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Thursday, 30 November 2006 17:00

CIC panel addresses improper changes to refinish labor times

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If refinish labor times on repaired panels are going to be adjusted from those in the estimating systems - something 96 percent of shops say they have seen insurers do - the printed copy of the estimate should show what the original labor time is.

That was the recommendation of the Collision Industry Conference (CIC) Estimating Procedures Committee at the conclusion of a panel discussion on the topic in Las Vegas in early November.

"The committee's recommendation is to show the reduction amount as a separate negative line entry, or clearly document the calculation," Mike Anderson, a member of the CIC committee who moderated the panel discussion, said. "So on the bottom of the estimate, for example, line 42 would tell you a refinish time was changed from, say, 2.2 to 1.6. Then as the end-user of that estimate, you would be able to know the time was changed and by what magnitude."

Anderson, owner of Wagonwork Col-lision Centers in Alexandria, Virginia, opened the panel discussion with the responses he received from the estimating system providers to a series of questions the committee asked about manual changes to refinish times. According to a survey conducted by Collision Repair Industry INSIGHT, 72 percent of shops said the justification they are given for such changes is that the changes are being made on refinish labor times for "partial refinish" of repaired panels.

"In some cases, the system-generated blend times are being applied to repaired panels, which appears to be in contradiction of database guidelines," Anderson said.

All three major estimating system providers concurred that a repaired panel may or may not warrant a time reduction from the full labor time; it's a judgment item best left to the estimator.

But representatives of Mitchell International, Audatex and CCC Informa-tion Services also all concurred that the blend option time is not intended for use on a repaired panel.

"Audatex blend refinish is to be considered for use on adjacent undamaged panels for color match purposes," Anderson read from that company's response, which was nearly identical to that of the other companies. "So blend times were intended only for undamaged panels."

Anderson said the next logical question was if a change to a refinish labor time on a repaired panel is going to be made, what magnitude of a change is appropriate.

"We all agree that the thing we're decreasing is the application of the basecoat," Anderson said. "So we need to know what percentage of the basecoat time is for actual application of the basecoat."

Motor Information Services, which provides the estimating database used by CCC, was the only company to provide this information, Anderson said. Motor said 19 percent of its basecoat paint time is for basecoat application; another 7 percent of the time is for application of primer/sealer.

"So the only thing that should be decreased when you're modifying or manually changing paint time would be the basecoat and sealer time," Anderson said.

He cited a hypothetical refinish labor time of 6 units. Twenty-six percent of that time (19 percent for basecoat application and 7 percent for primer/sealer) would be 1.6 units.

"If you were going to decrease anything, then the most you should decrease that would be 50 percent of the 1.6 units, or .8 units, not 50 percent of the entire 6 units of labor," Anderson said.

If a shop received a printed estimate written in an estimating system the shop doesn't have, the only way to know that refinish time has been changed is to note the asterisk by the labor time. But even so, Anderson said, the shop has no way of knowing what the original labor time was if they don't have that estimating system, so there is no way to audit how significant a change has been made.

So will the estimating system providers adjust their systems so that a printed estimate with an adjusted labor time will indicate what degree of change has been made.

"We've identified the need to provide an auditing type system," Tom Fleming of Mitchell International, said. "That's one of our priorities."

"At Audatex, we also embrace that," the company's Scott Jenkins said.

Bruce Yungkans of CCC Information Services also said he'd noted the committee's request for this auditing information.

One other related finding from the INSIGHT survey of shops about manual changes in refinish labor times: Nearly two-thirds of shops said they are "sometimes" successful in requesting full refinish time when such a time has been change. Twenty-five percent of shops said they are not.

Bills would require total loss database

Also at CIC in Las Vegas, David Regan, vice president of legislative affairs for the National Automotive Dealers Association (NADA), explained that his organization is among those supporting proposed federal legislation that would require insurers to place into public domain the VINs of all vehicles they declare total losses.

The Damaged Vehicle Information Act (HR 6093), as well as a similar bill in the U.S. Senate (S 3707), requires the insurers to make the information available in publicly-searchable databases, such as those operated by Carfax or Experian.

The information required would include VIN and odometer information; an indication of whether the vehicle's air bags were deployed; and a brief statement on why the vehicle became a total loss (such as flood or fire damage, theft recovery or collision)

"We are not seeking disclosure of repair information," Regan said. "Vehicles that are not eclared a total and that are repaired and back out on the road are not part of this legislative initiative. Just those declared a total loss."

The system, he said, would not change any aspects of state laws regarding titling of total loss vehicles, but would give anyone purchasing a vehicle more accurate information on its background, Regan said.

The Automotive Service Association (ASA) and the Automotive Recyclers Association (ARA) also are urging their members to voice support for the bills.

"The insurance industry is not officially opposed to this legislation," Regan said. "But we have very little doubt that they have serious concerns about the bill."

John Yoswick is a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988.

 

Change in refinish time? Consider overlap and clearcoat

Questions during a panel discussion at the Collision Industry Conference (CIC) about manual changes to refinish labor times brought out some important distinctions between CCC Information Services' estimating system and those of its competitors.

If a user of the Mitchell or Audatex estimating system manually reduces a labor time on a repaired panel, for example, no overlap is taken if blending into another panel. But the CCC system does automatically deduct such overlap when a refinish labor time is adjusted.

"So the user has to either take that into consideration before they change the time, or else they have to manually add that back in," Mike Anderson of CIC's Estimating Procedures Committee, said. "If you blend a panel, you should not deduct overlap. If an insurance company changes a paint time (in CCC), then the shop should get credit back for the overlap."

Anderson cited a hypothetical example of the refinish time for a repaired door being changed from 2.2 to 1.5. If the adjacent door is being blended, the CCC system will still automatically deduct .4 from the time for blending; this overlap deduction is not automatic with the Mitchell or Audatex systems.

The change to the refinish time in the CCC system also automatically affects the clearcoat time, Anderson said. If the refinish time on a repaired panel is changed from 2.2 to 1.5. clearcoat in the Audatex and Mitchell systems is still based on the 2.2; in the CCC system, it is based on the 1.5.

 

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