repairs regardless of whom the insurance carrier involved happens to be, especially if that carrier claims to pay prevailing rates or the policy states they will pay a fair and reasonable amount for repair or states that the policyholder is entitled to payment of their claim at prevailing rates. We also allowed all claims scheduled within 30 days of the rate change with a date of loss prior to the rate change to be paid at the rate in effect on the date of loss.

I believe the basis of previous findings by your agency that the insurance company is entitled to pay only what one of their direct repair program contracted shops would have been paid for repair is flawed. In my experience with several of these insurers programs, I can tell you that the shop is only allowed to charge a maximum rate dictated by the insurance company. They are limited by contract to follow the repair guidelines given by the insurance company. The contract or verbal directives given in conjunction with the contract may require they write their drive in estimates for visible damage only incase the customer cashes out on the claim to minimize the payment issued. Once the customer schedules repairs and work is begun, then the shop is allowed to supplement the insurance company for the actual damages once exposed, but only at the costs the contract dictates. The shop may be given a list of things they are not allowed to charge for or specific limits on labor operations, often less than the standard charged by other shops and less than what they would charge any customer not having their repairs done via the DRP program. Generally the shop isn’t in a position to negotiate any part of the contract, only accept it or don’t be on the program.

Let me give you some insight as to what it means to not be on the program. First, customers are told many misleading, questionable, and unfounded things about your shop. Things like you will have to pay out of pocket for things they overcharge for. We cannot guarantee your repairs, unless you use a shop we recommend. We don’t recommend that shop. We would really like you to go to our preferred shop. If you don’t use our preferred shop, there will be a delay in being able to evaluate your vehicle, but if you go to a preferred shop, you can get in a rental today and they will start repairs right away. Your car will be repaired sooner. That shop overcharges for labor and materials. That shop does unnecessary repairs to pad their bill. They try to bill us for stuff that really isn’t necessary. That shop is very hard to work with. That shop will make you pay for the items we don’t cover. That shop changes their labor rates while your car is in the shop and you will be responsible for the difference. It would be much easier for you to go to the shop we work with, you won’t have any out of pocket expenses if you do, except your deductible.

My customers tell me that if they are still determined to come here after all that, it is not uncommon for the insurance representative to become hostile, rude, or short with them at that point and then say I told you so when they call them to complain the claim is taking too long to get resolved or repairs are on hold for reinspection.

The truth of the matter, the truth the insurance companies don’t share with the customer, is that most shops offer a lifetime warranty on their repairs and most so called insurance company warranties are basically just a promise to act as the warranty administrator to make sure the body shop on the program fulfills its warranty, the very same warranty they offer to every customer, not just that insurance companies customer, the very same warranty the customer would be entitled to if there repairs were done here. The warranties insurance carriers claim they are making on aftermarket parts are usually just a guarantee that they will make the parts vendor make good on their warranty should the part fail. The customer is entitled to have the part replaced under the parts vendor’s warranty and have their insurance company or the vendor pay for the labor and materials to do so even if the work is done at a non-program shop.

Most small shops simply can’t afford to refuse the contract or program because they will be blacklisted, have their customers driven away, have their reputation attacked, and not given the opportunity to even address these accusations and half-truths. Even if the customer has already signed a repair order, parts have been ordered, and the job has been scheduled, the customer is told just don’t show up, don’t worry about whatever you signed, and don’t call the shop, speak to them, or return their calls.

On the other side of the coin, shops that sign the contract allowing the insurance company to dictate how to repair a car and what to charge for repairs have a constant stream of customers directed to their door, virtually guaranteed a sale on every customer they write an estimate for that is not cashing out. They don’t have to wait for approval for estimates or supplements, they send files complete with photo documentation electronically for immediate payment upon completion of repairs. Their customers are given rentals with no hassle or question of drivability if they have rental coverage, or are a claimant. The shop has a reduction in the cost of overhead due to the lack of need for personnel to deal with insurance adjusters & billing and collections issues, reduced need to advertise, reduced cycle time for repairs and less non-productive space storing cars on hold, no customers demanding the shop pay their rental bill because their rental maxed before the shop got an acceptable estimate from the insurance company, and the ability to pad the bill with whatever they think they can get away with on speculative repair times or operations that are recommended but not necessarily done since they don’t have to prove to anyone that they actually did them. Operations we do and usually have to prove we did via photos like blending.

Does every contract shop take short cuts on repairs? Of course not. There are reputable shops like us who have tried to participate in these programs but we soon learned that the so called benefits and promised reduction of overhead expense that was suppose to justify the discount rates in the contract just don’t. If we as the single largest shop in town can’t afford to be on even a couple of programs that require discounts, can’t do enough business with non-discount work to offset the loss, can’t afford to absorb the losses from the 6 insurance companies who simply refuse to pay the same prevailing rate paid by the vast majority of insurance companies, and can’t work within the requirements of those programs to produce a quality repair and have enough profit left over to invest in the needed equipment, maintenance, and training to work on the next model year vehicles as they come out, I just don’t see how smaller shops can do it.

It is not my business how they make ends meet, how they repair cars, how they bill the insurance, but it should be yours. If the shortcuts and padding weren’t happening somewhere, insurance companies wouldn’t require proof of completed operations and be scrutinizing every item they are asked to pay for on every claim here. Unless they really just use all this as an excuse to short pay the claim even though they know that in most cases reputable shops don’t take short cuts because you don’t end up with the same quality of finished product if you take short cuts and you have to repair a car the right way for the customer even if you know the insurance company isn’t going to pay you for every step and material necessary to do so. I can’t use 75% of the necessary paint just because Safeco doesn’t want to pay for 100%. I won’t use a lower quality, inferior paint just because the customer picked the wrong insurance company to pay their claim. I also won’t inflate the prices I charge reputable insurance companies to cover the costs these 6 refuse to pay.

The wholesale price of the quality paint we use has risen drastically in the last 2 years; the increase in July of 2006 alone was 7%. We have provided documentation of this to the insurance companies, and most raised their rates for paint materials an equivalent amount. Most were also already paying a reasonable retail amount based upon the existing wholesale cost so the amount they increased to was reasonable also. Safeco has chosen to ignore the increase and refuses to increase the paint materials rate paid to all equally. Safeco in particular has a habit of thinking up new ways to cut the cost of the claim bit by bit by simply selecting a single product, service, or labor function and instructing their claims adjusters to only pay whatever new amount Safeco dictates for that. They refuse to pay everyone equally and somehow think because they aren’t being sued that they have proven it is now the industry standard charge for that item or procedure. They say all the shops are accepting it when you tell them it is unacceptable and then they tell you that although you are entitled to charge whatever you want, you should consider not accepting the repair job if you are unwilling to do it for the price they are willing to pay. They are not reaching a price thru negotiation; they are just refusing to pay everyone equally.

These insurance companies should not be allowed to give equal weight to the rates charged by their contract shops unless they are adjusted by the benefits given to those shops in exchange for the discount rates. They should have to consider the rate that shop charges to the general public as the rate offset by the equivalent benefit received. If a potential DRP shop agreed to do a repair for free, parts, labor, and materials, in exchange for a guarantee from the insurance company that they would be offered the contract, referrals, etc, would a claimant or insured then be entitled to no compensation for the loss because the insurance company could negotiate to have the repairs done with no actual money being paid for them?

Not in Oregon. A consumer cannot be required to use a particular repair facility as a condition of making a recovery for the damages.

Farmers has been the most reasonable of the 6, accepting documentation of cost of materials and research on following manufacturers guidelines, evaluating the research and documents, and coming to the right conclusion regarding payment for those items on future claims. They did a survey in April, just when many shops rates had gone up, or were just about to, but then waited until nearly the end of the year to do another, and rates went up at the local office directly after that. I feel that the surveys these insurance companies do (and by the way, of the 6 only Farmers sent us any surveys last year) should require them to consider market share when determining prevailing market rate.

There are several vehicle lines that I believe Precision preformed over 50% of the total repairs done in the marketplace last year. These are lines like Audi and Porsche, which require a major investment in training and equipment to become qualified to perform repairs to meet the manufacturers guidelines. There should not be a question of payment of rates on vehicles we repair the market majority of.

A consumer should expect the policy they have purchased to cover repairs at a qualified repair shop with the necessary equipment and personnel to restore the damage to meet the manufacturers guidelines. Seeing first hand the additional training necessary to bring the average newly hired Journeyman level bodyman (from another shop) up to the level of expertise required to repair these particular vehicles, I know that techs just don’t come out of school with the necessary knowledge to do the job right. I am not trying to be a luxury car snob; its just that certain cars (and certain customers) require a higher standard of repair. It is no different than the very real dangers of working on a hybrid electric car without the proper training and equipment, like electrocution!

We are in the process of making the necessary investment in training and equipment to certify our facility to make repairs to the structural aluminum components of new Hondas, Audis, Porsches, BMWs, Landrovers, etc. I imagine there will be great opposition from the 5 insurance companies we always have issues with when we unveil the rates for repair of these aluminum vehicles. Without your department’s support and encouragement, other shops will not be able follow our lead to become qualified to do these repairs and the results will truly be catastrophic. Improperly repaired vehicles with aluminum components are an immediate threat to the safety of the owner of the repaired vehicle and the general public. If the repairs are not done in the proper environment, using the proper specialized tools, following the proper aluminum welding and repair guidelines, component failure is a very real probability. Adverse performance in a subsequent loss is also highly likely. There are only 1 or 2 other shops in the metro area that I am aware of that are in the process of training and making the necessary investments to be certified for aluminum repair of the vehicle product lines they specialize in. The predicted capital investment required to build the isolation bay, buy the necessary tools and equipment, and to be certified by Audi to repair their aluminum vehicles is approximately $200,000. Over and above that, adding other car lines to the certification will hopefully just entail sending the technician to that lines certification program to learn the manufactures repair guidelines for their particular vehicle design. Costing thousands of dollars and taking several weeks, loosing 2 productive weeks at home, these are things technicians just aren’t willing to do on their own, this has to be paid for by the shop and the insurance companies have to allow us to make enough money to do so.

Safeco’s decision to pay all set up and measure of vehicle frames or unibodies at 2.0 labor units at body rate instead of the long held standard of 2.5 labor units4 at frame rate undermines every shops ability to purchase and maintain the frame rack, measuring system, and computer system necessary to perform that function of the frame repair. It also short pays the technician the time necessary to perform each and every step necessary to properly evaluate the damage and determine what will be necessary for repair. The difference in rates is how the shop receives payment for the use of the equipment, that’s why there is a frame rate that is commonly 5 to 10 dollars higher than the body rate, shops charge more for newer technology and less for older. If every insurance company took this baseless stance, there would be no frame racks and measuring systems because there would be no way to make enough money to buy them. Most shops have to finance their purchase over many years.

This outrageous policy if allowed to infect other carriers will result in shops not being able to make the commitment to update their technology to meet the needs of the next generation of autos. We just don’t work on Chevy’s with factory tolerances of +or - 4mm any more, most tolerances are now + or – less than 2mm. And yet Safeco expects us to use our equipment they refuse to pay for, provide printed documentation of the work, and then cries fraud if we tell them they won’t get it if they don’t pay for it. Even if they only wanted the technician to take measurements the old fashion way, not use the rack, measuring system, or computer, not make any pulls, someone would still have to pay for the published specifications book to have the measurements of an undamaged vehicle to compare it with. Insurers have a responsibility to support the repair industries efforts to perform the repairs necessary to restore the vehicle to its pre loss condition, as close as humanly possible in the after market, because that’s what the policy they issued covers!

The reason your office is receiving complaints on only certain insurance companies is due to the fact the others, some with gentle coaxing, just don’t need that much help to make the decision to do the right thing. I have enclosed a plethora of information on these 5 special companies and the special attention being lavished on Geico in the state of California by the Senate subcommittee that called Geico to appear and answer for their claims practices, because of how many claims customers have had to file with the Insurance Commissioners office in California to bring to light the labor rate underpayment there.

It might interest you to know that Allstate’s 4^th quarter net earnings last year were over a billion dollars, attributed to the fact they simply didn’t pay out as much on claims. It seams clear to me that the payments being made to their shareholders take precedence over their responsibilities to their policyholders to pay a fair amount for a quality repair. Now I know where that 10% discount they give themselves on each bill we send them goes.

We as an industry have been so preoccupied on being underpaid, we don’t even have time to focus on the larger issues, like aftermarket parts, carrying meaningless certifications that do not guarantee their performance in an actual crash, do not measure their ability to respond the way the OEM parts would in doing their part to absorb the force of impact and relay inertia information to the airbag and restraint system designed by the manufacturer for use with OEM parts, tested and calibrated with OEM parts. Not to mention the simple fact that if these parts were equal or superior to OEM parts in fit, finish, function and corrosion resistance, my techs would not be able to tell the difference and would not refer to them as CRAPA instead of CAPA, would not belly ache and plead not to make them use those parts, would not complain about all the extra time needed to make the part fit best as possible (that they won’t get paid for), would not have me order an OEM taillight or have to use the broken OEM one as a guide to sculpt the opening they are repairing, or check the gap for the trunk lid.

They know they can’t repair it to fit the aftermarket part to be installed, they have to fix it to accept a new OEM part just incase the customer is lucky enough to get an OEM replacement next time or incase the customer rejects the color or reflectivity of the aftermarket one and the insurance approves an OEM replacement. We have to make repairs to fit an OEM part and then make the Aftermarket part we are required to use fit as best as possible. But due to the time we currently have to invest just trying to get paid, sometimes months for even undisputed amounts, and longer for fair payment from the underpaid claims, we just don’t have the time or resources to focus on this issue, to document every part that has been certified to appear to meet the criteria of the law, but in fact falls sorrowfully short, to contact all interested parties, to bring repairs to a halt while we wait for CAPA or the insurance company to overturn the certification. I am convinced that if we could focus on this issue, in a years time we would be able to bring this whole system down and once again we would be back in the business of truly being able to restore cars to what the customer purchased and what the manufacturer designed and sold instead of piecing together an un equivalent generic Frankenstein.

I have enclosed a copy of a published report from an American car manufacturer, done at their own expense, a thorough comparison of just two aftermarket parts versus OEM original. It is shocking, stunning, and amazing that everyone has allowed this nonsense to go on so long, I guess distracting shop owners by robbing them blind has enabled certain insurance companies to slip this by both you and the public.

Perhaps the oldest issue between a majority of shops and a somewhat larger number of insurance companies is over the pricing of parts. Most insurance companies respect the MSRP or published list price of new OEM parts. However; on virtually anything else, some say they are only “allowed” to pay a 25% markup over the price we pay and demand to see invoices for the purchase of those other parts or other services we sublet out to specialists. If the nation’s largest insurer, State Farm, pays the 30% markup we use to price these items, why do others feel they are justified in not paying it? You can’t walk in to any other establishment and say you are only going to pay a 25% markup over their wholesale cost, lay your money on the counter and walk out. You would be arrested. The only established “standard” in the industry is that the shops’ goal as a minimum is to purchase a product wholesale for 25% less than retail pricing. A 33% markup is equivalent to a 25% discount off of list. For example, on an item with a $100 list price, purchasing it for $75 would be our goal, a 25% discount. However, if you multiply $75 by 1.25, it is certainly not $100. Most shops have negotiated a %25 discount off of list price or MSRP with their OEM parts suppliers, why should they not be able to expect the same financial arrangement with all vendors. Why should that not be the standard way to figure out what the retail price should be for items without a published retail price. It is clear that the prevailing amount for a shop to pay for everything is 25% off of list as that is what they pay for a majority of parts purchased. That would mean the shop was entitled to mark up the cost by 33% to calculate that price. We only mark it up by 30%. Once again, more than fair.

Those same insurance companies allow all shops to charge them the published list price for aftermarket certified parts from suppliers such as Keystone and Mac’s Radiator even when both the suggested list and wholesale cost are printed on the invoice and it is clear the shop is purchasing the part for a 30% to 40% discount off of the suggested list price. It is considered the shops’ “reward” from the insurance company for using an aftermarket part. Yet I will not be paid a reasonable list price on the used or reconditioned OEM parts we locate which are preferable to the aftermarket parts and still cheaper than the new OEM parts.

The same can be said of the markup they “allow” on sublet charges to subcontractors. We have to transport the vehicle, micro manage the work, keep the customer and insurance updated on the cost and progress, be responsible for the outcome, pay the bill, carry the expense on our account for months or years before we are reimbursed, keep records required by the IRS, verify and maintain verification of insurance coverage on those vendors, be able to guaranty the quality of the work performed; but once again, certain insurance companies feel they have the right to set a policy to pay nothing over the amount we pay the vendor, or pay 20%, or pay 25%, some only want to pay $25 maximum. Many times we have told those insurance companies to feel free to make the appointments, take the car there themselves, handle all questions from the customer and the vendor, pay the bill, and bring the car back to us to complete. They don’t seem to think it is reasonable for us to ask them to do that, but yet they think we should do that for whatever amount they say, not the amount we have calculated to be necessary to charge to cover the overhead involved in actually doing it. They also have no respect for the fact the price we are charged may reflect a discounted rate we have negotiated with the vendor in exchange for bringing the work to them exclusively. Once again, we are only seeking to charge a list price that will allow us a 30% markup over our cost.

A markup which I have already established to be below the majority of markup paid on the majority of other items purchased by the shop for the repairs. These same insurance companies actually require the shops to provide every invoice for the items purchased for the repair just to be paid. They will not pay for items solely based on the retail price we quote on our estimate or on our final invoice. In addition, they expect copies of all of our vendors invoices be provided to them free of charge. When we posted a notice that the price for copies of our vendors invoices would be $1.00 each, and could be provided at the customer’s request, we were warned that claim payment requests submitted with only our itemized invoice for the parts and services we are selling the customer would be ignored. The standard fee we are paid per page for copies of items requested from a file for a court proceeding is $2.00 per page. Somehow, the paper, ink, copier, and time required to pull and copy vendor invoices for a specific claim from the thousands of invoices we pay each month is not worth $1 per invoice. Doesn’t the customers’ policy cover reimbursement for procuring documents the insurance company requires to substantiate the claim? Especially when those documents are in addition to the itemized sales receipt we provide for the repairs we are selling the customer. Our contract is with the customer for the repair of their personal property, not with the insurance company. We bill the insurance company as a courtesy to the customer. We allow the insurance company access to our property to inspect the vehicle during the entire repair process, during all business hours that the shop is open to the public, with the exception of Saturday from 9am to 2pm, during which time only the estimating office is open to the public, and the shop is not staffed. We make every effort to verify with both the customer and the insurance company what damage is related to the loss that a claim has been filed on. We spend a lot of time educating untrained insurance staff on the necessary process and parts to affect a quality repair. We make available copies of our initial estimate to the insurance personnel, and contact them as additional damage that is beyond the originally visible damage becomes evident. We make every effort to document via photos actual hidden damage if we are not able to hold repairs indefinitely waiting for an insurance company inspector to return our calls or actually make it out to reinspect, sometimes a week later.

Even when they do come out, or we fax them the supplement and email photos, that is no guarantee of receiving their supplemental appraisal in a timely manner, often they say, ”Keep going, don’t hold repairs”, not wanting to pay extra rental, and then they don’t give us a copy of their completed supplement or payment for months after repairs are completed. If it didn’t waste productive space to store vehicles until we received the supplements, we would. But then you also have the issue of a customer who probably has minimal rental coverage or no rental coverage who wants their repaired vehicle back now and doesn’t want to pay anything more than their deductible when they pick up, and definitely doesn’t want to exercise their option to pay their repair bill in full and submit it to the insurance for reimbursement. Trust me, claimants don’t want to pay a dime. We have enough fun just trying to explain the betterment the insurance company forgot to inform them would be charged on their tire or faded paint.

Lastly, I have to state for the record that we are of the opinion that it is not our place to tell the customer the insurance company will intentionally underpay the claim, violate the terms of their policy, not inform the customer of their rights to arbitration if any, and falsely state that they are paying prevailing rates until they actually do so. Furthermore, once we have provided the insurance company with an estimate at our rates, repeatedly made known to them what our rates are and that we will not give them a rate discount on any claim, repeatedly made known to them that we will assist the customer in collecting payment for the full cost of the repairs they are entitled to; it is our position that it is the insurance companies responsibility to notify the customer of anything they are denying coverage for under the terms of the policy. Once payment has been denied, then I will be happy to assist the customer in their pursuit of a fair settlement. I have no way to predict what day and time they will stop this nonsense, or what office the claim will be handled out of in the case of Farmers and certainly don’t want to slander or liable them.

A reasonable person would not assume the amount they are legally entitled to for repair of a loss, especially a claimant’s property damage loss, would change depending on what insurance company the insured was insured with. If the bill would be paid in full by a majority of other insurance companies, a reasonable person would expect the bill to be paid in full. If an insurance company wants to approach a shop to request or negotiate a discount, they are certainly entitled to do so, but if that shop has no contract with the owner of a specific vehicle to repair the vehicle, that other shop has no legal right to negotiate on the owner’s behalf for the cost of repairs. We go out of our way to make it clear to these insurance companies that any negotiation for a discount on the cost of repair can only be made thru a written agreement with the President of Precision Body & Paint, Inc. Why would we give a discount and get nothing in return? None of these companies can produce a signed document showing we agreed to give them a discount. A reasonable person would assume that they are entitled to payment of their repairs at the rates charged to the general public at a majority of shops and at rates paid by a majority of insurance companies.

Again, no one is saying they can’t ask for a discount, but trying to claim that the rates they set at the shops they have contracts with for a discount in exchange for special services and privileges are the prevailing rates is ridiculous. They are entitled to ask, we are entitled to say no. We work very hard to educate insurance adjusters on the proper procedure to repair the vehicle and put a lot of effort into preparing estimates and final bills to reflect just what was needed for repair, no more, no less. We often issue refunds to insurance companies who select replacement of a component that is both more cost effective and logical to repair instead of replace. If they select an unnecessary part, we credit it back. We have no desire to inflate the cost of repair and thus our customers’ premium.

Many insurance companies just make payment off of our final bill because they have learned thru years and years of experience that we do exactly what we say we will do; repair the vehicle per the manufacturers guidelines, do only what is in the best interests of the customer, and do everything in our power to restore and protect the value of the property we have been entrusted with. I dare you to ask one of the 6 who don’t pay their bills what shop they would prefer the customer have the vehicle repaired at if they knew in advance that the customer was going to seek an award for diminished value after repairs. What shop goes the extra mile on every repair to be sure they have restored the vehicle properly, minimizing their exposure. I’m sure we would be in their top ten, probably #1 if they were being honest. What shop gives their insured a loaner car to drive when their rental has been exhausted waiting for an unqualified insurance adjuster to get around to giving us some kind of estimate even close to covering the necessary scope of repairs. Once again that would be us.

If the customer’s policy actually stated that, on repairs of their own vehicle, the insurance company will make payment only in the amount they will dictate to the contract shop to charge, who may or may not be qualified or have the recommended equipment to actually make the repairs, then the customer should be informed of that at the time they purchase the policy and at the time of loss, told by the insurance company that they can go elsewhere and pay the difference, but only if that is what their policy truly states. I have yet to see a policy like that. By the way, I have customers who have been fed that line and believe it, and still come here for repairs, pay the difference, and just expect that is what they should have to do to be assured of a quality repair. That is sad. They justify it by believing that is what their policy covered, believing you get what you paid for, and you paid for cheap, so you got cheap. They also usually go out and shop for a new policy with a carrier on our “preferred list” soon after, because they don’t even mind paying a little more to be sure they will be covered next time, especially when they realize next time there might be a claimant involved who might sue them because their insurance didn’t pay the whole repair bill.

If you are going to consider the rates dictated to the contract shops to be the prevailing rates in the industry, even though those rates are not available to the general public having their repairs done at the same shop as a customer pay, then the privileges and services lavished on those contract shops by the insurance companies should be considered standard and prevailing for the industry as a whole also. The insurance company should have to give us the same things they give those shops. If they are going to be allowed to dictate what rates the consumer is entitled to have paid on their behalf for repair, they should have to make available to us exactly what they make available to others to reduce the cost of overhead necessary to be charged for those repairs. Many shops are coming to realize the deal is very one sided, they are not receiving the benefits necessary to decrease their overhead enough to be able to afford to give these discounts. Many shops will be making the decision to drop their contracts and risk being blacklisted this year, and we will be here to support them. I wish I could say with confidence that we are counting on your office to do the same.

I would encourage you and your associates to accept our invitation to tour our facility, I believe it is the largest in the state, and I can assure you our owner would like to meet with you and your associates to discuss these issues. He is on several local and national autobody repair committees and boards, has 30 years of expertise, and is very active in promoting education, certification and licensing, and the legislation necessary to make it happen. I would appreciate it if you would share the GM and CAPA-Certified Hood and Fender Analysis publication with your associates and also Ron Fredrickson and then return it to me in the post-paid envelope. It is the last copy I have.

Sincerely,

Julia Adiran

Precision Body & Paint, Inc.