by Matthew Ciaschini
My brother, Zac, and I have been in the collision repair business for over 14 years. When I started out at Full Tilt Auto Body & Collision, I was not aware of the control the insurance industry has over shops, consumers and most importantly, rates that affect both parties.
I was admittedly naive to the insurance industry and thought as many consumers do: “Auto body shops just fix the cars and bill the insurance companies, right?” It didn’t take me long to figure out that the labor rates were suppressed and the ability to negotiate them seemed impossible.
Our shop currently participates in one referral program, which allows us to do supplements without waiting for an appraiser to come out. Although we have maintained this one relationship for several years, Zac and I, along with our staff, struggle daily over the decision of whether or not to continue this relationship. The inherent problem is that we know we are contributing to suppressing the rates. The contract which every insurer puts forth in these referral agreements forces US to only take the rate they offer. By accepting this rate with albeit only one insurer, I am part of the problem – setting a suppressed rate.
This is why I never judge any shop owner for their personal business decisions, and AASP/MA will always represent all collision repairers, despite which side of the aisle they sit on. This is an extremely important tenet in the mission statement of the “Alliance” because there has never been a more important time for the collision industry to unite in the face of the rising costs due to inflation while continuing to be reimbursed at a suppressed labor rate.
Instead of wasting time and energy judging others in our industry, we should be directing that energy and time toward examining ourselves, our business practices and decisions, and then truly analyzing how we can best improve things for consumers, ourselves and the industry as a whole. We can also direct energy outward toward our customers and become educators by letting them know about the inequity in the rates while still providing exceptional customer service and repair. We can never sacrifice the quality of repair or the customer experience because we are forced to work at a suppressed labor rate.
Many shops have decided to take back their business and charge their customers a “co-pay” much like we are accustomed to when dealing with the medical industry. Most of us do not think twice when we receive a bill for something our medical policy didn’t cover. We just pay the bill. Some of us call and complain or attempt to get an explanation for why things may not be covered but often fall short and accept the bill. Why is the collision repair industry so different? It may soon not be.
This month, AASP/MA will present a seminar designed to educate shop owners, managers and appraisers on many topics, one of which will involve a discussion about when a “co-pay” might be necessary and the best ways to educate customers on the additional cost. All topics discussed will relate to how to take back your business from insurer domination and help your business start to thrive again.
We can take back our industry!
Want more? Check out the November 2022 issue of New England Automotive Report!