Ironically enough, even body shops that are deeply entrenched in direct repair programs insist that steering is an issue. Does someone who directly benefits from participating on a given insurance carrier’s direct repair program have a right to cry foul? I’m not sure you can find anything more hypocritical.
Conversely, you will find relatively few insurance companies that believe steering is an issue. In fact, some insurers might have you believe that steering is a word used only by disgruntled body shop owners who can’t get on a direct repair program. Other insurers would lead you to believe that steering is more rare than a unicorn sighting.
Now that I’ve outlined a few of the perspectives from both sides of the industry, let’s place some framework with a few facts.
First, steering does exist. It’s not a unicorn, a mirage, or the words of a disgruntled shop owner. It exists in many forms.
But before you say, “Aha! I knew it,” let me explain. Although steering does exist, it doesn’t exist in the context that many of you reading this may believe. There isn’t a major insurance company in the industry that advocates, teaches, or encourages their staff to steer vehicle owners to or away from a shop.
That said, insurance company executives aren’t foolish enough to believe they don’t have local or regional management that steer or manipulate the system. Unfortunately, insurers, much like body shop owners, have limited control over what their employees do 100 percent of the time.
The steering that happens at a local and regional level is typically a result of personality conflicts between two individuals. Much like anything in life, people buy from people. If an insurance adjuster doesn’t like you or your staff, your shop could be negatively impacted. The adjuster might suggest to the vehicle owner that you are difficult to deal with, or that the insurance carrier doesn’t have a relationship with you versus one it has with another shop down the street. These types of business practices aren’t ethical, but I am also a realist. These occurrences are isolated and not a general practice employed by the largest carriers in the U.S. Unfortunately, the body shop on the receiving end of this is negatively impacted.
Shops clamor for legislation in the hopes of putting an end to steering. Does anyone believe that if passed into law that it would prevent an adjuster from subtly hinting that your shop may charge more than someone else on their program? If you believe that, I have a unicorn I would like to sell you.
Virtually every major insurance carrier has a word track designed to limit their staff members from steering. Some have shifted to using centralized call centers so that personality conflicts don’t impede the customer’s choice. Customers are informed they have a choice as to where they want their vehicle repaired. But even though this may be come as surprise to many of you, ninety percent of the vehicle owners (customers) don’t have a shop in mind and do ask the insurance company for a recommendation.
Legislation could have a positive impact on word tracks, and fines could be established for breaking the law. Unfortunately, the odds against proving guilt would seemingly render the best legislation meaningless.
Steering is alive and well in the collision repair industry. Your job, as I see it, is to get better at playing the game and finding a way to reach the vehicle owner (your potential customer) because the odds are good they don’t even know who you are.
I’ll take on the topic of referrals in my next column.
‘The Insider’ is a corporate-level executive with a Top 10 auto insurer in the U.S. Got a comment or question you’d like to see him address in a future column?
Email him at: Auto.Insurance.Insider@gmail.com.