January 2003

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How Would You Form a New Association?

Concerned pockets of shop owners, vendors and franchise shop foremen continue to meet with one of the main topics being discussed over chicken fried steak being how a new body shop association should be constructed. It seems that the majority who have taken the time to meet agree that it's about time Utah body shops stood together for quality repairs and fair compensation for a job well done. What remains are questions about how to go about it.

There are many ideas being thrown around on the threshold of this next organizational step. Should there be just one Utah auto body shop association? What about having one association, but with three affiliated chapters, Northern Utah, Central Utah and Southern? Would the new association be a non-profit organization and what kind of mission statement should the new group draft? What annual membership dues would be appropriate? Should membership in this new shop organization be exclusive and only made up of members properly screened to avoid more insurance carrier infiltration, or simply open to all who wish to join? Who should be on the association's first board of directors? How and when should a member be removed from the new association for bad behavior? And, just what constitutes bad behavior? What kind of legislative plans and goals should any newly formed group have for 2004? What things should the new association be on the lookout for from the 2003 legislature?

The shops that have responded to our "new association" surveys thus far run the gamut from, "I'm mad as hell and 1 won't take it anymore" to "I'm too afraid of insurance companies and repair industry politics to get involved". Luckily there were far more of the former, and less of the latter.

If Watch Dawg is invited to another one of these informal multi-shop meetings in January 2003, what concerns would you like us to bring up at that next gathering? Call, fax or e-mail us with your ideas and opinions. You don't even have to give us your name, but we would welcome your insight and feedback just the same. We thank all those who have already called or sent e-mails and faxes to us.

"You are the only one that charges for that"

By Bob Isham, New Image Paint & Body Shop, Tempe, Arizona

We hear this comment so often it makes me chuckle. It must be tough for the insurance companies to lie so often. I kind of wonder if they also lie to their wives and kids? I try to forgive them because I understand that they are only doing what their supervisors have asked them to do.

Our classic answer has always been, "That's funny, you are the only one that doesn't pay for that procedure". Frankly, we get paid for 99% of our procedures and I am not lying when I tell them that. I learned a long time ago that you can't afford to take the necessary time to fix a car right, and not get paid for it. In other words, you can't give away the store and expect to stay in. business. The collision repair industry operates on very thin margins and insurance companies are trying to slice costs on every repair. Every single time you collect an extra $25 or $50 it reduces your losses or adds to your profit.

Here are some things to ponder that can possibly add to your bottom line. They should appear on most every estimate.

A) Seam seal or caulking material, plus the labor to apply it if the estimate is written on the CCC database.

B) Weld thru primer material on panels welded together. Add labor time if on CCC.

C) Panel Bonding Adhesive. Both labor and materials are "extra's".

D) Mask each opening that you paint, plus bag the car for overspray. If you must bag an engine compartment, trunk or door opening, each one is a separate charge. Plus bag for the priming and bag for the final finish.

E) Panel Burn Prep, Adjacent Panels. When you weld on a panel you burn the adjacent panels and need to "repair", "prime", and "refinish" the areas.

F) Tint the color. Another "no brainer" don't give this away without asking the appraiser if he or she wants to tint the color in which case you can omit the charge.

G) Feather, Fill and Block is needed on almost every repair unless you are bolting on new parts. Anytime you weld on a panel or do repairs, time should be allocated for Feather, Fill and Block.

H) Collision Damage Access Time. Let's say the front end is stuffed in or you have to cut a door open to gain access. The labor manuals "assume" you are taking off parts that are "new and undamaged". How many cars have you worked on that were new and undamaged? We always ask for a reasonable amount of time to perform this task and guess what they pay us.

I) Color, Sand, and Buff is vital to virtually every single repair. Use the formulas in the "P" Pages to figure the times. Remember that included in the process is clean up time to remove the polish residue from the vehicle.

J) Hazardous Waste Removal. Unless the appraiser wants to take the excess thinners and materials away for you, you should be making a charge for this. If the insurance company does not include this in their payment, you should probably ask the customer to pay this charge.

K) Urethane Kits For Glass. Collision shops remove a lot of windshields, back glass, and quarter glass from damaged vehicles. We always add a fair charge for the cost, plus profit in the urethane kit.

L) Paint Caps. Not much can be said about this except they are illegal. If you are letting some joker place a material cap on your estimate I would suggest you don't belong in this business. My advice is don't accept a cap of any kind. Unless and until they cap the cost of the groceries you buy I feel it's unreasonable to cap materials.

The above are just some things you should be making charges for. Don't be ashamed when the appraiser says, "you are the only one". He or she is lying like a rug so confront them, make fair and reasonable charges and demand to be paid. Don't forget that if you are not paid, you don't have to perform the task. So consider all your options when giving the store away.

Thanks for the Referrals!

We want to thank those shops who have already referred their injured customers our way for help with their bodily injury claims.

When we represent your valued customer for their bodily injury claim, we assist them with their related auto damage claim for free .

Whether it's getting a fair price for a total loss, or fighting to get adjuster payment for a quality repair, our help is no charge to you, or your injured customer, when we already represent the customer for a related bodily injury claim.

Many body shops refer injured customers to us just so the shop can then receive our experienced legal help to deal with the repair issues and/or the misbehaving adjuster assigned to the case.

Let us earn your confidence. Please call, or have your injured customers call, (801) 446-6464 and ask for Bryan Larson.

So You Think You Have It Bad In Utah?

In Japan a high percentage of automobile insurance is actually sold by the auto body shops in that country. In many cases the body shop fixing the damaged car is therefore also the insurance agent. This creates all kinds of conflicts in even the most basic of repairs.

In Japan, the average auto body man makes about 20% less income than a technician in a comparable repair industry in that country.

In many eastern block countries the collision repair industry is split between modern high tech shops and black market back alley operations. Furthermore, with bad regional economies most Russian, Polish or Czech vehicle owners are reluctant to spend their cash to fix a driveable car or truck. The average body shop labor rate in Russia is currently only about $15.60 per hour. That was the average labor rate for bodywork in the USA circa 1978.

In South Africa the tow truck operators have the body shops in a strangle hold. Roving organized gangs of tow truck drivers tow damaged vehicles to body shops demanding upwards of 10% of the retail repair estimate written. Shops that refuse to pay this under the table "tribute" to the tow truck drivers eventually get no work. The tow truck drivers also routinely extort around $70 from the vehicle owners which most insurance companies there reimburse. The tail wags the dog in South Africa, with no real end in sight.

Bondo Bob

In our ongoing survey battle for the worst two insurance companies to deal with as a body shop, Allstate is in the lead from those shops who have called in so far, with Progressive and Farmers presently neck and neck for second place. Nationwide is probably fourth back in the pack. One of our body shop friends responded to our survey with an e-mail outlining the two worst insurance companies to deal with in his shop were Allstate, and Allstate. More on our "worst companies" phone-in survey next month. Keep calling, e-mailing and faxing.

Rumors are flying that CAPA is struggling to survive as some of CAPA's insurance company cronies are forking over less funding for what little CAPA may still add to the parts industry. The fact that many of CAPA's former best non-OEM parts are now being decertified can't help matters inside this fabricated corporation, that some say was only formed in the first place to put lipstick on pigs.

Nationwide is another one of the insurance companies frequently mentioned in our "worst" survey. We continue to hear of how their adjusters are pushing non-OEM parts despite State Farm getting burned for the same behavior with counterfeit parts. Some shops reported Nationwide fighting them over payment of simple operations that other insurance companies pay for without dispute as vital to basic repair operations.

We have received several sincere phone calls from former Allstate pro-shops seeking to receive their own monthly copy of our Utah Auto Body Watch Dawg. Acknowledging their contrite spirit, we have quickly added them to our mailing list database. When it comes to receiving this newsletter, we don't care what sins you've committed before eventually seeing the light.

It seems that a revolution may be brewing in the glass industry that may soon expose price fixing by some large auto insurers in their manipulation of these suppliers. More on that later.

For years Allstate Insurance and other carriers have armed their adjusters with computer software programs designed to help even the most inexperienced claims handler come up with the reasonable settlement value of a bodily injury case. The software program used by Allstate is called "Colossus". Colossus became the cornerstone of Allstate's attempt to automate their whole claims handling process in the 90s. Colossus recommends settlement offers based on comparable cases in its database. However, Colossus has now come under fire in numerous lawsuits across the land alleging that the software's database was purposefully manipulated by Allstate to spit out lower values for any given injury claim presented by an injured auto victim.

In August 2000 a former Allstate senior claims manager testified under oath in her deposition that she was instructed to omit all jury awards or informal settlements greater than $50,000.00 when she was called on to help fabricate the Colossus case value database in her locale. This repentant and former manager of Allstate adjusters said the exclusion of higher claim payments from the Colossus database was part of her employer's subterranean scheme to lower payments of otherwise legitimate claims. This claims handler testified that she was later fired when she complained about the way Allstate relied on the falsified database within Colossus to settle claims. Allstate contends this courageous whistle blower was let go for poor performance.

Virginia insurance regulators have already zeroed in on Allstate, fining them $20,000.00 for such claims devaluing behavior discovered by commissioner regulators in that state. A former California adjuster, Dani Bednar who worked for Allstate in the 90s, says she regrets following company instructions to extend settlement offers below Colossus case settlement recommendations, "I ripped off a lot of people and I feel very bad about that."

It seems that Allstate has been caught with their little fists in the cookie jar again. California's DMV has just formally banned Allstate staff from checking drivers' records online after Allstate employees were discovered illegally snooping through DMV records of friends, family and others. In one case an Allstate employee released confidential information that enabled a road rage driver to send threat mail to another driver.

The California DMV investigation apparently uncovered upwards of 131 violations of data confidentiality by Allstate personnel in as many as seven offices. In some cases, Allstate employees were fabricating fake claims in order to access otherwise restricted DMV data. An Allstate spokesman called the actions of Allstate's employees, "..a breach of internal policy" and that Allstate "regrets" the circumstance and that it is taking "decisive action" to correct the problem within their ranks. However, when confronted, the media spokesman for Allstate could not immediately say what those "actions" were.

See you next month.