What do you get when you ask the industry to list what they see as the key issues they’d like to see addressed?
The leaders and participants of the Collision Industry Conference (CIC) conducted just that exercise in recent weeks, and ended up with a list of nearly 600 issues submitted by more than 150 representatives of the collision repair, insurance and related segments of the industry.
At CIC’s “planning session” held in Phoenix in mid-January, Stacy Bartnik oversaw her first meeting as chair of the conference, leading about 200 attendees through the process of determining which of those topics CIC committees would tackle in the coming year.
Prior to the meeting, Bartnik had reviewed the results of an online survey in which any member of the industry was invited to contribute what issues they would like to see CIC address. She was able to compile those hundreds of responses into about three dozen broad categories. During the meeting in Phoenix, Bartnik showed participants those categories and some of the specific issues under each.
About one-third of those categories included issues submitted by 20 or more people. Issues pertaining to insurer control of the industry or insurance regulation were the most common, with issues ranging from insurer-owned shops to insurers dictating repair processes.
Other top categories included issues related to:
- labor rates and labor rate survey processes;
- steering of work;
- the shortage of qualified technicians;
- shrinking labor times, or perceived bias of estimating databases and systems toward insurers;
- paint times, processes and allowances/ caps;
- training;
- direct repair programs;
- parts procurement, discounts and mark-ups;
- fraud; and,
- repair standards.
Part of the Phoenix meeting was dedicated to allowing attendees to raise issues that might not already be among those submitted via the survey. Several participants, for example, expressed frustration with getting little or no response or action from their state department of insurance or other government regulators to concerns or questions pertaining to claims issues.
“In our state, we can’t seem to get them to do anything without first going through the civil court system,” Ron Reichen, owner of Precision Body & Paint in Beaverton, Ore., said of his state’s department of insurance.
Dan Risley, executive director of the Society of Collision Repair Specialists (SCRS), agreed that this is an issue he has heard from a number of association members.
“I can’t tell you the number of calls I’ve had saying, ‘We had an issue pop up in our state. We did our due diligence. We tried to contact the Department of Insurance and submitted an inquiry and we’re not getting any response. Or they say they can’t help us,’” Risley said. “So there’s a lot of questions from repairers about what they need to do in the event that they have an issue they are trying to resolve.”
Gene Hamilton, owner of the Sports & Imports collision repair shops in the Atlanta area, cited an example of often receiving the wrong amount of sales tax because an insurer computed it based on the wrong county’s tax structure.
“That makes a really good example because the Department of Insurance will say it’s a Department of Revenue issue, and that department will say it’s a problem for the Department of Insurance,” Risley said.
Tom Colo, owner of Advanced Auto Body in Athol, Mass., urged CIC to continue to examine the issue of inadequate initial estimates prepared by insurers, a topic CIC’s Anti-Fraud Committee researched last year.
“I would like to see some discussion on the use of photographs to establish judgment times,” suggested Darrell Amber-son, president of Lehman’s Garage, a six-shop collision repair business in Bloom-ington, Minn.
Amberson, who also serves as national director of the Collision Division of the Automotive Service Association (ASA), said such “desk auditing” practices now include using photos to determine, for example, whether a repair time should be two hours rather than three.
“I would question the ability to accurately do that based on a 2-dimensional photograph,” he said.
Gary Wano, owner of GW and Son Autobody in Oklahoma City, Okla., applauded CIC’s recent efforts to push for solutions to the problem of shops having to rekey insurer-prepared estimates into the shop’s estimating system. Each of the three major estimating system providers have developed systems that enable shops to download such estimates from the insurer.
“But in the state of Oklahoma, at this point it seems that unless you happen to be part of that insurers’ (direct repair program), that option is not available,” Wano said.
Boyd Dingman, owner of Dingman’s Collision Center in Omaha, Neb., said he would like to see CIC address the issue of enhanced warranties on repairs.
“I believe if both insurance companies and collision repairers are responsible for a good warranty that stays with the car (even beyond its sale to a new owner), the vehicle will be repaired better and some insurance companies won’t hold back on the repair process,” Dingman said.
Lillian Maimone, of the six-location Marco’s Auto Body in the Los Angeles area, raised several issues at CIC in Phoenix. “Short pays” by insurers to final bills are increasingly a problem, she said. She also sees a lack of consistency in claims handling processes between what an insurer’s corporate headquarters says and how field staff actually operate; such local field staff, she said, often seem to have inadequate information when changes to claims handling procedures occur, for example.
Maimone also was critical of the information providers, saying in her experience they have lacked the ability to provide the necessary training and support for repairers when making updates or other changes to their systems.
Former insurance company executive turned consultant Mike Condon suggested that the industry lacks “modern feedback mechanisms” such as a web-based way for buyers to post comments about the efficiency or quality of shops, suppliers and other companies involved in the industry.
Los Angeles-based industry trainer Toby Chess was among those to urge CIC to consider the issue of certification or licensing in the industry. Chess raised the topic of appraiser licensing, while others at the meeting discussed shop or technician licensing or standards.
All of the issues raised at the meeting were added to those submitted previously on the survey. CIC participants in Phoenix then further compiled the issues into about a dozen categories that will form the basis for CIC committees in 2007.
An “Insurance Relations Committee,” for example, will choose from among a wide range of issues related to how shops and insurers interact.
Other committees formed but not named during the meeting in Phoenix are those addressing issues related to:
- fraud and ethics;
- vehicle design for repairability, and the rise in total losses;
- human resource compliance issues;
- fair commerce and trade practices (including the topics of steering and consumer disclosure);
- legislation and government (including the topics of licensing and repeal of the McCarran-Ferguson insurer anti-trust exclusion);
- parts (including quality, availability and insurer procurement);
- training and the technician shortage;
- repair and other industry standards; and,
- the information providers (including the topics of perceived bias, shrinking times, time studies, etc.).
John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988. He can be contacted by email at jyoswick@SpiritOne.com.
John Yoswick