Collision Repairers Drive Home the Necessity of Labor Rate Reform

by Alana Quartuccio

By the time this issue reaches publication, the Auto Body Labor Rate Advisory Board (ABLRAB) will have already made their recommendations to send in a final report to the Division of Insurance (DOI) as to what a fair and equitable labor rate should be, with the hopes of putting an end to four decades of labor rate suppression.

Collision repair professionals in the Commonwealth have invested years into making it abundantly clear how crucial this long-awaited labor rate reform is. Not only is it necessary in keeping the industry alive, but it’s essential to protecting consumers. Over the years, they rallied on Beacon Hill, called and wrote legislators all in support of the cause, finally getting a seat at the table in the form of the ABLRAB, which was established to bring all related parties together to come up with a way forward.

On October 29, collision repair professionals made their voices loud and clear for the last time, sending their message home during the Board’s final public hearing, held weeks before recommendations were to be reviewed. The in-person hearing was held at Tri-County Regional Vocational Technical High School (Franklin) – a significant location as the school’s collision repair program recently shut its doors, an all too common sign of industry downturn in the Commonwealth. 

Board member Rick Starbard (Rick’s Auto Collision; Revere) alluded to the preceding tour given of the “closed collision facility downstairs to see how much money is sitting there, how much of an investment has been made, and it’s just sitting idle.”

Starbard stressed that mechanical shops can charge $200 an hour with no pushback, but collision repairers are stunted at $45. “When I taught vocational school, I’d joke around about other programs and point to the door of the mechanical shop and say, ‘We can do what they can do, but they can’t do what we can do.’ We need to be compensated for what we do.” 

“We need a fair labor rate immediately, yesterday, 20 years ago,” insisted Denise Raimo (Annisquam Auto Body; Gloucester), pointing out how many shop owners have had to refinance their homes just to keep their businesses running. 

“The insurance industry has had their thumb on the scale for too long,” lamented Kevin Comstock (Nesco Sales; Bondsville). “A $43 labor rate doesn’t go directly to technicians. It goes to all of our expenses – salary, equipment, training. All of it. A lot has to come out of that little amount of money. No reasonable person can look at the situation objectively and not ask themselves why the system is broken and what is the cause of this inequity.” 

Don Dowling (Marblehead Collision; Marblehead) brought the Board’s attention to estimates for the exact same repair done in Massachusetts and North Dakota which revealed a huge reimbursement discrepancy. He asked the insurance representatives if they “think that someone from North Dakota is more valuable than someone from Massachusetts.”

Board member Christopher Stark (Massachusetts Insurance Federation) chimed in. “We need to look at all the statistics. It’s important that we see where we’re at on total repair costs in the state and not just labor costs.” AASP/MA Executive Director Lucky Papageorg righted Stark’s comment, stating that, “We’re here to talk about labor rates, not severity, not cycle time. We’re talking about people’s ability to make a living and to continue to move the collision industry forward.”

Auto body industry supporters also spoke up on the industry’s behalf. 

Kate Gallagher, who comes from a long line of family members who worked in the insurance industry and who has personally worked as an appraiser for an insurer and later a body shop, told the Board she was “appalled” to learn that a state like Massachusetts with such a high cost of living had the lowest labor rate in the country. “I’m deeply concerned for the future of this industry and for the lack of young people entering this trade. I’m not naive to the fact that insurance companies must make money to stay in business, but they must also be persuaded to treat consumers and small businesses fairly. I understand the bottom line, and from my perspective, the only way the insurance companies will pay a reasonable rate to auto body shops is if they are forced to do so by legislation.”

Robert O’Koniewski, general counsel and executive vice president of the Massachusetts State Auto Sales Association, called it “unconscionable that the suppressed rates basically subsidize the insurance company’s profits year after year.” 

Lorraine Wooten, an experienced automotive analyst, believes body shops should be allowed to be in a position to profit via the labor rate. She learned that GEICO ended 2023 with a $7.8 billion profit and noted that “$3 billion of that came from increases in automobile policy premiums, and the remainder was made up by loss adjustments savings they had compared to the prior year. The insurers are permitted to make a profit. The body shops should be able to not only have a living wage, but they should also be able to dial in some sort of profit to ensure their continuity and ensure for what’s going to come for the future.”

“If the Massachusetts labor rate simply kept pace with inflation over the past four decades, we would not be here today,” Papageorg asserted. “The Board can’t determine what is fair today without acknowledging what has been unfair in the past.” 

He implored the Board to review the data not through the lens of fearing that it will result in higher premiums as the “reality is that insurers will continue to raise premiums regardless in order to protect multi-million dollar profits.” 

Alluding to the $88 billion in profit the insurance industry achieved in 2023, Papageorg stressed, “We have been forced to subsidize those profits, yet there’s no sharing involved anywhere along the line.” 

He also made it clear, “If anyone believes that we’re here simply because there are fewer vehicles to repair in the shops and we’re demanding higher rates to offset the reduced volume, then insurers have succeeded once again with their propaganda. While there may be fewer claims, the complexity and repair technology involved in each repair have grown exponentially. We are technicians working on sophisticated vehicles. We want to be paid for the expertise required and the liability incurred to do those repairs. Yet, insurers continue to ignore the reality. That is why we’re here today and why this advisory board was mandated by the legislature.”

Papageorg pointed out that recent discussion at the financial services committee stated labor rates have gone up 10 to 40 percent, but even if one were to look at the high end of that range, a $56 labor rate is “still miles below the average shown across the country via National AutoBody Research which shows a national average of $81.”

He stressed that inadequate pay to the body shop businesses can jeopardize the safety of all consumers because “something has to give if you aren’t getting enough money to do the training, keep up with technology and have the right equipment.”

Stark responded, “We don’t want to have to keep doing this; we want to get this right, but as per our data from 2023, in New England, we are only off by 10 percent in total cost of repair. That is not to say that we don’t have work to do. It’s saying that we have to understand the scope of the cost.” 

He acknowledged that “no one in this room will be happy with $56 because Lucky just testified that it’s ‘miles below the national average.’ At some point, the numbers do matter as we have to justify this to our policyholders. If we are going the direction of making Massachusetts like Rhode Island, then [policyholders] can expect a 24 percent increase in their premiums.” 

“All we ask is that you look at it fairly and justly,” responded Papageorg. “Screw the premiums. It’s not about the premiums. It’s about people’s ability to own a business, to make Massachusetts strong and to have a vital industry that protects the motoring public. That’s what we do. That’s the bottom line, and there is a price to pay for that.”

The ABLRAB planned to meet November 24 to review recommendations. Updates will be reported in future issues of New England Automotive Report once details become available. 

Want more? Check out the December 2025 issue of New England Automotive Report!