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Wednesday, 08 April 2015 00:00

ABAT Presents Labor Procedures Survey

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The Auto Body Association of Texas (ABAT) conducted a survey related to what p-page procedures are billed and collected. The survey was conducted by Ten Point, an independent third-party company.

Fifty-four shops from Texas participated, including members of the association as well as non-members.

Burl Richards, President of ABAT, notes “Ten Point told me that, out of all the surveys they had ever conducted online, this survey had the highest percentage of participation and response.”

Richards believes this information will be useful for providing proof that insurance companies’ claims are erroneous.

“As shops, we are constantly being told ‘you’re the only one’ when it comes to requesting reimbursement for certain procedures or processes necessary to restore damaged vehicles to their pre-loss condition. When an insurance company says you’re the only one and then says they only have to pay the Prevailing Competitive Practice (PCP), then it becomes their word against ours. Before the survey, we had nothing ‘documented’ to prove their assertion was totally false. Now, we have a survey performed by a third party, non-partial vendor (that also does surveys for insurance companies) that we can provide as proof that we are definitely NOT the only one.”

The 2015 ABAT Prevailing Practices Study surveyed 54 collision repair facilities on 15 procedures. For each procedure, ABAT questioned how frequently the facility performs the operation, if the operation is added to their estimate, if they receive compensation from at least one insurer, and if they would request payment for the operation if their business wasn’t adversely affected by the insurance industry.

The first procedure on the survey references test driving the vehicle after the repair if damage necessitates, and 51.85 percent of shops surveyed perform this operation all of the time, 31.48 percent perform it most of the time, and 16.67 percent some of the times. Only 3.7 percent of shop polled bill for this item all of the time, while 59.26 percent never include this operation on their estimate; 86.79 percent do not receive compensation from insurers, but 90.57 percent would bill for their time if not for insurer interference.

When it comes to cleaning the vehicle, 94.44 percent do this after each repair, but 38.89 percent never bill for this, and 42.59 percent only bill for this some of the time. Insurers pay 40.38 percent of shops for this operation, and 92.45 percent of shops in the survey would bill for cleaning the car if the insurance industry didn’t adversely affect their business. Of the shops surveyed, 61.11 percent ask for additional materials by invoice/calculator when exceeding pre-set thresholds, but all shops perform this at least some of the time. All but 3.7 percent add this operation to the estimate at times with 59.26 percent billing all of the time. Insurers pay 94.34 percent of the shops for this operation, with 71.7 percent being paid in paint, 1.89 percent paid in body and 26.42 percent being paid in both. All of the shops surveyed would like to bill for this item.

When questioned about performing labor for feather prime and block of repaired outer panels from the 150 grit level to slick ready for refinish, 88.89 percent do this all of the time, but only 24.07 percent always add this operation to their estimate, while 11.11 percent never do. Insurance companies pay 73.58 percent of these shops, with 27.45 percent paid in paint, 29.41 percent in body and 43.14 percent in both. All shops would bill for this without adverse effects from insurers.

Labor to de-nib and polish trash particles is always performed by 79.63 percent of surveyed shops with only 33.33 percent adding it to the estimate all of the time; it is added most of the time by 22.22 percent, some of the time by 29.63 percent and never by 14.81 percent. Of the shops participating, 83.33 percent receive payment from at least insurance companies, but all shops would bill for this without insurer influence.

Although 83.33 percent of shops said they always cover vehicles to reduce additional damage, 12.96 percent never bill for this, but 48.15 percent always add this operation to their estimate, and insurers pay 85.19 percent of shops. All polled shops would request payment without adverse insurer influence impacting the industry. While only 1.85 percent of shops never tint paint for a better match and to follow manufacturers, only 16.98 percent always bill for this, though they receive compensation from insurers 79.63 percent of the time, and they’d all request payment without insurer influence.

Of the shops surveyed, 44.44 percent always provide additional efforts to pre-fit non-OEM and used parts, but 40.74 percent never add this operation to their estimate because 62.26 percent do not receive payment from insurers, though 100 percent would bill for it if not for adverse insurer influence. When it comes to allotting time for preparation of the estimate and total loss paperwork, 53.7 percent of shops always do this, while 14.81 percent never do. This is never added to the estimate for 37.04 percent of surveyed shops and 35.19 percent add it only some of the time. More than half of shops (52.83 percent) receive payment from at least one insurance company for this item, mostly being paid in body (84.85 percent). Without adverse influence from insurers, 92.16 percent of shops participating in the ABAT’s survey would require payment for this item.

While 74.07 percent of surveyed shops always perform labor of removal and replacement of structural foam in damaged areas, only 16.98 percent always add this to their estimate, but 62.96 percent receive payment from insurers for this operation; all participating shops indicated they would bill for this item if they didn’t have to worry about adverse effects from insurance companies. Over 57 percent of shops always create fabrication of templates, inserts and sleeves, but 45.28 percent never bill for this with only 16.98 percent of shops always adding this operation to their estimate. At least one insurer pays 45.28 percent of these shops, but all 55 shops would like to be compensated for the labor and materials involved in this operation.

When asked about providing protection of interior components and compartments during welding and grinding work, 96.3 percent of surveyed shops reported doing this most or all of the time; however, 57.41 percent never add this item to the estimate, and 72.22 percent never receive payment from insurers for performing this operation, though 98.08 percent would like to be paid if not for insurer influence. Of the 55 shops surveyed, 79.63 percent always provide a handling fee on sublet repairs when they don’t have an agreed DRP arrangement. Over 72 percent always add this item to their estimate, and at least one insurer pays 83.33 percent of these shops.

Performing clean-up of LKQ parts is always done by 74.07 percent of polled shops, but only 52.83 percent usually or always bill for their time. Two-thirds of the shops receive payment from an insurer, with 80 percent being paid in body and the remaining 20 percent in body and paint. When non-OEM parts don’t fit properly, 60.38 percent always provide additional labor and materials, but only a quarter of those shops (15.69 percent) always add it to their estimate. Insurers do not compensate 60.78 percent of surveyed shops, but 98 percent would request payment if not for adverse influence from the insurance industry.

Richards hopes that “other shops can utilize this survey as well in order to receive compensation for procedures they have had to do for FREE because it had to be done, yet insurers refused to pay. We plan on using this survey to get paid for procedures and processes that MUST be done.”    

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