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Friday, 04 January 2019 23:53

In Reverse: Early DRP Programs of the 1960s

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One former shop manager who was around during that time and was interviewed for this article called the late ‘60s and early ‘70s the “Wild West” period of the industry when “anything went.” The insurance companies needed a way to protect themselves against fraud. This gave advent to the insurance company appraiser or independent appraisers.

 

In 1962, a trade magazine article written by C. A. “Art” Fox, president of the Independent Garage Owners of America, stated in part: “Let’s face the fact: Unethical shops (not the general run of body shops) in the beginning took advantage of insurance companies by increasing the cost of the job to cover the deductible. They did other work in conjunction with the immediate repair and added that cost to the collision job. In self-preservation, the insurance companies resorted to their own appraisers or used outside, so-called ‘neutral’ appraisers. This was a fairly workable plan for a while, but now the tail wags the dog; the appraisers are setting the cost for collision repairs without knowing the cost of the shop’s operation (and neither do many shop owners!). This has been going on for some years now, and most body shop operators are hypnotized into believing they have to work on the low estimate, regardless of who made them. This practice inevitably leads to shoddy workmanship and unsafe collision repairs because the shop owner wants to make a profit. Correction of this situation, in the estimate of this writer, is a matter of education.”

 

Fox urged shop owners to ascertain their operating costs and learn to make better estimates so their work would be profitable but fair. Still, it would not stave off the advent of the modern DRP programs.


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