Thursday, 31 October 2013 23:00

CAA Pasadena/Foothills Meeting Focused on Estimates, CDI, Health Care, and BAR

The October 24, 2013 meeting of the chapter was held at the Brookside Country Club, 1133 Rosemont Ave, Pasadena, California, as usual. President Linda Holcomb was back, assisted by board member Chuck Bistagne. The meeting was dedicated to an update by the CAA lobbyist for the past 20 years, attorney Jack Molodanof. Jack started by praising the work of the new California Department of Insurance Commissioner, Dave Jones.

Jack said Dave has brought a real focus on the collision industry concerns to his department. In the past a CAA member complaint would go to one staff member and probably get lost in a pile of random concerns. Under Dave Jones, several knowledgeable people have been assigned to our industry and constituent concerns are dealt with quickly.

Jack provided a printout of current Department of Insurance regulations for all members attending the meeting. He said these are valuable negotiating tools that enable a shop to get paid for all necessary line items on an estimate. He was shocked that some shops would accept an insurance company estimate rather than writing their own. He noted that the insurance company and the shop have two different objectives when writing an estimate. The shop, of course, wants to write an accurate estimate of what is needed to return a vehicle to pre-accident condition. The insurance company, on the other hand, is primarily interested in settling the claim, and at the lowest possible cost. In pursuit of their objective, the insurance adjuster may try to omit certain operations that the shop deems necessary. Jack says with a copy of the regulations in hand, a shop can demand to be paid for all necessary operations. There may be some dispute over how much will be paid, but there can be no dispute over whether or not an operation is necessary.

Jack said the main concern here is the filing of complaints to force insurance companies to pay what is required. He said they're not likely to comply if no one complains. A report form was also provided at the meeting. This issue resulted in questions and discussions about the consequences of filing a complaint report. Shops with a direct repair relationship noted complaints could result in a loss of DRP status or some sort of retaliation. Independent shops would have no such concern. Jack noted that a lack of filed complaints when the time comes to discuss regulations could tilt the talk in favor of the insurance industry. They can now say if no one is complaining why should a regulation be imposed? Some members asked if filed complaints had resulted in shops being paid for disputed services. Jack noted that two shops had filed to be paid for storage time and since regulations require that payment, both shops were paid -- perhaps not as much as they preferred, but paid for the storage nonetheless.

It appears that complaints go beyond resolving a specific shop dispute. An abundance of complaints establishes an area ripe for regulation. Shops objected strongly to being held responsible for problems created by the use of aftermarket parts required by an insurance company. As a result, among the many recent changes to regulations, is the requirement that insurance companies that require the use of aftermarket parts be responsible for faulty parts rather than putting that responsibility on the shop that installed them to comply with the insurance company requirements.

Jack also discussed some changes to Board of Automotive Repair (BAR) regulations like windshield replacement standards and some successes on the legislative front. For example, BAR fines have been increased from $2500 to $5000, but for simple mistakes, it is now possible to receive non-technical training, like Write-it-Right or ethics training, instead of a fine. On the legislative front, the insurance industry tried to kill new collision repair regulations but the CAA helped kill that effort. Another battle has been the impact of a minimum wage increase on specialized technicians who provide their own tools. A small business like a collision repair shop would have to pay double the increased minimum wage, possibly rising to as much as $20.00 an hour. There is also an effort to head off the attempt to impose a sales tax on services that already exists in some states. This would obviously be a disaster for small businesses that provide mostly services.

In addition to the presentation by Jack Molodanof, Nicholas Cruz from HUB International also provided some information on upcoming health insurance changes as the Affordable Care Act rolls out. Basically the message is that it is constantly changing. The three major carriers in California are holding back on announcing increases in rates until the last minute. Cruz says HUB International is now available to CAA members to get answers to their many questions. The regional office for HUB International Insurance Services is at 4371 Latham St., Suite 101, Riverside, California 92501. Phone 951.788.8500.

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