by Evangelos “Lucky” Papageorg
Summertime is typically a time of year folks look forward to. For most, it is a time to kick back, relax and enjoy. For those of us in the collision repair business, it is a time of year that can be a bit unsettling and worrisome, especially after a winter that was unusually low in snowfall totals and other foul weather that typically leads to an increase in collision losses.
When we come out of a winter which leads to a shorter backlog of work and future appointments, we have the tendency to change up what we have been doing in our business, but not always in a good way. What do you have planned for your shop in the next few months? Here are a few suggestions that could prove to be very beneficial and help you set the foundation for great success in the future.
Just as important as catching your breath when there’s a bit of a lull is using the “downtime” for some quality self-assessment to strategically prepare your business for greater success in the future. First on your list should be an assessment of the items we tend to complain about the most (and have the absolute power to change), but tend to fear the most to actually take action to correct. This statement does NOT apply to everyone. Obviously, this is a matter of the rates each shop chooses to charge for the work they perform and based on one’s own business expenses. As mentioned, this does not apply to everyone because more and more shops have been evaluating the effects of the historic rise in CPI we have experienced and have started adjusting their rates accordingly. These same shops have made the independent business decision, when insurance appraisers fail to negotiate based upon that individual shop’s posted labor rates, to charge the vehicle owner a copay, representing the failure of their insurer to fully indemnify them by covering the full cost of repairs.
Day in and day out, shops have been proving to themselves that they can get paid fairly and properly for the work they perform. Through an educational discussion with their customers, they know they can justify why a copay has become necessary. They prove to themselves that their customers understand and are willing to pay for a quality repair, even if their insurer will not cover the full cost. These same customers, armed with the knowledge provided to them by their shops, are successful in obtaining reimbursement from their own or the third-party insurer in many instances. Consider using the “summer lull” to fine-tune your salesmanship and that of your staff to promote safe professional repairs performed by well-trained and equipped technicians versus having your customers be steered to a shop that has elected to sign a contract potentially giving away some of the customer’s rights to the insurer regarding the cost of safe repairs. You may even want to suggest that the customer obtain a copy of the contract the insurer’s “partner shop” has signed. It’s all there in black and white. If the insurer refuses to share the information, it will be another reason for the vehicle owner to be suspect of the reason they are being steered in a particular direction.
Once you have evaluated your true cost of doing business and posted your labor rates accordingly and are writing your blueprints/repair plans at those rates, it is time to take the labor rate survey at laborratehero.com. It is important that you update your survey regularly, even if you have not increased rates in any of the categories so the survey results will be freshly dated. The survey is critical as this is just one of the very many important tools the “Alliance” is utilizing when speaking with our legislators. The survey information, along with BillableGenie data being accumulated by National AutoBody Research are, as the Mastercard advertisement says, “Priceless.” Part of your summertime project should include learning how to use this information, as countless shops are doing, to get paid properly for procedures and rates they are able to prove insurance companies have and continue to pay. Nothing seems to enrage vehicle owners more than when it is pointed out to them in black and white that their insurance company seems to be discriminating against them by paying some claimants but not them for the same procedures and rate reimbursement. Some insurers will say that it is on a case-by-case basis, but make them prove to your customer WHY this isn’t one of those cases. At the very least, it will prove that it is not you who is being unfair and unreasonable. This justifies the need for a copay from the vehicle owner. It is based on the insurer not indemnifying the vehicle owner completely based on the policy sold and purchased. Some may consider this an absolute breach of contract and potentially an unfair claims handling practice subject to the 93A and 176D triple damages penalties.
If you have attended either part one or part two of the Alliance’s “Breaking Free in ’23” events, the “lull” may be a great time to revisit the videos and documents provided via thumb drive to digest the abundance of information provided. The information and support provided have helped many shops set the tone for their future and their individual repair and billing practices. Part one helped explain some of the transitional growing pains experienced when “flicking the switch” and realizing that in order to thrive by providing quality repairs performed by well-equipped and trained technicians, a collision repair shop can no longer subsidize the process by absorbing “short pays” by the insurance company. As the experts in the repair process and the shoulders on which the ultimate liability falls should something minor or catastrophic occur after the repair, shops are realizing someone must pay; if not the insurance company, then it must be the vehicle owner. It is then the vehicle owner’s responsibility to pursue the issue with their insurer.
Kudos to those shops who have not listened to “it will never work,” “I cannot charge vehicle owners in my area more than what the insurer is willing to pay” or “I won’t have any vehicles in my shop to repair.” These shops that are well informed are finding it easier to draw quality technicians from a pool of talent that is getting shallower by the day. They are finding they DO NOT have to work at such a frenetic and disorganized pace, frustrating and burning out their technicians, while at the same time potentially sacrificing repair quality and thus bringing even more liability to their doorstep.
For members of the “ALLIANCE,” please refer to the June issue of the Damage Report newsletter for additional ideas on how to best use the next few months to implement “Breaking Free in ’23.” If you are not a member and are ready to “flick the switch,” there is a membership application on page 7 or online at aaspma.org.
It will only take a couple of minutes out of your summer to fill it out. You will then be a part of the “ALLIANCE,” which has NO plans to take the summer off when it comes to “protecting consumers and the collision repair industry.”
Want more? Check out the July 2023 issue of New England Automotive Report!