The body shops would not have to resort to such laws as this if the insurance companies did not steer the customers to their shops. We need to get back to marketing 101. If you do great work at a great price and in a timily manner you win. This bill is just a result of the insurance companies bulling customers and shops.
The following Quotes from the article show how foolish the statements are.
“It’s common practice to prohibit insurers from requiring that a specific repair be made at a specific repair facility,” LaCost said.
In actual practice, many insurance companies do, in fact, strongly “suggest” that a specific repair be made at a specific repair facility with the implication that if you go against their suggestion, you will have many problems. This is intimidation at its very least.
“If they choose a shop their insurer recognizes as reputable, the insurer generally waives its own estimation process and allows the consumer to go directly to the shop.”
This shop is usually chosen for its low cost not quality repairs, as they would imply.
The insurance assosications are preaching that the cost of insurance would be skyrocketing. They already are doing that but this bill dose not have a bearing on what those skyrocketing costs are about.
All anyone needs to do is take a look at the profit being reported by the casualyt companies and they will see why the insurers want to kill this bill. There motivation is all about control to protect their profits.
The Illinois consumers are paying higher prices everyday and they are receiving less for their insurance dollars. The insurers are omitting repairs that the consumers deserve, when their vehicles are repaired. The consumer will be driving their vehicles and paying for them for an average of about 5 years. When the low dollar repair don’t go the distance who is being affected? The insurer is usually out of the picture and the comsumer is paying for unnecessary maimtaince out of their own pockets.
The legisators need to take a good look at the fox that is trying to be the hen house guard. The introduction of HB2330 is one that truley serves the consumers by giving them the comfort of knowing who fixed their car and that the person they know and trust will be there to help them. Most important is why would the insurers say it would cost the consumer more, they are not profiting from their collision. They were deserve to get paid to compensate their loss, which is why they pay the insurance companies outrageous premiums in the first place.
Consumers? Maybe, but since repairs are usually guaranteed by the insurance company and/or the body shop, what’s the need?
Auto body shops? Bingo!
I would guess the bill was proposed at the behest of the auto repair industry. If, however, it was in fact proposed as a consumer protection measure, it is probably aimed at nonstandard insurers that steer work to shops that do sustandard work on the cheap. Unfortunately, it’s difficult to carve out the bad guys, so everyone is going to end up getting hurt.
For some perspective, can you imagine what would happen to health care costs, including insurance premiums, if health insurers were forced to pay whatever any doctor wanted to charge.
Out of curiosity, does anyone who posted previous to me work for, or represent as an agent/broker, reputable auto insurance compaies?
Gee, that’s a novel approach. Imagine a business being able to set its own sell price. And a customer who is satisfied and willing to pay it. So who’s unhappy? Just the middleman who is trying to take a bite out of both! Phooey on them!!!
The insurer doesn’t recognize a shop as being “reputable” It only recognizes them as doing the job for a LOW PRICE. Sometimes forcing the shop to use lower quality parts and perhaps taking short cuts to save time and labor expenses.
As for being out of line with the rest of the country. They should really check out the laws in other states.
I’m happy to see that something is being done to help the repair industry. For too long insurers have been dictating what they will and will not pay and steering work to their preferred shops who will agree to use inferior parts or whatever the insurance company demands.
When the insurance companies can come into a shop and tell you what their percentages will be on new glass pricing before the glass shop even knows what the prices will even be, who’s the bully here?
Two major insurance companies in my area have cut my business by nearly 100% by steering because I refuse to agree to use parts they dictate because I believe it is cheating the consumer. I have confronted one of the insurance adjustors about it. He admitted that it was wrong, but his bosses said they had to have their percentages and he had to work somewhere. If anything drives prices up it will be the insurance industry’s greed!
They have been caught in fraud in courts all over the country and have paid huge sums of money in suits, but claim no wrong doing. They have the money to drag it through the courts for years before they pay.
If the insurance companys would take full responsibility for inferior work and parts done and used by a recommended shop then their current system might be good for the consumer. The problem is that they make the network sign a contract that absolves the insurer from any problems with the repair and then the network makes the repair shop sign a contract that absolves them from liability for problems with repair. The poor consumer is then subject to all the problems with no place to turn except the repaior shop recommended and verbally forced on them by the network.
Since the insurer does not want to take responsibility for this then they should not have the right to choose.
Since when is it OK for one Industry to control Another? What this law would do for those who speak small town English, it allows the OWNER of the Vehicle to once again have a say who repairs their vehicle, and at what cost, the Insurance industry doesn’t own these cars so why are they the ones to say what the cost will be, they have everyone doing their job but they gain the profit from it!
Pass the law, give the repair back to the Insured and watch the Economy grow!
When a body shop is in any type of a deal with an insurance coompany agreeing to take a LITTLE less profit in return for the increased volume of work, does the shop do it in the interest of the insured or its own interest? Any compromise that’s made that takes away from the insured is fraud unless the shop is willing to fill the gap on needed repairs.
I don’t know anyone who’s willing to do that and work for less, so the shop commits fraud as well.
The way trial lawyers are looking at insurers in their fraud may also start looking at the shops that work for them.
Imagine, a good trial lawyer asking a shop,”What is your deal?” The words out of their mouths could be their demise.
Sure insurers have the right to control their cost of repairs to damaged vehicles…but not to conspire to limit and subvert their contract for their own financial gain.
This bill would make insurance carriers responsible for their practices and actions, something which seems to be quite vexing to the insurance lobby.
They have the right to repair the car themselves to limit their cost… something they do not want to acknowledge, the status quo has been to profitable.
Read the upcoming McGuire article in March Bodyshop Business… the cat is out of the bag and look for this bill to become a national template.
Financial gain? I’m curious how an insurance company gains financially when they’re writing the check.
While I’m on the subject, how is the insurance company a profit taking middleman that is taking a “bite” (see a previous post) out of both sides. Again, they’re expending funds. Only two entities make out in any way, the body shop and the insured. And the insured is just being put back to about where they were before the damage.
I know the owners of a number of body shops. All but one is willing take a little less profit in return for the increased volume of work that can come from a working partnership with a quality insurance company.
I used to own a body shop in Long Island, and this would be a great law to pass. I would be rolling in $$. I can tell by the bad spelling that most of the posters own body shops too! Wow, you guys can actually werk a computer?
Consumers? Maybe, but since repairs are usually guaranteed by the insurance company and/or the body shop, what’s the need?
Consumers? Bingo
What’s happening now is vehicles are not being repaired to pre-loss condition which means to factory tolerances. Many consumers are driving unsafe cars and they don’t know it or won’t know it until they are in a second accident. What good is a guarantee if you are dead?
Consumers? Maybe, but since repairs are usually guaranteed by the insurance company and/or the body shop, what’s the need?
Consumers? Bingo
What’s happening now is vehicles are not being repaired to pre-loss condition which means to factory tolerances. Many consumers are driving unsafe cars and they don’t know it or won’t know it until they are in a second accident. What good is a guarantee if you are dead?
I used to own a body shop in Long Island, and this would be a great law to pass. I would be rolling in $$. I can tell by the bad spelling that most of the posters own body shops too! Wow, you guys can actually werk a computer?
Just look at the labor rate difference between a dealership’s mechanical shop and what insurance companies want to pay the body shop located in the same building. Customers subject to a free market are willing to pay double what insurers are willing to pay in their mafia style racketeering scheme they call Direct Repair Programs. Then you poor insurance agents have to deal with a pissed off customer because their insurance company won’t pay for a proper repair.
Body shops are steering customers away from the scoundrel insurance companies by the millions by educating their customers about which insurance companies play fair. You agents need to exert some of your power and get the big daddy insurance companies to ease up on the body shops.
In response to Mr. Plapp.
Are you saying that the insurance industry is not improving their profits by steering the customer to a prefered shop?
Less expense = more profit….simple business.
You say the insured is being put back to ABOUT where they were before. Is it not suppose to be “preloss condition”? not “close to preloss condition”
This whole situation is taking place in the Auto Glass Replacement industry also.
“Working with insurace company” for a increase in volume means:
Repairing vehicles per guidelines created by the insurer to reduce cost, through elimination of needed procedures, limitations or “caps” on materials and allocation of used or reproduction body parts. Some “highly” regarded insurers even direct repairers to perform clipping of total losses to save them.
Of course the repairer needs to cooperate in these schemes.
The irony of this bill if you bother to read it… each practice outlined, insurers deny doing… but they scream the bill would hurt them and consumers?!?!
Yes, reduced expenses do flow to the bottom line. However, spending less isn’t the same as making money, as some previous posts seem to suggest.
Very few autos that have been wrecked are ever the same after repairs as they were before the accident. I don’t care who does the work or who pays for it.
HB2330, contrary to some comments IS consumer oriented. And yes, God forbid that collision repair shops should be able to charge a fair labor rate without being told by an insurer that “you’re not being competitive”. Hopefully, Illinois legislators will see the value of HB2330 and insist upon passage.
You grasp the problem. Even under the best conditions and parts available, pre-loss condition is not possible.
When a well-trained collision professional is allowed to do their job without interference, the results are a safe, reliable,good looking vehicle…which retains much of its value.
I have a brother in the business which always ask the same question before he does a repair…”Do you want a high quality repair, or do you want it fast and cheap? They both will look the same when I’m finished, but they are not.”
Insurers steer heavily to my brother, guess which repair they request?
Response to posts below.
I vaguely remember, in the 80’s, watching insurers testify before congress that if the insurance industry was given the opportunity to set uo HMO’S & PPO’S (recommended providers) they would be able to lower the cost of health care in this country and also lower the cost of premiums to consumers. Let’s see now. Since the inception of these groups health care costs have skyrocketed, premiums have risen more than 3-400% above inflation and we have more malpractice (Poor Repair)lawsuits than ever. Now the insurers will tell you we need tort reform to stop the run away legal beagles, but we all know where the blame lies. Cut costs to increase profits.
Price controls can never work in a free market place. Competition on a level playing field will always keep prices in check. Insurers have destroyed health care in this country and now they are on their way to destroying the consumers right to be indemnified in the event of an auto loss.
Now, in response to Mr. Buttefuco’s post below. I belive that Elliot Spitzer might have something to say regarding the fraud in insurance in NY. Read up on it. I do not believe that it involved repair shops.
Something about bid rigging on the part of agents and insurers comes to mind.
I am partner in a family body shop that my father started in 1962. I’ve been at it since the mid 70s, and part owner since 1982. I have to say that I only wish I lived in Rep Holbrook’s district, because he would have my vote. As it is, my business is in his district, and most of my family lives in it, and he earned all of their votes with this bill. Mr. Holbrook is a Democrat, and all of my family normally votes Republican.
We are a small shop, with only my brother and I working. Our customers are gained through word of mouth, and we keep them by doing the best possible work … always. Over the past several years, with the introduction of “direct shops” by the insurance industry, we have heard stories from several of our best customers about how they felt forced into going to another shop. When my wife wrecked our car not too long ago, I had her call in the claim and told her act as if she didn’t know what to do next. The insurance company first told her that she could drive to their claim office for an estimate. They’ve closed many of their claims offices which left us with a 45 minute drive to get to the only one left in the area. The second option was to take it to a “direct repair facility.” When she asked if she could get the estimate at one of those places, and then take it where she wanted, they of course said no. There was no other option given until she told them I own an auto body shop and I will be doing the repair. Then, and only then, did they tell her they could send an adjuster out. This is one of the largest insurance companies … It used to be the best for us to deal with.
Another company tried to convince my daughter to take her wrecked car to another shop. It was already at my place but they were perfectly ready to tow it.
I have seen statements in the local paper by another one of the biggest insurance companies, explaining how they do not direct business. I cannot say why because I am not interested in being sued, but suffice it to say that in the thirty years I’ve been doing body work, I have done only five or six jobs for customers with that large insurance company. One of those jobs was to repair poor work done at a shop that a regular customer of ours felt he was directed to. The repair of the shoddy work actually ended up costing more than our original estimate.
For the record … We charge the going labor rate which is a rate arrived at by State Farm in a survey they do every year. As far as I know, we have never charged more than that going rate. We are also a quality shop. We are probably pickier about our customer’s cars than they are, and nothing leaves unless it is right. We rarely ever get a job back for rework and we have had our work featured on the covers of a couple of magazines. I say that as a matter of perspective … not as bragging.
I hope this bill becomes law. If it doesn’t, I’m not sure how much longer our business will survive. Business has never been as bad as it is now. I remind everyone that we in the body shop business work for our customers … not for the insurance industry … and you should expect nothing less.
I, as an Illinois consumer of auto insurance, should have the right and freedom to choose whom ever I desire to fix my damaged vehicle. Naturally the shop of my choice must be properly licensed etc. to operate in Il. If my repairer meets or exceeds my expectations of returning my vehicle to as close to pre loss codition as possible, I will refer them to others since I recieved that which I had contracted and paid for.
If the costs of first rate repairs may have been more than my insurance company wanted to pay,so be it. They may have to adjust their rates to remain competitive in a truely free market place. If I am pleased with the service of my insurance company I will refer them to others.
I find myself asking,”What would the down side be for my insurance company if they met or exceeded my expectations and their contractual obligations with out stealing my rights in the process?” I only ask that my rights be preserved and that I recieve that which I have contracted for and paid for, no more nor no less!
Hardly. I’ve been an independent agent for 22 years and will recommend any of the companies I represent to anyone; family, friend or stranger. I have run across companies that didn’t act in what I thought was a professional manner, and those contracts were canceled.
The subject shouldn’t be Ignorance of Policy. It should be Ignorance of Insurance. That’s the biggest problem consumers, and apparantly body shops, face. Unrealistic expectations and uninformed opinions abound.
As a NY shop owner I recently visited California. I found the labor rate in Sacremento between $67-72 per hour. Insurers regularly pay these amounts DRP or not. There is no heating cost. No winter. Realestate cost comparably in the areas is similar. Property Taxes are 60% less than NY. Even paint rates are $30 plus right on the Ins appraisal. A top bodyperson is paid about 25-30/hourly or the flat rate system is used plus benifits. As I looked at it I saw no concrete reason why the rate was different than other areas. Other than that the shops get their 5% raise every year and don’t sit around and wait for Snake Farm to give them one. One shop I visited/talked to said even at that rate they are only making 5% net at best. WHAT ARE THE REST OF YOU THINKING???????????? This bill would be great but what you really need is to cut the IV and grow balls. Over the weekend every shop in the counrty should go buy a magic marker. Big and Black. Change you hourly rate to what you need and STOP accepting what they give you. Monday morning accross the counrty we oepn our doors to $75-$100 per hour. Let the totals be totals. Fix the ones you get. Do the job right from start to finish and bill the job out line by line. Repeat after me…… Monday morning I will open my shop with MY POSTED labor rate………….If we did it we would not need anybody. STOP SELLING YOURSELVES FOR PEANUTS. YOUR ARE CRAFTSMEN, ACT LIKE IT FOOLS!!!!!!!!!!!!
i am a auto body tech.personaly the industry has been dicctated to long enough as to price we get.the customer and we want quality yet for people like allstate they want the cheapest route possible.the insured doesnt actualy save anything.they just dont get a quality repair.you get what you pay for.
Collision shops, owners and workers are not slaves, remember Lincoln freed them in 1765! They are for the most, nice people, who try to work and co-exist. That’s the way its been for the 40 years that I’ve seen it and I know its been that way forever. Insurers and I mean all of them can and do make money by the bucket and then they say it, “was a good year.” If they lose money, they ask the State Insurance Departments for more to “increase reserves.” Imagine if a body shop could raise our rates based on whether our bank account was low or if we didn’t have enough to secure the guarantees we made to our customers?
Response to W.B. A business cannot exist if they cannot annualize their expenses. Repeat that ten times!!!!!! Every day and live by it! We should not wait for them to give us a raise.
This bill has background every person who it effects must admit and understand. It’s a cry for heeeeeeeeelp! Even the precious DRP shops are crying!!!! They are being steered against…OH MY GOD!!!! Them too!! All the bill will mean is that Body Shops will begin to be able to finally pay income taxes on their well-deserved hard earned missing profits. Their employees will enjoy a vacation to the Bahamas like some of the insurance agents (you know the ones….like for selling more Progressive policies) and have actual family benefits packages and yes even a 401K. The shops may even get some nice offices with 3″ thick 9′ tall oak doors and real paintings or even numbered prints at least, on the walls next to their mahogany or teak desks. The shop owners will even get a rent check every single month and finally claim a “return on their investment.” Yes the insurers will make a little less but then they are making way too much already. This should be called the “re-claim-a-tion bill.”
Insurers will just have to send a little bit more to their reinsurance company not build another skyscraper. I travel to many big cities as an expert witness, NY, Columbus, Phily, Atlanta, SanFran, Chicago, Charlotte. Miami and Dallas….and I have yet to see a Body Shop or a group of body shops that were even near the clouds threatening the approach to the Airport!!!!!!!!!!!!! Unlike most insurance companies. Building built out of the sweat they stole from insureds and collision shops. If you ever get to Columbus check out the Nationwide towers. Point made!
Wake up!! This response should go in the Reagan Library and every Collision magazine in the country because it predicts the future. The insurance industry is so dumb! They are really MBA dummies! Insurance Companies I know you’re out there,,,,,listen up. As you run the independent body shops out of business by fleecing them (I’ll be nice) and the public, there will be a price. The manufacturers will step in. Take a peak at what “Aluminum Cars” are costing you. You will be paying $125-200 per hour to fix them. The bench-fixtures you never wanted to pay a quality minded shop before, will cost you. They will cost you $2000 per car. That’s just a use charge. Total losses will not be your way out of it, because these cars are $50-150,000 a copy. I know there aren’t many now………. but wait. Aluminum is more abundant than steel and so much liter. (the gas thing) so it’s just matter of time. Enjoy it while you can. Keep promoting aftermarket junk and promoting stolen cars for salvage parts. I don’t expect you will implode but you will kick yourself.
The current system of waiting for State Farm to take a fraudulent survey is bizarre, accepting whatever the insurer is willing to pay and prescribe. SF takes a survey of the shops that accept their rates. HOW DO YOU EXPECT THAT TO WORK?? It DOESN’T. I think shops are starting to realize they need to charge more and real quick.
Reminder!!!!! Its ok to post the rate you really need to make a reasonable profit. They can still take any offer they want but “Change-the-Sign” If mechanical shops can get $75-90 per hour body shops should at least be, $85-100/hr for a well equip shop at minimum. Dealers listen up—-set the rates the same for both departments. Insurers can raise your garage liability insurance “at will” and do! Then turn around and refuse to negotiate repairs and fix the rates @ about $40 per hour. That’s crazy!
BodyShops you want change don’t wait for the bill to go through. Start with your sign!!! Buy A Marker!
I don’t know where the author of this article got the notion that insurance companies waive their right to the estimating process, but that couldn’t be further from the truth. Insurance companies take every opportunity to cut back on repair estimates and never give the shop free reign over a repair. The shops are not asking for MORE than what it takes to repair a vehicle to pre-loss condition…they just want to use good parts and be paid the rates that are posted in their respective shops. Instead many insurance companies (not all) will only pay for used or aftermarket parts regardless of condition, quality or fit and insist they cannot pay any more than the labor rates their company has approved – whether they are less than the shops going rate or not.
The body shops would not have to resort to such laws as this if the insurance companies did not steer the customers to their shops. We need to get back to marketing 101. If you do great work at a great price and in a timily manner you win. This bill is just a result of the insurance companies bulling customers and shops.
The following Quotes from the article show how foolish the statements are.
“It’s common practice to prohibit insurers from requiring that a specific repair be made at a specific repair facility,” LaCost said.
In actual practice, many insurance companies do, in fact, strongly “suggest” that a specific repair be made at a specific repair facility with the implication that if you go against their suggestion, you will have many problems. This is intimidation at its very least.
“If they choose a shop their insurer recognizes as reputable, the insurer generally waives its own estimation process and allows the consumer to go directly to the shop.”
This shop is usually chosen for its low cost not quality repairs, as they would imply.
The insurance assosications are preaching that the cost of insurance would be skyrocketing. They already are doing that but this bill dose not have a bearing on what those skyrocketing costs are about.
All anyone needs to do is take a look at the profit being reported by the casualyt companies and they will see why the insurers want to kill this bill. There motivation is all about control to protect their profits.
The Illinois consumers are paying higher prices everyday and they are receiving less for their insurance dollars. The insurers are omitting repairs that the consumers deserve, when their vehicles are repaired. The consumer will be driving their vehicles and paying for them for an average of about 5 years. When the low dollar repair don’t go the distance who is being affected? The insurer is usually out of the picture and the comsumer is paying for unnecessary maimtaince out of their own pockets.
The legisators need to take a good look at the fox that is trying to be the hen house guard. The introduction of HB2330 is one that truley serves the consumers by giving them the comfort of knowing who fixed their car and that the person they know and trust will be there to help them. Most important is why would the insurers say it would cost the consumer more, they are not profiting from their collision. They were deserve to get paid to compensate their loss, which is why they pay the insurance companies outrageous premiums in the first place.
Let’s see, who might benefit from this bill.
Insurance companies? Certainly not.
Consumers? Maybe, but since repairs are usually guaranteed by the insurance company and/or the body shop, what’s the need?
Auto body shops? Bingo!
I would guess the bill was proposed at the behest of the auto repair industry. If, however, it was in fact proposed as a consumer protection measure, it is probably aimed at nonstandard insurers that steer work to shops that do sustandard work on the cheap. Unfortunately, it’s difficult to carve out the bad guys, so everyone is going to end up getting hurt.
For some perspective, can you imagine what would happen to health care costs, including insurance premiums, if health insurers were forced to pay whatever any doctor wanted to charge.
Out of curiosity, does anyone who posted previous to me work for, or represent as an agent/broker, reputable auto insurance compaies?
Gee, that’s a novel approach. Imagine a business being able to set its own sell price. And a customer who is satisfied and willing to pay it. So who’s unhappy? Just the middleman who is trying to take a bite out of both! Phooey on them!!!
The insurer doesn’t recognize a shop as being “reputable” It only recognizes them as doing the job for a LOW PRICE. Sometimes forcing the shop to use lower quality parts and perhaps taking short cuts to save time and labor expenses.
As for being out of line with the rest of the country. They should really check out the laws in other states.
I’m happy to see that something is being done to help the repair industry. For too long insurers have been dictating what they will and will not pay and steering work to their preferred shops who will agree to use inferior parts or whatever the insurance company demands.
When the insurance companies can come into a shop and tell you what their percentages will be on new glass pricing before the glass shop even knows what the prices will even be, who’s the bully here?
Two major insurance companies in my area have cut my business by nearly 100% by steering because I refuse to agree to use parts they dictate because I believe it is cheating the consumer. I have confronted one of the insurance adjustors about it. He admitted that it was wrong, but his bosses said they had to have their percentages and he had to work somewhere. If anything drives prices up it will be the insurance industry’s greed!
They have been caught in fraud in courts all over the country and have paid huge sums of money in suits, but claim no wrong doing. They have the money to drag it through the courts for years before they pay.
If the insurance companys would take full responsibility for inferior work and parts done and used by a recommended shop then their current system might be good for the consumer. The problem is that they make the network sign a contract that absolves the insurer from any problems with the repair and then the network makes the repair shop sign a contract that absolves them from liability for problems with repair. The poor consumer is then subject to all the problems with no place to turn except the repaior shop recommended and verbally forced on them by the network.
Since the insurer does not want to take responsibility for this then they should not have the right to choose.
Is this really the Insurance Journal? All but one of the comments appear to be from body shop owners.
Since when is it OK for one Industry to control Another? What this law would do for those who speak small town English, it allows the OWNER of the Vehicle to once again have a say who repairs their vehicle, and at what cost, the Insurance industry doesn’t own these cars so why are they the ones to say what the cost will be, they have everyone doing their job but they gain the profit from it!
Pass the law, give the repair back to the Insured and watch the Economy grow!
When a body shop is in any type of a deal with an insurance coompany agreeing to take a LITTLE less profit in return for the increased volume of work, does the shop do it in the interest of the insured or its own interest? Any compromise that’s made that takes away from the insured is fraud unless the shop is willing to fill the gap on needed repairs.
I don’t know anyone who’s willing to do that and work for less, so the shop commits fraud as well.
The way trial lawyers are looking at insurers in their fraud may also start looking at the shops that work for them.
Imagine, a good trial lawyer asking a shop,”What is your deal?” The words out of their mouths could be their demise.
Sure insurers have the right to control their cost of repairs to damaged vehicles…but not to conspire to limit and subvert their contract for their own financial gain.
This bill would make insurance carriers responsible for their practices and actions, something which seems to be quite vexing to the insurance lobby.
They have the right to repair the car themselves to limit their cost… something they do not want to acknowledge, the status quo has been to profitable.
Read the upcoming McGuire article in March Bodyshop Business… the cat is out of the bag and look for this bill to become a national template.
Financial gain? I’m curious how an insurance company gains financially when they’re writing the check.
While I’m on the subject, how is the insurance company a profit taking middleman that is taking a “bite” (see a previous post) out of both sides. Again, they’re expending funds. Only two entities make out in any way, the body shop and the insured. And the insured is just being put back to about where they were before the damage.
I know the owners of a number of body shops. All but one is willing take a little less profit in return for the increased volume of work that can come from a working partnership with a quality insurance company.
Please,please,please…would someone get a bill like this to Texas before it is to late!!!
I used to own a body shop in Long Island, and this would be a great law to pass. I would be rolling in $$. I can tell by the bad spelling that most of the posters own body shops too! Wow, you guys can actually werk a computer?
Consumers? Maybe, but since repairs are usually guaranteed by the insurance company and/or the body shop, what’s the need?
Consumers? Bingo
What’s happening now is vehicles are not being repaired to pre-loss condition which means to factory tolerances. Many consumers are driving unsafe cars and they don’t know it or won’t know it until they are in a second accident. What good is a guarantee if you are dead?
Consumers? Maybe, but since repairs are usually guaranteed by the insurance company and/or the body shop, what’s the need?
Consumers? Bingo
What’s happening now is vehicles are not being repaired to pre-loss condition which means to factory tolerances. Many consumers are driving unsafe cars and they don’t know it or won’t know it until they are in a second accident. What good is a guarantee if you are dead?
I used to own a body shop in Long Island, and this would be a great law to pass. I would be rolling in $$. I can tell by the bad spelling that most of the posters own body shops too! Wow, you guys can actually werk a computer?
Just look at the labor rate difference between a dealership’s mechanical shop and what insurance companies want to pay the body shop located in the same building. Customers subject to a free market are willing to pay double what insurers are willing to pay in their mafia style racketeering scheme they call Direct Repair Programs. Then you poor insurance agents have to deal with a pissed off customer because their insurance company won’t pay for a proper repair.
Body shops are steering customers away from the scoundrel insurance companies by the millions by educating their customers about which insurance companies play fair. You agents need to exert some of your power and get the big daddy insurance companies to ease up on the body shops.
In response to Mr. Plapp.
Are you saying that the insurance industry is not improving their profits by steering the customer to a prefered shop?
Less expense = more profit….simple business.
You say the insured is being put back to ABOUT where they were before. Is it not suppose to be “preloss condition”? not “close to preloss condition”
This whole situation is taking place in the Auto Glass Replacement industry also.
“Working with insurace company” for a increase in volume means:
Repairing vehicles per guidelines created by the insurer to reduce cost, through elimination of needed procedures, limitations or “caps” on materials and allocation of used or reproduction body parts. Some “highly” regarded insurers even direct repairers to perform clipping of total losses to save them.
Of course the repairer needs to cooperate in these schemes.
The irony of this bill if you bother to read it… each practice outlined, insurers deny doing… but they scream the bill would hurt them and consumers?!?!
Yes, reduced expenses do flow to the bottom line. However, spending less isn’t the same as making money, as some previous posts seem to suggest.
Very few autos that have been wrecked are ever the same after repairs as they were before the accident. I don’t care who does the work or who pays for it.
HB2330, contrary to some comments IS consumer oriented. And yes, God forbid that collision repair shops should be able to charge a fair labor rate without being told by an insurer that “you’re not being competitive”. Hopefully, Illinois legislators will see the value of HB2330 and insist upon passage.
You grasp the problem. Even under the best conditions and parts available, pre-loss condition is not possible.
When a well-trained collision professional is allowed to do their job without interference, the results are a safe, reliable,good looking vehicle…which retains much of its value.
I have a brother in the business which always ask the same question before he does a repair…”Do you want a high quality repair, or do you want it fast and cheap? They both will look the same when I’m finished, but they are not.”
Insurers steer heavily to my brother, guess which repair they request?
Response to posts below.
I vaguely remember, in the 80’s, watching insurers testify before congress that if the insurance industry was given the opportunity to set uo HMO’S & PPO’S (recommended providers) they would be able to lower the cost of health care in this country and also lower the cost of premiums to consumers. Let’s see now. Since the inception of these groups health care costs have skyrocketed, premiums have risen more than 3-400% above inflation and we have more malpractice (Poor Repair)lawsuits than ever. Now the insurers will tell you we need tort reform to stop the run away legal beagles, but we all know where the blame lies. Cut costs to increase profits.
Price controls can never work in a free market place. Competition on a level playing field will always keep prices in check. Insurers have destroyed health care in this country and now they are on their way to destroying the consumers right to be indemnified in the event of an auto loss.
Now, in response to Mr. Buttefuco’s post below. I belive that Elliot Spitzer might have something to say regarding the fraud in insurance in NY. Read up on it. I do not believe that it involved repair shops.
Something about bid rigging on the part of agents and insurers comes to mind.
So when did “steering” by insurance companies become “free speech” rather then interferance?
As a consumer, I doubt I find the value in taking repair advice from the guy that must pay for it!
I am partner in a family body shop that my father started in 1962. I’ve been at it since the mid 70s, and part owner since 1982. I have to say that I only wish I lived in Rep Holbrook’s district, because he would have my vote. As it is, my business is in his district, and most of my family lives in it, and he earned all of their votes with this bill. Mr. Holbrook is a Democrat, and all of my family normally votes Republican.
We are a small shop, with only my brother and I working. Our customers are gained through word of mouth, and we keep them by doing the best possible work … always. Over the past several years, with the introduction of “direct shops” by the insurance industry, we have heard stories from several of our best customers about how they felt forced into going to another shop. When my wife wrecked our car not too long ago, I had her call in the claim and told her act as if she didn’t know what to do next. The insurance company first told her that she could drive to their claim office for an estimate. They’ve closed many of their claims offices which left us with a 45 minute drive to get to the only one left in the area. The second option was to take it to a “direct repair facility.” When she asked if she could get the estimate at one of those places, and then take it where she wanted, they of course said no. There was no other option given until she told them I own an auto body shop and I will be doing the repair. Then, and only then, did they tell her they could send an adjuster out. This is one of the largest insurance companies … It used to be the best for us to deal with.
Another company tried to convince my daughter to take her wrecked car to another shop. It was already at my place but they were perfectly ready to tow it.
I have seen statements in the local paper by another one of the biggest insurance companies, explaining how they do not direct business. I cannot say why because I am not interested in being sued, but suffice it to say that in the thirty years I’ve been doing body work, I have done only five or six jobs for customers with that large insurance company. One of those jobs was to repair poor work done at a shop that a regular customer of ours felt he was directed to. The repair of the shoddy work actually ended up costing more than our original estimate.
For the record … We charge the going labor rate which is a rate arrived at by State Farm in a survey they do every year. As far as I know, we have never charged more than that going rate. We are also a quality shop. We are probably pickier about our customer’s cars than they are, and nothing leaves unless it is right. We rarely ever get a job back for rework and we have had our work featured on the covers of a couple of magazines. I say that as a matter of perspective … not as bragging.
I hope this bill becomes law. If it doesn’t, I’m not sure how much longer our business will survive. Business has never been as bad as it is now. I remind everyone that we in the body shop business work for our customers … not for the insurance industry … and you should expect nothing less.
I, as an Illinois consumer of auto insurance, should have the right and freedom to choose whom ever I desire to fix my damaged vehicle. Naturally the shop of my choice must be properly licensed etc. to operate in Il. If my repairer meets or exceeds my expectations of returning my vehicle to as close to pre loss codition as possible, I will refer them to others since I recieved that which I had contracted and paid for.
If the costs of first rate repairs may have been more than my insurance company wanted to pay,so be it. They may have to adjust their rates to remain competitive in a truely free market place. If I am pleased with the service of my insurance company I will refer them to others.
I find myself asking,”What would the down side be for my insurance company if they met or exceeded my expectations and their contractual obligations with out stealing my rights in the process?” I only ask that my rights be preserved and that I recieve that which I have contracted for and paid for, no more nor no less!
An Illinois citizen, John.
Scott:
I have yet to see a “quality insurance company” are you in never-never land?
Hardly. I’ve been an independent agent for 22 years and will recommend any of the companies I represent to anyone; family, friend or stranger. I have run across companies that didn’t act in what I thought was a professional manner, and those contracts were canceled.
The subject shouldn’t be Ignorance of Policy. It should be Ignorance of Insurance. That’s the biggest problem consumers, and apparantly body shops, face. Unrealistic expectations and uninformed opinions abound.
Tom, after reading your post, I must say I agree, State Farm does suck!
As a NY shop owner I recently visited California. I found the labor rate in Sacremento between $67-72 per hour. Insurers regularly pay these amounts DRP or not. There is no heating cost. No winter. Realestate cost comparably in the areas is similar. Property Taxes are 60% less than NY. Even paint rates are $30 plus right on the Ins appraisal. A top bodyperson is paid about 25-30/hourly or the flat rate system is used plus benifits. As I looked at it I saw no concrete reason why the rate was different than other areas. Other than that the shops get their 5% raise every year and don’t sit around and wait for Snake Farm to give them one. One shop I visited/talked to said even at that rate they are only making 5% net at best. WHAT ARE THE REST OF YOU THINKING???????????? This bill would be great but what you really need is to cut the IV and grow balls. Over the weekend every shop in the counrty should go buy a magic marker. Big and Black. Change you hourly rate to what you need and STOP accepting what they give you. Monday morning accross the counrty we oepn our doors to $75-$100 per hour. Let the totals be totals. Fix the ones you get. Do the job right from start to finish and bill the job out line by line. Repeat after me…… Monday morning I will open my shop with MY POSTED labor rate………….If we did it we would not need anybody. STOP SELLING YOURSELVES FOR PEANUTS. YOUR ARE CRAFTSMEN, ACT LIKE IT FOOLS!!!!!!!!!!!!
i am a auto body tech.personaly the industry has been dicctated to long enough as to price we get.the customer and we want quality yet for people like allstate they want the cheapest route possible.the insured doesnt actualy save anything.they just dont get a quality repair.you get what you pay for.
what about paint and materials?we havent had a increase in 3 years.still at $23.00 per refinish hour.far from enough.
Collision shops, owners and workers are not slaves, remember Lincoln freed them in 1765! They are for the most, nice people, who try to work and co-exist. That’s the way its been for the 40 years that I’ve seen it and I know its been that way forever. Insurers and I mean all of them can and do make money by the bucket and then they say it, “was a good year.” If they lose money, they ask the State Insurance Departments for more to “increase reserves.” Imagine if a body shop could raise our rates based on whether our bank account was low or if we didn’t have enough to secure the guarantees we made to our customers?
Response to W.B. A business cannot exist if they cannot annualize their expenses. Repeat that ten times!!!!!! Every day and live by it! We should not wait for them to give us a raise.
This bill has background every person who it effects must admit and understand. It’s a cry for heeeeeeeeelp! Even the precious DRP shops are crying!!!! They are being steered against…OH MY GOD!!!! Them too!! All the bill will mean is that Body Shops will begin to be able to finally pay income taxes on their well-deserved hard earned missing profits. Their employees will enjoy a vacation to the Bahamas like some of the insurance agents (you know the ones….like for selling more Progressive policies) and have actual family benefits packages and yes even a 401K. The shops may even get some nice offices with 3″ thick 9′ tall oak doors and real paintings or even numbered prints at least, on the walls next to their mahogany or teak desks. The shop owners will even get a rent check every single month and finally claim a “return on their investment.” Yes the insurers will make a little less but then they are making way too much already. This should be called the “re-claim-a-tion bill.”
Insurers will just have to send a little bit more to their reinsurance company not build another skyscraper. I travel to many big cities as an expert witness, NY, Columbus, Phily, Atlanta, SanFran, Chicago, Charlotte. Miami and Dallas….and I have yet to see a Body Shop or a group of body shops that were even near the clouds threatening the approach to the Airport!!!!!!!!!!!!! Unlike most insurance companies. Building built out of the sweat they stole from insureds and collision shops. If you ever get to Columbus check out the Nationwide towers. Point made!
Wake up!! This response should go in the Reagan Library and every Collision magazine in the country because it predicts the future. The insurance industry is so dumb! They are really MBA dummies! Insurance Companies I know you’re out there,,,,,listen up. As you run the independent body shops out of business by fleecing them (I’ll be nice) and the public, there will be a price. The manufacturers will step in. Take a peak at what “Aluminum Cars” are costing you. You will be paying $125-200 per hour to fix them. The bench-fixtures you never wanted to pay a quality minded shop before, will cost you. They will cost you $2000 per car. That’s just a use charge. Total losses will not be your way out of it, because these cars are $50-150,000 a copy. I know there aren’t many now………. but wait. Aluminum is more abundant than steel and so much liter. (the gas thing) so it’s just matter of time. Enjoy it while you can. Keep promoting aftermarket junk and promoting stolen cars for salvage parts. I don’t expect you will implode but you will kick yourself.
The current system of waiting for State Farm to take a fraudulent survey is bizarre, accepting whatever the insurer is willing to pay and prescribe. SF takes a survey of the shops that accept their rates. HOW DO YOU EXPECT THAT TO WORK?? It DOESN’T. I think shops are starting to realize they need to charge more and real quick.
Reminder!!!!! Its ok to post the rate you really need to make a reasonable profit. They can still take any offer they want but “Change-the-Sign” If mechanical shops can get $75-90 per hour body shops should at least be, $85-100/hr for a well equip shop at minimum. Dealers listen up—-set the rates the same for both departments. Insurers can raise your garage liability insurance “at will” and do! Then turn around and refuse to negotiate repairs and fix the rates @ about $40 per hour. That’s crazy!
BodyShops you want change don’t wait for the bill to go through. Start with your sign!!! Buy A Marker!
I don’t know where the author of this article got the notion that insurance companies waive their right to the estimating process, but that couldn’t be further from the truth. Insurance companies take every opportunity to cut back on repair estimates and never give the shop free reign over a repair. The shops are not asking for MORE than what it takes to repair a vehicle to pre-loss condition…they just want to use good parts and be paid the rates that are posted in their respective shops. Instead many insurance companies (not all) will only pay for used or aftermarket parts regardless of condition, quality or fit and insist they cannot pay any more than the labor rates their company has approved – whether they are less than the shops going rate or not.