Thursday, 21 June 2012 17:54

Are You Getting Paid for Your Refinishing Work?

Written by Domenico Nigro

For some reason, refinishing is one facet of our business that we accept losing partial revenue on, or are content with our ignorance of how to properly be compensated. Unless you’re adding priming as a separate line item, you’re donating the time and materials to the insurance company. You need to make some very basic but critical changes to your estimating and billing procedures so you can start being paid properly for all the pieces of the refinishing process.

Have you heard the following from adjusters? “I’ll make up for it somewhere else in the estimate.” Or, “I’ll make it up to you on the next job.” They don’t want to be reprimanded by their bosses for paying out for procedures that they’ve been getting for free for so long. As an industry, we deserve to be paid for our work, all of it, and the supplies that go into it. This isn’t a cost like paying rent or your electric bill, and shouldn’t be considered overhead or a cost of doing business today. This is time and materials that are directly used in the refinishing process and should be billed properly.

 

P-Pages and other estimating systems have several loopholes that allow you to lose valuable revenue on your refinishing work. The point and click nature of these systems have allowed us to forget about or let the computers handle the logic that goes into each estimate. We put too much faith in the accuracy of this logic and it’s been hurting shop owners for decades. Even if you are aware of how to properly account for all the costs associated with repairing a wrecked vehicle, often times the insurance adjusters can bully you out of recouping these costs and prohibiting us from charging what we are truly owed. If this is happening to you, and you’re aware of it, you may be cost-shifting to compensate, or you may consider these losses as insignificant.

In a previous column, I wrote about “feather, sand and fill” and it’s recognized as a procedure that should now receive industry-wide acceptance and payment, but there are other primer issues not receiving that same regard and not being paid for by the adjusters. I’ll talk about some of the main ones and discuss how to change this behavior to start getting paid properly.

Here’s  a good example: We did a quarter panel and the adjuster manually cut the refinish time in half, citing a process he (and several other insurance adjusters) call “blend within the panel.”

There was less than five inches of undamaged panel on the repair, so what exactly are we blending to? This “blend to panel” isn’t even listed in the databases. As far as we can tell, it’s just a name they made up to intimidate or confuse the shops. So remember, if primer ever touches the panel, a full refinish time should be covered.

Did you know that 2.5 hours maximum on clears only covers labor and not materials? If you do the calculations on the total clear hours needed, subtract the 2.5 hours and then multiply that number by your paint multiplier, you’ll have the extra clear needed for the job. (I have a separate line item that I call additional clearcoat materials needed above 2.5 max). Coating bare metal parts so they are restored to a “new panel equivalent” is another example of where you may be losing revenue. Another example is doing solvent and tape testing for the stability of primers on plastic parts. What about blending within a panel? Two of the major databases don’t account for color mixing.

As far as tint is concerned, are you putting it in with paint labor or body labor? The adjuster will probably tell you it goes in the body column because you’re not using any new material, which again just is not the case. Your painter knows that upwards of a dozen variances are added to achieve a desired tint. These are more materials that you’re giving away for free.

The same applies to setting up for a second color. For instance: a bumper on a sports car that has a different color than the rest of the vehicle. The paint providers assume that it’s all done as a single operation. They fail to account for clean up between colors, identifying, mixing and matching both colors. These are just a few easy examples of processes that you may not be getting paid for. The list goes on. What are you going to do about it?

P-Pages obviously has its limitations and faults, but these issues aren’t insurmountable and altering P-Pages isn’t the only solution. Let the responsibility fall on you and your shop to start examining P-Pages more carefully to determine how much revenue you are losing every day. If you’re not concerned with filling these revenue leaks and correcting the oversights that negatively affect our bottom line, then why even bother showing up to work in the first place?

We’ve given too much power to the insurers, and the average shop that isn’t a DRP needs to start correcting these mistakes if they have any chance in the industry today. Again, the solution is coming together as a community and creating a new standard. If we all familiarize ourselves with the P-page logic and determine what we are and aren’t getting paid for, then we can begin to make a change in how adjusters value our time and materials.

Know your P-Pages: Your estimating database can be your best tool but you have to know it thoroughly to use it correctly. There are seminars and online classes if you need help, but you must familiarize yourself with what is and is not covered in each procedure.

Join a professional association. Network with your competition. They may compete for your jobs, but we’re all in the same boat when it comes to getting paid what we’re worth.

Don’t ever stop complaining or voicing concern through the proper channels. If you educate yourself on properly accounting for these procedures and you’re still having trouble getting compensated by the insurance adjusters, make your voice heard. Write your local and national representatives. Call the insurance company. It’s possible they’re unaware of what these procedures actually entail, and at the very least it’ll put you on their radar and get them thinking about it. Imagine if they hear it from body shops all over the country all the time? They wouldn’t be able to ignore it or play ignorant. Never again accept the alternatives of cost-shifting, padding other repair times, or believing the promises of the adjusters to “make it up to you next time.” Like all industries, ours will keep evolving, losing the traits that harmed us and adding traits that are beneficial. The newest evolution our industry undertakes must include improvement to the estimation process and improved understanding between the shops and the adjuster of what refinishing procedures entail.

 

Read 3933 times