by Burl Richards, ABAT President
Back in August, the Texas Insurance Commissioner issued a cease-and-desist order against Go/Peachtree Insurance stating the insurer “presents an immediate danger to the public if it does not immediately cease and desist from the conduct detailed in the application,” that it is “in a hazardous financial condition” and its “conduct is reasonably expected to cause significant, imminent and irreparable harm to its policyholders and claimants because the company is in a hazardous financial condition and is not timely and appropriately handling or paying claims.”
It’s reassuring to see the Insurance Commissioner treating them like any other business because it often seems like they contend with little to no resistance when they constantly ask for rate hikes and raise their rates; they simply submit a request explaining they’re increasing their premiums. But insurance companies have to run a profitable business, just like body shops have to run a profitable business.
Of course, when we translate the need for increased rates to the auto body world, we don’t always receive the simple approvals that insurers seem to experience. Meanwhile, everything goes up every year. Our paint and material costs, equipment, tools…everything increases year over year. But we need to gather our data and compile a lot of information to justify our rate increases.
Still, insurers often tell us, “Sorry, but no one else’s rates went up, so we aren’t going to pay this amount.” Well, that just means it’s up to us to fight for our shops and stand up for what we need to operate profitably because otherwise, we could go out of business. And in order to do that, you have to understand your business. Know your costs and what it takes to be profitable, and then stand your ground. Anyone who doesn’t run a smart business and who fails to keep up with the trends could very easily be contending with a similar financial situation. Even insurers aren’t immune, but shops seem to be more susceptible which is why it’s so important for collision repairers to get educated on factors impacting their businesses and learn different ways to stay on track.
That’s exactly what ABAT tries to do. Our association brings in different industry experts from all over the country who try to help shops, and for a small yearly membership fee, you can have access to all that information. And as a member, your voice counts. We have a Board of Directors specifically to stay in touch with the industry’s needs, but we also want to hear from YOU. If you’d like to learn more about a certain topic, we want to know that, and what’s more, we listen.
Want more? Check out the October 2023 issue of Texas Automotive!