Comment

Comment by Jeff Silver on August 31, 2009 at 11:35am

It's like cover car, hazardous waste, finish sand & buff, hardware, etc. There was a time when none of those things were routinely paid for, but enough of us knew we were entitled to be paid, continued to ask for them, and now they are routinely paid for. CIC did their job with feather, prime & block. Now it's up to us to make sure we include it on our estimates when appropriate.

Comment by Bill Fowler on August 29, 2009 at 10:26am

Jeff, I have followed some of the efforts of CIC and applaud them but their findings and all that they fight for is pointless if it is ignored by the insurance side. A very obvious example is the "feather, prime and block" debate. I am aware that the subject was debated for over 2 years, first establishing that it is a valid operation that must be performed, and second that it is the painter who has to perform it.
This was obvious up front and is referred to in every database that I have ever seen, so what progress has been made from all the argument over the obvious when it continues to be ignored? I had a long discussion with one of the study participants from the insurance side, whose company refuses to consider the operation to this day. He publicy acknowledged the necessity of the operation when he could no longer act oblivious to it without either looking like an idiot or a bully and then grudgingly acknowledged that it was a painter's responsibility to carry it out.
When I pressed him as to why his company still refused to allow payment for the performance of this operation, this is the B.S. answer that I got. He told me, "We acknowledged the necessity of this operation years ago and instructed our adjusters to add time to the repair line of the estimate at their discretion. To consider it separately at this point would require that we pay it twice." What?
He obviously believes that I am an easily manipulated idiot to say that to me and expect me to fall for it. Am I to believe that the same man who instructed his adjusters to allow for the operation at their discretion in the "repair" column cannot tell the same people that there has been a change as a result of the CIC findings, that now this operation is to be performed by the painter and materials, for which there must be an allowance, should now be considered as well?
What he is really saying to me is, " This is an ambiguous figure that may or may not be there, and my position statement allows my company to continue to be the only ones who know if we have really allowed for it or not, and we still get to dodge paying for the necessary materials."
It's like I have heard it said, " Many of these committees that are comprised of both insurance and bodyshop representatives are like the football team that invites their opposition into the huddle." I agree there has to be a forum for problem resolution, but the reality is that we are on opposite sides, fighting over the same money. If the shop's profit margin increases, it is at the expense of the insurance company's margin. Do you really think they will ever willingly hand any of that money over to us, whether we can prove we really deserve it or not?

Comment by Jeff Silver on August 29, 2009 at 9:47am

One more observation...I want to include CIC in this discussion because it was also at the center of the improvement of the relationship between insurers and repairers in the '80s. CIC meetings always had lively, and often heated, discussions in the general forum and in committee meetings. There was often disagreement on certain points, but in the end both sides bought into the final result. Participation was from industry leaders in both industries, and everyone looked forward to the next meeting. It was the perfect forum to wrestle with controversial issues.

Today it almost feels like we are running away from an opportunity to reinvigorate that forum. It's time to come together, sit down at the CIC table, air our differences, and work out how to best serve the customer.

Comment by Jeff Silver on August 29, 2009 at 9:37am

Looks like we've come full circle in the past 30 years. I've been an observer of the relationship between insurers and shops for a long time and a participant for the last 14. Back in the late 60's and early 70's the relationship between them was pretty good. Honest pay for an honest job. By the late 70's it had deteriorated and become as adversarial as it's getting today. Coincidence or not, I-CAR came along at the right time. While it focused on the technical aspects of the repair, it provided an opportunity for insurer's and repairers to learn to work together again. Understanding what was really necessary for a proper repair brought both sides together in the same room and led to better cooperation out in the field on a day-to-day basis.

This didn't happen overnight though. It took several years, but the process was hastened because people both high and low in the insurance industry bought into the concept. While the higher ranking people didn't attend classes, they believed it was good and encouraged their field people to attend. Things got pretty good again in the late 80's into the early 90's.

When things were going along pretty well, the insurance people trusted the shops to do an honest job for honest pay. That was when DRP's came along. The insurance companies said, "If the shops can do it, let's trust them do it for speed and customer service". Of course they could also lower their loss adjustment expense. As the 90's rolled along, everyone got pretty complacent. We all knew how to fix the cars. There was nothing particularly new, and the focus slowly turned to KPI's instead of serving the customer. New people came into both sides of the industry and started making new rules, and maybe didn't have the same appreciation for what it really takes to do a quality repair. This makes it easier to interpret the P Pages in new and creative ways, both in the field and at management levels. Over the past 10 years or so, the relationship has again deteriorated to where it was in the late 70's.

In case you haven't already heard, we are on the verge of another sweeping revolution in how cars are made and how they will have to be fixed. Materials, construction and joining methods, alternate fuel changes, renewed interest in crashworthiness, etc. are behind these changes. This could cause as much confusion and misinformation as in the late 70's when the unibody came along. It's a perfect opportunity for both sides to get together again and learn how proper repairs should be made. Who knows? It may even lead to a better relationship between the two sides out in the field, and once again build trust and cooperation for the good of the consumer.

Comment by Bill Fowler on August 27, 2009 at 12:11pm

I think "Body Shop Diary" mistakenly believes that I am critical of shops that participate in DRP programs. I am not critical of the shops. Everyone has the right to run their businesses they way that they think is best for them. I am critical of the concept and the things I see happening to this business as a result, either directly or indirectly. I think very few people have actually put pen to paper and calculate what they are giving in terms of dollars as compared to what they are getting in return in their DRP arrangements. If a shop believes that they are being adequately compensated in terms of increased volume and/or profit as a direct result of their DRP participation, and the numbers bear that out, good for them. I just think that too many times the decision is made with some desregard for the financial reality and there is only the illusion of benefit to the shop and the customer. Becoming dependent on DRP referral is not, in my opinion, beneficial. I think that DRP participation is a major contributor in the demise of a great number of shops and the effect is spreading to non-DRP participants. I will get to that in a moment.
When I participated in a DRP program for a major insurer, my volume was such that I had a full-time manager whose sole job responsibility was to manage the DRP workload. His compensation package equaled that of an adjuster, which was in the $75,000 range, so I reasoned that I was saving the insurance company $75,000 in free service up front in exchange for what? At the time, the main benefit was to process the workload more quickly without having the process interrupted by having to wait on insurer approval for supplemental repairs. I didn' t really think it all through until later.
The financial reality was that the salary I was paying the manager who handled only the DRP repairs exclusively constituted 10% of my profit margin on the DRP work. In addition to that, I was waiving storage charges, accepting the responsibility of imposing restrictive policies on myself and not having the freedom to object to increasingly repressive conditions. I also realized that there was no exclusivity in my arrangement, but I was in competition with a number of other shops, who were all doing the same thing as me. True, it was a reduced number, but the competition factor remained, nevertheless. To deny that the shops who work the cheapest get the greater number of referrals, or influence the standard, is to deny reality.
Then, I got to thinking about it and remembered that I didn't go to the insurance company and ask to be included in their program, they came to me. Now why would that be? Would it be because I had always done a large volume of their business, repair costs were always reasonable, they never had any complaints and their customers were going to come to me anyway? The insurance company was able to capitalize on my already established reputation and do so at my expense. I didn't need their referrals, I reasoned so there was really no need to waive anything or absorb administrative costs. I could pay my manager's salary with the money I had been giving away.
I also considered the Walmart business model and grew increasingly uncomfortable at the percentage of my total workload this DRP arrangement constituted....control of my own business was slowly being handed over to someone who had a vested interest in diminishing my profitability where possible. When I pulled the plug, my DRP workload constituted 58% of my total workload and the insurance company was busy "improving" the program, promising me even more referral business by reducing the number of participating shops. Everyone thought I had lost my mind, but I wasn't going there. It was time for me to regain control of my business; I didn't need or want any insurance "partners". The farmer and the mule may be plowing the same field, but they sure ain't partners.
Today, I frequently have more of this insurance company's work on my premises than all the participating DRP shops in this market area combined. I don't do their administrative work for free, I charge them storage and have the freedom to object when I want to without fear of retribution. I no longer participate in any DRP programs, but have not been able to escape some of the control.
One of the fears I had regarding DRP influence has come to fruition. I feared that DRP terms and conditions could begin to influence the marketplace and become "usual and customary". That has begun to happen with some insurance companies telling me and their customers that while the customer is not compelled to utilize a DRP shop, the insurance company will not pay any more than they would have had the customer selected the DRP shop. Those of us who have rejected concessions are sometimes being subjected to them by default. I dropped what I considered to be a "good" DRP relationship because I felt like my participation only supported that which I find most objectionable. I believed it to be very hypocritical for me to criticize that which is steered to someone else and celebrate that which is steered to me.

Comment by Bob Smith on August 26, 2009 at 4:52pm

I had not had a chance to read Bill's commentary before preparing the previous post but after doing so I can tell him I got the chance to ask his question of "have you ever reviewed an estimate and let the shop know they missed an item or added anything for a obviously mistaken omission".

Bill after two trips around the proverbial mulberry bush never getting an answer it was narrowed down to a "yes or no" type question. Guess what, silence no answer, this from the CEO of the company.

The validity of your comments should be understood by all who wish to serve the vehicle owner fairly and the insurer fairly.

Comment by Bob Smith on August 26, 2009 at 4:43pm

Mr. Finley makes some very legitimate points in his comments. Having been on his side of the fence for 30+ years I truly understand the tight rope he speaks of in preparing an estimate. I will also say I disagree in a couple of places and but feel if we sat down that we would be talking the same language.
Unfortunately there are few adjusters out there that will approach the project of estimating with an attitude of let’s do this right the first time so we don’t have to do it twice. I don’t mean by that to be a “give away artist”. The adjuster is just like the shop he is caught between the devil and the deep blue sea. If he does what is necessary to properly repair the vehicle at a fair price his numbers will not match with those who follow the “pay only what I have to” philosophy. When his numbers do not meet the “standard” set by his company then he either is chastised or is booted to the curb like yesterdays newspaper.
Shops have to understand that the adjuster is under a set of criteria set by his company and he draws a pay check from them. Just as a shop expects their employees to follow orders so do the insurance companies so don’t blame the adjuster who comes into the facility he may not have the authority to do what he knows is correct. Also he will unfortunately walk into some shops that want to either punish a company [for what is perceived as bad treatment or just plain wants to make more than a fair margin] and after of meeting a couple of these his attitude adjusts to the same one that the shop has who has run into bad adjusters.
There should be a common ground that both could work on that gets the job done for the vehicle owner with a minimum of discomfort while allowing both to do their jobs. For this to happen though is going to take fairness on both sides. I truly agree with him on that.
As a staff appraiser, an independent or independent adjusting company owner I can truthfully say I never had a problem with the upper management of insurance companies on what they say they want for the customer, but as you went down the food chain something was lost in the interpretation and what you heard in the board room was not what was practiced at middle management level and on the street. Many of these that wanted to practice “heroism” or “look what I can get away” with so they would get promoted or get their raise.
It should not be an adjuster’s job to “take care of” a shop. The damage to the vehicle should stand on its own legs…it either has it or it doesn’t. Conversely no shop should have to take care of an adjuster just so he makes his numbers. The repair facility though should be willing to do the little things that it takes to document what they need with proper paper work so that the adjuster working with them can have more than a story to show his superiors to justify what he has done. If they help each other [that might be called fraternization though and frowned on by management] with the process might things not go better? In over 43 years I have seen this happen very few times.
I do have a very large problem with his paragraph though where he states;
So I would ask folks here, do you have two different estimates in your shop? Is your primary concern to make sure you leave no money "on the table" or that you write a fair sheet because you know that adjuster is fair is just trying to do his job and takes care of you? Are you the shop that the adjuster can extol the virtues of or says "I'll do my best to get an agreed price with them". It's up to you.
I will answer that by saying that in the shops I consult with there is one estimate and that is one to fix the vehicle. Now that has to be tempered with the statement it does not matter who writes the estimate or how good he is there will many times be a supplement (unfortunately it is a part of life none of us like). Many shops I know have quit trying to match line for line insurance company estimates because of the amount of time and people it takes to do this task plus the instructions the adjusters have. Would you believe one shop has shown where his people were wasting 3.5 hours per R.O. attempting this redundant process? These shops have gone to a system of where a damage report is prepared based on their findings and disassembly and this is what the bill will be unless there are hidden damages, which the adjuster will have an opportunity to inspect and document. They leave the line for line balancing act up to those who seem to have the time, the insurers. This answers the “two estimate accusation” one car one estimate.
Yes it is my primary concern as a consultant to see that a repair facility gets paid for all the needed operations as well as not included items that are required to repair the vehicle. Shops which do these not included procedures get paid for them as they justly deserve. I personally abhor shops who list procedures that are legitimate just for the adjusters and then when repairs are done they have not done those procedures. They deserve what they will get in the long run.
Contrary to your unspoken accusations above a shop may prepare an estimate that lists all the procedures needed and which would constitute a fair estimate for the repair of the vehicle. There is nothing there that is rocket science, just knowledge of what they are doing. I would think any adjuster who received an estimate that was prepared according to all the listed procedures from a shop would be able to say “I’ll see that your car is properly repaired at a reasonable price”. (without any reservations). Maybe after all these years I am naïve but I think it can be done.
I have trouble feeling an estimate is fair when I am told as an adjuster to leave things off that are known needed operations “because if they don’t get it fixed then we don’t owe them the full amount”. If it goes into one of our shops just write the supplement and if it goes elsewhere pay only what you have to. Above all and most importantly I have great problems with where is this fair to the vehicle owner? Where is that in the policy? Living in Tornado Alley I also have great problems of seeing estimates for storm damage written by insurers or their storm troopers which are as much as 50% less than what is needed to adequately repair the vehicle with the philosophy that they won’t get it fixed so they won’t know the difference. Before anyone says this doesn’t happen we see it every day in storm areas and it has been documented many times. The consumer under his policy is owed for the extent of the damage to his vehicle…it is his choice and his lien holder should there be one if the vehicle is repaired. There is nothing that says his loss should be reduced because of this decision.
In my years as an appraiser and adjuster I have been instructed more than once by companies all in the top 10 that we did work for to do just that. Only one company has never asked me to compromise the integrity of my people or my company in the course of doing my work. Just as an adjuster would feel about working with a shop of this caliber working for them was a pleasure, all they ask is you explain why you did things and if there was a legitimate reason there was no quibbling.
Being in this industry as long as I have I think I have seen it all and all of a sudden something new pops up that amazes me. There are many good people in this industry on all sides and those who cut corners and try to be heroes just make it harder for those who try to do the job as it is suppose to be done. Everyone is expected to pay their full share but no one should have to pay more than their full share. But as long as we have the system that we do I may never live to see this happen. But the good people have to keep trying.

Comment by W. Guy Finley on August 25, 2009 at 10:36pm

I totally hear where you're coming from it's definitely certain this is a two way street that's going off the road at the moment. I really see Collision Hub as a place for the "good guys" on both sides to get together and exchange ideas for getting things back on the road.

Comment by Bill Fowler on August 25, 2009 at 9:55am

It's hard to imagine why any ethical shop would have a problem with you, personally. I always try to work out whether the complaints I have with a deficient estimate are originated with the adjuster or the company he or she works for. Too many times the adjuster is caught in the middle, as you suggest, and is simply trying to comply with company policies, whether they are fair and realistic or not. I would love to have the opportunity to debate face to face some of the ridiculous estimate omissions I frequently see with the people who develop them as "company policy" and leave the adjuster out of it.
These folks have no clue how to actually repair a vehicle because they are hidden away in the safety of their offices and send their subordinates out to do their dirty work for them. Maybe if some of these folks actually read and applied some of the technical information that is available or went into a shop from time to time like you do and see what actually goes on, some of the tension could be aleviated, but it seems like ignorance is something that can be used to one's advantage. There is plenty of information available, but it has been my experience that when it comes right down to the "nut cutting", feigned ignorance and bully tactics are common strategies and are simply a mechanism to reduce costs and increase profits. These tactics are devisive not uniting, so this "working together" thing has little chance of becoming common reality. Tolerating each other is about as good as it will get.
"We don't pay for that", "It's not usual and customary", "We think that's plenty", "It's a cost of doing business", "It's included" and "We don't use the P pages" are all phrases that are music to my ears. These are the phrases we are met with when we point out deficiencies or omissions from estimates and none of them are defensible. These phrases were developed as an avoidance technique, so it is little wonder that some shops would pump up an estimate, anticipating that these terms are what they will be met with when the estimate is arbitrarily reduced, but not all do.
I write a fair estimate and only have one standard. That's why I lock up when one of the companies I affectionately refer to as a "slash and burn outfit" gets hold of one of my estimates and cuts it to pieces. They refer to themselves as "estimate review" companies, but did anyone ever see an estimate that they added to? Sometimes they are done in house and are called a "desk review". Neither revues, they reduce. What would it say about me and the estimates that I write if I willingly accepted these arbitrary reductions to what I submit as being a legitimate estimate? When I have written a fair and conservative representation of the damage, why would I sit still for having someone who has never actually seen the vehicle reduce it without justification, totally at my expense simply to mitigate the damages? If I wrote artifically high estimates simply in anticipation that they would be reduced when the insurance company got hold of them, I would be just as guilty as those I would condemn for arbitrarily reducing them. Maybe that's why some of us come across as being belligerent. How am I supposed to react when an insurance adjuster says, " We don't pay for intrusion beam adhesive. That's included in your paint materials." Am I supposed to believe that anyone really believes that or do I believe that this is simply a tactic that insults my intelligence to avoid paying?
I had a job here last week with an insurance company that is notorious for refusing to pay any mark-up on tow bills or sublet repairs, yet I am expected to not only handle these repairs for free but to expose myself to risk of liability and stand responsible for the integrity of the repair in the event of any future problems. A "check engine" light was on that we stated had no relevance to the collision damage. Because the vehicle owner insisted that did, we were expected to either utilize the time of two of my people in two trips back and forth to the dealer or utilize a wrecker. We were also expected to pay the dealer who would be doing the repair. No consideration was to be made to pay me either for my time or the use of my money; I could only recover cost. I refused and was considered "uncooperative" because I suggested that the insurance company deal with this themselves so they would understand all aspects of what they were insisting that I do. I refused to co-ordinate all this not only for free, but at my expense as I was expected to. Does that make me a bad guy because I refuse to accept responsibility to carry out a process that has no relevance to me? I don't think so.
I empathise with you for being forced many times to do things and enforce policies that you know aren't right and would never ambush you for simply trying to hang on to your job. Your bosses are my problem and it seems like they may be yours, too. I think we all just want to be treated fairly, be treated with respect and be proud of the job we do. That's a hard thing to accomplish these days.

Comment by W. Guy Finley on August 24, 2009 at 7:00pm

I have to say then when the herd gets thinned it's just not the body shops, it happens at insurers as well. It's tougher for those of us on the other side of the fence to comment because while your focus is on you and your business, as it should be, what I say carries across the vast number of shops that I deal with on a regular basis.

I believe there could be an equilibrium in this business one where we could all get customers taken care of and still make profit the trouble is that many don't want to exist in that equilibrium. There's some shops I walk in and I know I will have a great experience, they know that I write a fair sheet, they work with me to help me make my objectives that are under constant scrutiny. They realize I have a job to do, they realize I am audited continually and my monthly and yearly numbers are scrutinized. These are the shops that when I make that first customer contact I say "great, I have a great relationship with them I'm certain we will be able to handle this very smoothly." The customer is pleased, the trauma of going through an accident is reduced and they are put at ease thus reducing anxiety and the calls and other things that come from that anxiety.

There are others that I go to where I know I'm going to get the fight and I don't like to fight with anyone. They have two kinds of estimates -- insurance estimates and customer pays. The customer pay estimates look a lot like the estimates from above, they work with the customer to help reduce the impact but still make a profit on the job. The insurance estimates are not driven by that desire, they're driven by an unrealistic ideal that I have full control of the repair and that no one ever looks at what I do. They write blend on a black car with checking and delam. They complain incessantly about aftermarket when they know darn well you can get OE parts that were damaged and don't fit either. I've said to them "are you trying to get me fired?" and they laugh and say the company would never do that. I wonder if they will stick to that when I'm replaced with a kid fresh out of college who went to a class for two weeks to write estimates and really doesn't care about a relationship with you he just wants to keep his job.

So I would ask folks here, do you have two different estimates in your shop? Is your primary concern to make sure you leave no money "on the table" or that you write a fair sheet because you know that adjuster is fair, is just trying to do his job and takes care of you? Are you the shop that the adjuster can extol the virtues of or says "I'll do my best to get an agreed price with them". It's up to you.

No comment on DRP. :)

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