The quizzical look on the young man’s face revealed the predicament in which he found himself. Whether he told her the truth or a lie she would dump him on the spot on the grounds of his motives. However, the cartoon raised the point that all of us should seriously consider before embarking on any of our many conquests in life. Our motives, the result of our emotions, sometimes lead us to do things that adversely affect us.
An emotion that too often adversely affects repairers is the belief that creating new legislation — meant to right the wrongs imposed on us by outside entities — often does just the opposite. The concept that enacting any new legislation, no matter how ill advised, is superior to working to enforce existing laws on states’ books, can only cripple shops’' interest.
Is new legislation the key to your future, or would repairers and consumers in your state be better served by working together to enforce existing laws already on the books? What is it in us that causes us to believe that insurers will abide by new legislation when they've done everything but abide by laws already on the books?
Be careful what you wish for
Montana is one of a number of states that recently went through the arduous process of enacting legislation that was intended to be "repairer friendly." But after insurer attorneys obviously had their say and way, the resultant laws can only further mire repairers of that state. It’s hard to imagine that a shred of competent legal representation was involved, let alone assistance from a repairer association or society that had the best interests of repairers and consumers at heart, in orchestrating this new legislation. In fact, it would appear it was written entirely by insurers. Consider the following, with the new/revised Montana statutes italicized, and my comments in normal print.
"An insurance company… may not… engage in any act or practice that intimidates, coerces, or threatens a claimant or that provides an incentive or inducement for a claimant to use a particular automobile body repair business or location."
Where is this law's definition of what constitutes intimidation, coercion, and threatening of claimants? And what is supposed to be intended by insurers "providing an incentive or inducement" for a claimant to use a particular shop or location? Would an insurer’s quite common practice of reducing or eliminating a claimant’s deductible if taken to the insurer’s DRP shop be considered incentive or inducement? It is one of a number of terms that remain undefined in this new law, which is convenient if you’re an insurer.
While insurers have a right to inspect collision-damaged vehicles to collect VIN, take photos, and the like, Montana just handed over vehicle owners’ keys to insurers — 95% of whom have no ability or motivation to write accurate estimates of repair, nor any right to attempt to write a "competitive estimate." Shops can write "competitive estimates" because the majority have hands-on experience of each of the many steps required in repairing collision damaged vehicles.
On the other hand, insurer reps generally write cost-containment sheets that reflect their primary interest in keeping severity to a minimum… a far cry from a "competitive estimate." Sitting in on some insurer-skewed estimating" courses and a few generic I-CAR courses, in no way qualifies insurer reps to write blueprints for repairs. This inexperience has led some shops, including ours, to rubber stamp each insurer-generated estimate received with "This insurance company paperwork is accepted for information purposes only, and will not be used to determine the methodology, extent or cost of repairs." Office Depot will make you one of these jewels for around $40… money well spent almost anywhere but Montana.
"Except as provided in subsection (2)(b), if an insurance company has direct repair programs with automobile body repair businesses or locations, the insurance company may not limit the number of automobile body repair businesses or locations with whom it maintains direct repair programs." Then, immediately following, the law continues (b) An insurance company may limit the number of automobile body repair businesses or locations participating in the insurance company's direct repair program to those automobile body repair businesses or locations that comply with the provisions of subsection (2)(c)."
This language essentially codifies the DRP system. In most things in life you can’t have it both ways, but apparently not so in the arena of insurer-influenced/dictated repairing. The law continues, "An insurance company is not required to establish a direct repair program in a particular market area in which the insurance company's number of policyholders does not support establishing a direct repair program with any automobile body repair business or location. Not exactly sure what this means, but it gets worse.
"Upon request, the insurance company shall provide, without prejudice or bias…" Where is this prejudice-less, unbiased insurer with which Montana’s vehicle-damaged consumers are supposed to consult? If there are no unbiased, unprejudiced collision repairers (ask yourself who does the best repairs), then there sure as Helena are no unprejudiced, unbiased insurers.
Continuing, "The (unprejudiced, unbiased) insurance company shall provide the claimant (what about the insured?) with an (unprejudiced, unbiased) list that includes all automobile body repair businesses or locations that are reasonably close or convenient to the claimant…"
Aside from the fact that a consumer’s ability to choose a competent repair shop should not be influenced by insurers— even down to a list of favorites—would shipping vehicles to a "repair warehouse" by railroad or car-hauler be considered "reasonably close or convenient?" Reasonably close relative to what and to whom?
This law goes on "…regarding whether the automobile body repair business or location: (i) possesses the equipment necessary to undertake repairs;…" When have insurers ever been concerned with a shop "possessing the equipment necessary to undertake repairs," let alone having the training necessary to use this "necessary equipment," let alone verifying that a shop is actually using it?
"…(iii)(that the shop) agrees to perform quality repairs at the prevailing competitive market price and that meet reasonable industry repair standards." Here we go again: where does this legislation define quality repairs, prevailing competitive market price, and reasonable industry repair standards.
Truth be told, there are no definitions for any of these terms as they are loosely used here or anywhere else relating to the collision industry. As we’ve said so many times before, to date this industry has never had any standards other than the self-imposed standards to which individual repairers themselves adhere.
Attempts at establishing repair standards in the past have been rendered toothless, in part due to the influences of certain outside entities and repairer disinterest. And why are repairers consulting insurers, as stated above and as all of this law implies, that the repairers’ contract is with the vehicle owner…not with the insurer. Shops having allowed insurers to reverse the roles is one major reason the collision industry is in its current sad state.
Though this Montana legislation continues, you get the idea. There’s an old WWII watchword, that "loose lips sink ships." For the collision industry it might read "lousy decrees bring shops to their knees." This is not to imply that there is never a need for new legislation. Rather, half-cocked legislative efforts, like half-cocked shotguns, have great potential for disastrous results. "Be careful what you wish for…"
As I’ve pointed out here, I’m not an attorney. If you disagree with what I see as harmful in this legislation, you’re probably an insurer or an insurer-dependent shop. But if you are one of the enlightened (which in my book indicates you can think on your own without consulting the seven-letter folks), contact me from the information below, and "let us reason together." There is a better way, and I know what it is! And it doesn’t involve writing new legislation that will be skewed to your disadvantage.
Dick Strom, Modern Collision Rebuild, 9270 Miller Road, NE, Bainbridge Island, Washington 98110; (206) 310-2008 (cell); e-mail: email@example.com.