Another reason we will never be a direct repair facility for any insurance company that will not protect the insured's (your) interests.
Our shop has experienced this form of harassment first hand. We actually had an adjuster just flat out refuse to pay our labor rate and blatantly told the insured (customer) in our office she had to pay the difference out of pocket. I told him if he wanted to move the car to another shop he could, but he would have to do it in writing, he refused to sign, I also told him he would have to sign a written refusal to pay our labor rate, surprisingly he singed that one and it's currently on file and is scheduel to be posted on our blog soon.
The insurance industry is squeezing body shops in the hopes of saving a nickle, problem is they are hurting the industry as a whole and ultimately its the customer who suffers.More on this article.
You may not qualify as a direct repair shop! To qualify you need the proper certifications,{ ASE and/or I-CAR} From reading your resume that you have posted there was no mention of any kind of certification or any proper training.Insurance companies that support any direct repair shop also warranty the shops work!Also how many full time employees do you have?What are their qualifications? Are any of them ASE or I-CAR certified? Do you have the proper equipment,such as a frame machine or paint booth? From the pictures of your shop I saw neither! As far as the insurance company refusing to pay "your" hourly rate,your rate has to coincide with the other body shops! In other words the insurance company is paying the claim so they want to make sure that the vehicle is repaired by qualified personnel with the proper tools and equipment in a timely fashion.Also the person filing the claim can choose any shop they prefer or not fix the vehicle at all.Also most body shops are able to save the person filing the claim their out of pocket expense.{DEDUCTIBLE} Can you offer a rental vehicle while the work is being completed? Most direct repair shop offer this service as well.
ReplyDeleteI'm not sure you understood, the post. We were saying: we are not a direct repair facility and do not have the desire to be. So listing qualifications is redundant. But thanks for taking the time to post.
ReplyDeleteAlso; side note, it's not the insurance companies list's of qualification's that determine the labor rates in our industry. Body Shops set their rates based on many factors. Any insurance company that refuses to pay a reasonable labor rate is using manipulation tactics, its these tactics that hurt the Industry as a whole and in the end, it will be the Insurance companies themselves and the policy holder they claim to be looking out for, that will end up with uneducated people who don't care, fixing their cars because, to be quite honest, the margins just aren't high enough to keep professionally educated people in the Industry.
Ultimately, the Insurance Companies policies have shown to protect their profit margin at the expense of the Collision Repair Industry and sacrificing Integrity that use be be the corner Stone of business in America.
We remember when body labor was 18 and mechanical was 18, the both grew steadily until e Insurance Companies focused on the squeeze. I also watched the gap increase between body labor and mechanical first hand. Now body labor seems to be 44 and mechanical seems to be 90, so tell me how such a drop in revenue cannot have a negative impact on any industry.
I agree with the anonymous. Direct repair is the way to go.steady work flow,steady pay.I recently sold my body shop/service business after being in the industry since 1973.8 service bays,5000 sq foot body shop.The best thing to happen to the body shop bus. is the direct repair. I was able to hire better techs,pay them better and help provide them with the most up to date training. Most of my employees have been with me for the past 10-15 years. Not to mention the upgrades that I have been able to do,all because of the DRP.I wish the program had been implemented 30 years ago.The auto body business is completely different from the service end of it.The service end has gotten so technical that you have to charge more for that service.I agree that the body shop business has changed,but not in the leaps and bounds that the service part of it has! Just the diagnostic equip.needed on the service end is outrageous.Once again the insurance companies are only trying to make sure that the customers vehicle is being repaired properly. Yes they too have to show a profit at the end of the year.So yes they are looking for the best service at the best reasonable price.If you the body shop owner can't show a profit after being paid 45-50 dollars an hour you're doing something wrong.Also your qualifications as well as your employees qualifications is part of what makes up the dollar per hour rate,as well as the equipment that the shop has to offer. I've spent thousands of dollars on equipment,training and tools and it has payed off.DIRECT REPAIR IS THE WAY TO GO! YOU KNOW THE OLD SAYING "IF YOU CAN'T RUN WITH THE BIG DOGS,STAY ON THE PORCH!STAY OUT OF THE WAY!"
ReplyDeleteI can see you guys talk; interesting how much effort some will go to to keep the air clear, or at least mask the Oder.
ReplyDeleteProvided you have the volume of business and give them the discounts they ask for and give them the additional discounts as you come to depend on them for business. No matter how you slice it, your margins would be better if all those customers were not discounted based on volume.
Yes the auto body business is completely different then mechanical, the insurance company is not as nearly involved in that end. They find their biggest savings in the auto body part of it, the personnel are less educated, so they found an area they can exploit. Interesting how things work out. I'm just waiting to see when it all hits the fan.
Again, if you have a contract with an insurance company, go for you. Just remember, when they come knocking for concessions (and they will), you will see your margins slip as well.
You seem to be selling the idea of "Direct Repair", not sure why, but its painfully obvious and interesting at the same time. I'm thinking you guys been getting bad press (and for good reason, truth always come out in the end) and are doing damage control and, you think Im ignorant of the facts (the reason your melding in the first place). Problem is I'm not going on facts I've read, Fact's I've heard from a disgruntled Ex body shops that couldn't take the concessions any more, or an old timer making excuses for going belly up. Our decision to stay clear of insurance company contracts is a business decision, a decision made because I personally have been in the Industry for over 25 years and have watched first hand what has happened. Ive seen Insurance companies spend $500 on an adjusters salary to avoid a $200 supplement, Ive seen adjusters walk into a shop and just start cutting labor off a computer generated estimate, generate by the same data base and also have witnessed feet dragging to put pressure on independents because you don't have a contract.
So in the end I say, we are not Dog's, so yes we will not be running with you. Dogs are pets. If you think of yourself as Dogs, that's up to you, and if your getting fed by the Insurance Company and are afraid of biting the hand that feeds you, then I say, that is why we will not be under contract. I see your integrity has found its price.
Thanks for posting...
To Dewright collision and service.
ReplyDeleteFoot note:
I noticed you guys don't have a website. Webmasters are expensive huh, expensive enough to need to be making a good profit margin. You know a margin large enough to grow your business instead of just treading water. Maybe you should ask the hand that feeds you for a website? or do they not care if you expand?.
Just an observation...
http://gacollisionindustry.wordpress.com/2009/08/13/independent-auto-body-shops-sue-progressive/
ReplyDeleteIf the labor rate is too high the insurance company has to total the vehicle,therefore you would have nothing to work on. Why do need a web-site to be a successful body shop? As you stated in your last post.
ReplyDeleteSo you would rather lower the price and work on a car the should be totaled? rather then collect the storage, tear down to verify and complete the paper work needed to process a total loss? Seems to me the customer would rather have a diff car anyway, considering theirs is jut about totaled. Insurance company would rather write a check knowing there would be no supplement. Im sure you can process more totals then you could repairs, therefor the shop would make more money on volume, the insurance company can eliminate supplements and the customer is out of their damaged car, everyone wins.
ReplyDeleteThe problem with the mentality in body shops today come back to the "Spider Monkey". You know how they catch spider monkeys? They put peanuts in a gourd with a hole in it, the monkey reaches his hand in and makes a fist of peanuts, then the hunters just walk up a club the monkey. All because the monkey wont let go of the peanuts. So you see, as long as the Insurance Companies know they are working with Monkeys, they will only give you peanuts. Let go of the peanuts, think outside the box, the Industry will be better because of it and maybe all our margins will increase. Shops should work together to educate themselves to protect and run their own shops without the Insurance Company hunting us like Spider Monkeys.
A website is a technology of advertisement, ts best to utilize all the tools available for success. Not a requirement. I was just making the point that most shops don't make enough money to invest in current technologies and as long as we keep our fist in the gourd we never will.
Comments are close on this post. Thank you sharing your thoughts on this topic.
ReplyDeleteI do have the benefit of getting final word, after all it is our Blog, ha ha. Use the following links to confirm our position on this topic.
http://www.bodyshopsolutions.com/WordPress/?p=85
http://www.bodyshopbusiness.com/Article/2879/_profits_not_a_4letter_word_state_farms_new_pilot_directrepair_program_impacting_shops.aspx
I'm sure if you stay on top of your PDR, you will see trends as well.
We closed the comments on this post because to be quite honest, its like beating a dead horse. We trust you will fact check and research your position as well.
Final though? Lowering your labor rate to appease the Insurance Industry hurts the entire Body Shop Industry. It's just a matter of time before your bottom line reflects it, turn a blind eye and they will come for you next. Support fellow shops and we all are stronger because of it.
Robert M. Proud to sign my comments with my real name...
P.S
You can copy and paste the urls into your browser if it doesn't display as a link. If you need help with that technology let me know, I will have my 8 year old Son email you the directions.