Their Numbers Just Don’t Add Up

by Evangelos “Lucky” Papageorg, AASP/MA Executive Director

Just about everything that we are concerned about in this day and age is based on numbers.

For a diabetic, the question is the A1C number reading at the next doctor’s visit. During that same visit, your doctor may say you’re making improvements, but you must work to lower your body mass index (BMI) number. Soon, we will be submitting this year’s tax returns, hoping to lower our tax exposure and retain our hard-earned income. With regard to taxes, many in the collision repair industry will find that they have once again seen an erosion of their return on investment (ROI) number. Those who have neglected to keep up in the industry – by not spending money on training, new equipment and paying their body men adequately – will certainly see that erosion, but their experience will not be nearly as shocking as it will be for those who have strived to maintain a high level of safe and quality repairs on today’s vehicles by making those investments.

Then we have the insurance industry which continues to demand increases in their ROI by increasing premiums to their insureds by double digit percentages. They go through the “process” (merely a show) of petitioning their individual states’ rate-setting authority for approval while professing that they are doing everything they can do to control costs, particularly in the area of collision repair. This premium rate-setting process has been allowed to continue unchecked year after year, all while insurance companies report record-breaking profits; Progressive, Travelers and Allstate reported net profits of $1.9, $1.6 and $1.5 billion (respectively) in the last quarter of 2023 alone! A simple online search for any insurer’s “earnings release” reveals just how much they have lined their pockets with vehicle owners’ hard-earned cash…Their numbers just don’t add up! When will their lack of scruples and corporate greed stop?

As an informed consumer, I reviewed my own auto insurance policy and found some very questionable issues when looking at how my total premium was broken down. We are all familiar with the different parts of the policy (which I believe, based on the trust I have in my own insurance agent, has me well covered should I ever need to submit a claim). I am fortunate because I am rated as a step 99, so I am getting the best possible discount based on my driving experience. That being said, I still feel that I am paying an exorbitant amount for protection in case of a loss. Approximately 20 percent of my total premium is collision coverage, and approximately seven percent is for comprehensive coverage. The remaining 73 percent of the dollars are to cover medical and legal damage to someone else’s property and for substitute transportation and transportation protection afforded me by my coverage.

What amazes me is that, year after year, when the collision repair industry seeks measures to increase the reimbursement rate to the consumer to cover the collision repairs to their damaged vehicle, insurers wave their “we will have to raise insurance premiums” banner. Again, this is where the numbers just don’t add up! When insurers wave this banner, it beckons the question, WHY? Why is labor reimbursement used as the tool to oppress an entire industry? What is the justification? As repairers, all we have to do is look at our own insurance policies and then look at a final bill to one of our customers, and we will see there is NO justification. As demonstrated by looking at my own policy, a very small amount of our premium actually applies to collision coverage; now, take a look at any final repair bill, and you’ll see the bulk of the expense is related to parts, materials, sublets…NOT the shop’s labor, which is usually the smallest portion of a shop’s invoice. So, how could increasing that number to a fair amount possibly have such a large impact on premiums, as carriers want everyone to believe?

Because the numbers just don’t add up, there are more collision repairers who have realized that the only way to “Get More in ‘24” is to “Break Free” from the misconception that the rate of reimbursement any insurer is willing to pay is what a shop’s labor rate is equivalent to. NOTHING could be further from the truth! The TRUTH is collision repairers have allowed insurers to control the narrative for far too long. Shops across Massachusetts and the country have made the decision that someone is going to pay the true costs associated with repairing today’s vehicles and accept the huge responsibility associated with doing so. More vehicle owners are reporting that they have had to pay out-of-pocket costs their insurers have refused to indemnify. WHY? It is because some shops have taken the time to explain to their customers what their insurance company is really doing to them. When a shop takes the time to explain that insurers would rather take the chance that a vehicle will be repaired in a faulty manner by using aftermarket parts by a shop that has entered into a contract driven by insurance-controlled rates and NOT the shop’s technical abilities and equipment, the shop finds that they will not only keep that customer but will also improve their chances of collecting proper reimbursement. 

Those shop’s customers are also typically successful in getting reimbursed by their insurance company. Although this is not a guarantee and is highly dependent on the vehicle owner’s persistence, there are a few things which are guaranteed: 1) A shop which has kept up with training and equipment is going to be making proper repairs. 2) A shop which is doing proper repairs does not have to keep looking over their shoulder concerned about past repairs and can focus on the future. 3) A shop which is charging a vehicle owner a copay (balance billing) is going to be able to continue to keep pace with the changing technology and afford to pay to entice quality technicians to their facilities. 4) A shop which educates their customers will make customers for life and will receive multiple recommendations from those customers. 5) A shop which is able to maintain a fair and reasonable ROI will be a shop of the future. 6) If you are not one of the shops which are doing number one through five, your numbers will never add up!

If you are unsure how to proceed or just want to improve upon the advancements you have already made, be sure to join us for our upcoming series of chapter meetings to be held all across the state and culminating with a great General Membership Meeting in June, the focus of which will be “Knowing Your Numbers” and “Getting More in ‘24.” Keep an eye out for our chapter meeting notices and for your invitation to join us on June 22 for an informative presentation by national and international motivational and educational speaker, David Luehr of Elite Body Shop Solutions (see page 10 for more information on the June meeting). 

Attending, and becoming a member of the ALLiance will go a long way to making sure your numbers do add up! See our application on page 7, or go to and click on the JOIN/RENEW NOW button.

Want more? Check out the April 2024 issue of New England Automotive Report!