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New England Automotive Report
2018 MEMBERSHIP APPLICATION MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
As a member of the Alliance of Automotive Service Providers of Massachusetts (AASP/MA), I will abide by the association’s bylaws and code of ethics. I understand that membership in AASP of Massachusetts is non-transferable, and I must remain current with my dues in order to be a member in good standing. I understand that if I discontinue my membership that I must immediately cease using any association promotions, logos or materials. Additionally, I understand that as part of my AASP of Massachusetts membership, I will receive New England Automotive Report, the official publication of AASP of Massachusetts, faxes, emails and other mailings.
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PLEASE COMPLETE THIS MEMBERSHIP APPLICATION AND RETURN IT WITH PAYMENT TO AASP-MA OFFICE. 12 Post Office Square, 6th Floor • Boston, MA 02109 Phone: (617) 574-0741 | Fax: (617) 695-0173|ckane@aaspma.org As required by the U.S. Tax Code, AASP of Massachusetts, Inc. informs its members that 75% of the dues paid to the association are tax deductible. The remaining 25% is allocated to legislative activities and is not tax deductible. New England Automotive Report
February 2018
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February 2018 • Volume 16, No. 2
CONTENTS
DEPARTMENTS PRESIDENT’S MESSAGE by Molly Brodeur 8 | Getting Your Money’s Worth NATIONAL NEWS by Kristen Dalli 16 | MA Vendors & Shops Get Ready for Another Exciting NORTHEAST® LOCAL FEATURE by Joel Gausten 30 | ADALB Recap: Inside the New Partial
26
Refinish Advisory Ruling LEGAL PERSPECTIVE by James Castleman, Esq. 39 | How to Get Paid for Following OEM Repair Procedures: Part 2 of 2
FEATURES 35
NATIONAL FEATURE 22 | The Industry’s Voice Prevails: Inside CCC’s Secure Share U-Turn
by Joel Gausten
INDUSTRY ADVICE 26 | Ask Mike by Mike Anderson
TECHNICAL FEATURE
ALSO THIS ISSUE 5 | AASP/MA MEMBERSHIP APPLICATION 13 | AASP/MA SPONSOR INFO 50 | INDEX OF ADVERTISERS
35 | What You Must Require from Your Estimators by Larry Montanez
New England Automotive Report
February 2018
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PRESIDENT’S MESSAGE
Getting Your Money’s Worth MOLLY BRODEUR
Your time is valuable! It takes a lot out of production to keep on top of advancing technologies and stay committed to following the OEM procedures on each and every repair. It’s important to remember this when it comes time to do your billing. In this business – as in many – your time is money. You shouldn’t be taking on the additional burden of eating those expenses. You pay to access these sites and, in turn, properly repair cars. You should be getting paid to perform that job – and everything it entails. The next time you enter your credit card on another OEM’s website – or see your receipt from a recent OEM subscription – think about this message and consider billing for the money you deserve.
With a new year underway, there’s no better time to take stock of your business and see what’s been working, what needs more attention and what you can do on a daily basis to run the most effective operation possible. Something I’ve been paying particular attention to lately is appropriately billing my customers for the cost of OEM subscription sites – and my time. If the John Eagle case taught us anything, it’s that not following the OEM guidelines can have dire consequences – including a $31.5 million verdict against a shop. To ensure that every car is repaired the way the manufacturer designed, you need to be sure that all of your OEM site subscriptions are up to date. You also need to incorporate those subscription fees into your customers’ bills. That information doesn’t come free to you, and it shouldn’t be a cost for you to absorb. When all is said and done, your customer’s invoice should not only reflect the time you spent working on their car, but it should also take the cost of accessing OEM content into consideration.
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MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
AASP/MA PRESIDENT MOLLY BRODEUR is the Chief Operating Officer of Al Brodeur's Auto Body in Marlborough, MA. She can be reached at (508) 485-1082 or molly@albrodeur.com.
G
L
A
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AU M TIVE AUT T TI TIV STAFF
AASP/MA EXECUTIVE COMMITTEE
PUBLISHER
CREATIVE DIRECTOR
Thomas Greco - thomas@grecopublishing.com
Lea Velocci - lea@grecopublishing.com
SALES DIRECTOR
EDITORIAL/CREATIVE COORDINATOR
Alicia Figurelli - alicia@grecopublishing.com
Kristen Dalli - kristen@grecopublishing.com
EDITORIAL DIRECTOR
PRODUCTION
Joel Gausten - joel@grecopublishing.com
Donna Greco - donna@grecopublishing.com
PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963
PRESIDENT
TREASURER
Molly Brodeur
Kevin Gallerani
VICE PRESIDENT
LEGISLATIVE CHAIR
Adam Ioakim
Peter Langone
SECRETARY
IMMEDIATE PAST PRESIDENT
Gary Cloutier
Paul Hendricks
AASP/MA STATEWIDE DIRECTORS COLLISION DIRECTOR Rob DelGallo
AASP/MA DIRECTORS www.grecopublishing.com New England Automotive Report is published monthly by TGP, Inc., 244 Chestnut Street, Suite 202 Nutley, NJ 07110. Distributed free to qualified recipients; $48 to all others. Additional copies of New England Automotive Report are available at $5 per copy. Reproduction of any portions of this publication is specifically prohibited without written permission of the publisher. The opinions and ideas appearing in this magazine are not necessarily representations of TGP Inc. or of AASP/MA. Copyright © 2018 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com
Darlene Andrade
Kevin Kyes
Matthew Ciaschini
Frank Patterson
Alex Falzone
Mike Penacho
Joshua Fuller MASSACHUSETTS
WWW.AASPMA.ORG
BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
8 February 2018
New England Automotive Report
AASP/MA EXECUTIVE DIRECTOR Anne Lynch 12 Post Office Square, 6th Floor Boston, MA 02109 Phone: (617) 574-0741 Fax: (617) 695-0173 Email: alynch@lynchassociates.com
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New England Automotive Report
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New England Automotive Report
February 2018
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12 February 2018
New England Automotive Report
AASP/MA ASKS YOU TO PLEASE SUPPORT
in Massachusetts February 6, 2018 Blueprinting Process & Damage Discovery Assabet Valley Technical High School (Marlborough) February 7, 2018 Replacement of Steel Unitized Structures Bay Path Regional Vo-Tech High School (Charlton) February 12, 2018 Adhesive Bonding Putnam Vocational Technical Academy (Springfield) February 13, 2018 Corrosion Protection Northeast Metropolitan Regional Vocational School (Wakefield) February 21, 2018 Color Theory, Mixing Toners & Tinting Enterprise Rent-A-Car (Burlington)
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New England Automotive Report
February 2018
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14 February 2018
New England Automotive Report
New England Automotive Report
February 2018
15
[NATIONAL] NEWS by Kristen Dalli
MA Vendors & Shops Get Ready for Another Exciting NORTHEAST® Every March, the Meadowlands Exposition Center in Secaucus, NJ gets flooded with thousands of automotive enthusiasts from around the world for the NORTHEAST Automotive Services Show. Conveniently located just a few hours from Massachusetts, this year’s show (hosted by AASP’s New Jersey affiliate, AASP/NJ) is scheduled for March 16-18 and is shaping up to be the biggest weekend in its 41-year history. Featuring exclusive seminars, the industry’s most sought-after vendors, a brand-new second level – the NORTHEAST Pavilion – and so much more, NORTHEAST 2018 has something for every sector of the automotive industry. Massachusetts-based Nitro Innovations will be returning to NORTHEAST in 2018 and views being at the show as a prime opportunity to engage with local customers. “The crowd there is what first attracted me to be part of it – everybody’s looking to do business,” offers General Manager Tim Lewis. “It’s just the overall professionalism of the people involved that makes it worthwhile and enjoyable. What’s great is it’s right in our backyard, and we get to see a lot of local customers. We’re definitely looking forward to this year.” American Honda Motor Co. will be making its sixth consecutive NORTHEAST appearance as the auto
16 February 2018
manufacturer continues to show its unwavering support for the show. “The foot traffic and high level of engagement from the attendees makes this show very impactful,” explains Honda Assistant National Manager Rossana Alvarez. “The attendees at NORTHEAST seem quite engaged and invested in their ventures and in the industry.” Honda will once again be holding its Lunch and Learn sessions over the course of the weekend for ProFirst Certified shops. “This year marks the third consecutive year we’ll be bringing these exclusive sessions to our ProFirst Certified network. Following and building on the standards previously set, this year’s sessions are shaping up to be ‘can’t-miss’ events. We have an unprecedented five guest speakers available for ProFirst Certified shops to hone their business skills in the ‘certified’ environment. The sessions will be spread out over two mornings and focus on topics of relevance to our ProFirst Certified shops.” In addition to area vendors, AASP/MA members have consistently made the effort to attend NORTHEAST every year as a means of keeping their businesses up to date and staying on top of the latest industry trends and technologies. Dan Lamontagne of White Lightning Auto Body in
New England Automotive Report
OFESSION PR EPAIRER AL R
ED
U C AT I O N PROGRA M
Williamsburg has been attending NORTHEAST for the last four years and takes a particular interest in the seminar offerings in addition to the wide variety of products he can take back to his shop. “At NORTHEAST, you get to see all the latest and greatest technology – see it, touch it, ask questions about it and, if you’re interested, purchase it – and usually at a better price. I also like that there’s different services and supplies that are available to the trade. If you don’t know about something, you get to see it up close at the show. “One of the main reasons I keep coming back to NORTHEAST is that I love all the seminars. I usually take quite a few of them, and there’s always great information at those,” he adds. Overall, Lamontagne thinks it’s incredibly beneficial to make the trip from Massachusetts to attend NORTHEAST. “It’s important for shops around the country to stay abreast of what’s going on. If you care about fixing cars the right way, you definitely need to go see what’s out there to help you do it.” Jim Marshall of Marshall’s Auto Body Experts in Billerica shared similar sentiments, adding that he’s been busy trying to get as many of his colleagues to go to NORTHEAST as possible. “The education and the tools are where I spend my majority of the time at the show,” Marshall explained. “I sign up ahead of time – last year, I brought my manager with me – and I’ve seen the value in attending from the first time I went. “Last year, I was able to take half a dozen courses. The training piece is something that’s ever-changing. You have the opportunity to go to one single venue and take a couple seminars from key industry people – it’s incredibly beneficial. Both times I’ve been there,
New England Automotive Report
February 2018
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[NATIONAL] NEWS I’ve really enjoyed it. The people are tremendously hospitable, and I’ve been sharing the good word with as many shop owners as I can.” As previously reported in New England Automotive Report, NORTHEAST 2018 has several new features for attendees, including the allnew NORTHEAST Pavilion – housing the debut of the Washington Metropolitan Auto Body Association (WMABA) – presented educational series, “Collison P.R.E.P. (Professional Repairer Education Program).” In addition to educational seminars, the Pavilion will house a gourmet food court, over 100 additional exhibitor booths and much more. “I’ve been involved with NORTHEAST for over 30 of its 40 years,” says AASP/NJ Secretary and NORTHEAST Show Manager Thomas Greco, “and this year will be the most challenging and exciting NORTHEAST by far. “Almost 10 years ago, we made the decision to move back to New Jersey and into the Meadowlands, and that proved to be extremely successful. It
Overall, Lamontagne thinks it’s incredibly beneficial to make the trip from Massachusetts to attend. “At NORTHEAST, you get to see all the latest and greatest technology – see it, touch it, ask questions about it and, if you’re interested, purchase it – and usually at a better price. I love all the seminars and if you care about fixing cars the right way, you definitely need to go.” took NORTHEAST from a typical local show to where it is now – the secondlargest show of its kind in the country. Now with the partnership with WMABA and the Pavilion, we’re ready to reach even higher. It’s an exciting time for the automotive repair industry in this part of the country.” As for partnering with WMABA, Executive Director Jordan Hendler has some news to share regarding some of the familiar faces NORTHEAST attendees can expect to see in Collision P.R.E.P. classrooms. “We’ve already secured several very knowledgeable and wonderful speakers. Todd Tracy [the winning attorney in the John Eagle case in Texas] will also join us as a presenter, which we’re very excited about – and I’m sure a lot of NORTHEAST attendees will be excited about, too. There are many other big names in the industry to round out
the course offerings and bring our attendees not only the most current and relevant topics, but make sure they’re getting the information from the people in the industry who know it the best. National-level education presented in our East Coast market – everyone needs to be there!” With only a few weeks standing between you and the weekend of the show, the time is NOW to secure your badge and book your hotel! AASP/NJ has a number of agreements with area hotels that keep you within walking distance of all the action – which you’ll definitely want to experience for yourself! To register for NORTHEAST (and for more information on this year’s event), visit aaspnjnortheast.com. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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New England Automotive Report
New England Automotive Report
February 2018
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20 February 2018
New England Automotive Report
[NATIONAL] FEATURE by Joel Gausten
THE INDUSTRY’S VOICE PREVAILS: Inside CCC’s Secure Share U-Turn It was the Christmas present that many in the industry hoped to receive. As last month’s issue of New England Automotive Report went to press, CCC issued an announcement proclaiming that it had done away with the $0.50-per-transaction fee associated with its Secure Share data platform. The company credited persistent feedback from customers and industry representatives for the decision, which has the potential to save tens of millions of dollars in costs to app providers and other end-users that some had speculated would have eventually been passed on to body shops. As discussed in our previous issue, Secure Secure aims to move end-users to the Business Management Suite (BMS) standard for the transfer of estimate data. BMS was created by the Collision Industry Electronic Commerce Association (CIECA) to better protect the data generated in collision repair estimates by allowing shops to select which encrypted data is shown to a selected recipient. Under the current Estimate Management Standard (EMS) used in the industry, app providers have access to full unencrypted estimate data and personal customer information. In addition to removing the fees for Secure Share, CCC’s announcement also indicated changes to the Secure Share user agreement, including revisions to its termination language. The updated language specifies the causes for termination – especially with 22 February 2018
respect to sending data to a downstream application provider or anyone else outside permitted use. In addition, the agreement now provides a “cure period” to allow an app provider to address issues to avoid being removed from the platform. Interestingly, the revamped Secure Share agreement will leave the door open for those users who still wish to transfer data using EMS. This is a substantial change from CCC’s original plans to completely sunset this standard by this spring. “We believe still today that Secure Share is the most secure solution available in the industry,” explained Mark Fincher, vice president of market solutions at CCC, in a call with New England Automotive Report shortly after the announcement. “However, we’ve determined that we need to provide our customers in the industry with choice to be to able to prevent any disruption to workflow, so we’re going to maintain EMS.” Aside from a nearly 180-degree change in positioning from CCC on how Secure Share will be offered to the market, another notable takeaway is that the industry can effect change when it speaks up. CCC credited revisions to the proposed structure and business model to the communication directly presented by those in the field who would ultimately utilize it. The discussion of Secure Share has taken a front seat in industry discussions since CCC first announced the development
New England Automotive Report
of the system in 2015, and those talks have seemingly been a major influence in its new conditions. “CCC’s decision to alter its position on its Secure Share offering is a win for the industry, and they are due the recognition for ultimately listening to the concerns presented by those in the industry,” comments Society of Collision Repair Specialists (SCRS) Executive Director Aaron Schulenburg. “The end result of the year-plus worth of discussions is probably one of the greatest demonstrations of the importance of industry dialogue and representation and the impact that both can have. Many who would have been affected will likely never fully grasp the full impact the proposed transition was going to have on their business, but the resolution by CCC to step back, listen and change its course was a great way to close out the year.” One of Secure Share’s earliest and most vocal critics, ComputerLogic CEO Rick Palmer went as far as to call the program “ransomware” during a recent Collision Industry Conference (CIC). Like many, he took issue with CCC’s perceived intention to monetize estimate data. Now that CCC has apparently reversed its decision to charge fees to use the system, Palmer has a far more positive view of the company’s dive into the world of BMS. “The press release looks good on paper. It sounds good, and it is very encouraging to me that they’re going to extend EMS indefinitely. The fact that
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New England Automotive Report
[NATIONAL] FEATURE they’re not going to be charging for the transmission of the BMS estimates is very favorable.” While he is “pleased and encouraged” by CCC’s plan to extend EMS and make BMS free via Secure Share, he adds that he has yet to receive and review the revised user agreement that he is expected to sign to utilize the service. “I’m excited about it, but I want to see what the ‘new’ agreement looks like before I comment any further.” With data privacy quickly becoming 2018’s most critical collision repair-related issue, Palmer predicts that BMS will become the prevailing industry standard within a year’s time. “The biggest pro of BMS is that you’re no longer just dumping all the data to parties that don’t need that information. It is a way to make things simpler and to give some people a little more of a comfort factor.” With CCC moving forward as the first Information Provider to make a BMS option available to the industry – and without fees to app providers – the comfort that Palmer speaks of appears to be a greater possibility than ever before. Of course, news of CCC’s move away from implementing transaction fees still leads some to question exactly how – and from where – the company’s investment to build the Secure Share platform will be recouped. When approached on the matter, Fincher was adamant that the system will exist without a financial commitment from end-users. “We’ve said all along that this was never about the revenue for us. There was some wild speculation as to what the revenue opportunity was for this, and [that speculation] was absolutely incorrect and false. This has never been a significant revenue opportunity for us; we did feel though that app providers were benefitting from this solution, and we felt that we had the right – as a software company – to be able to recoup our investment…With that said, we believe that Secure Share is the right thing for the industry. We’re
willing to make sure that we support our customers, [and] we’re willing to absorb that cost. We will never charge for Secure Share; we’re saying that publicly.” Reflecting on these recent events, AASP/MA President Molly Brodeur is encouraged by this clear example of the collision repair community’s ability to effect change. “This is a huge win for the collision industry. It stood to reason that
repairers were likely to take the biggest hit with the cost being passed down to the end-user. It remains to be seen how Secure Share will formally roll out and what kinds of unexpected changes we may encounter, but as always, AASP/MA will continue to advocate for our members and disseminate information as soon as it becomes available.” MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
New England Automotive Report
February 2018
25
[INDUSTRY] ADVICE
ASK MIKE
How does being an association member most impact a person’s career and experiences in the industry? This month, we “ASK MIKE”
Do you have a question for Mike? Contact New England Automotive Report Editorial Director Joel Gausten at joel@grecopublishing.com or (973) 600-9288, and we’ll ask him in a future issue.
same dedication, passion and drive
about some of the benefits he’s
that you do, they wouldn’t be working
derived as an active and longtime
for you—they’d own their own
member of an industry association. We
businesses.’ That just really resonated
at New England Automotive Report
with me. I think that one statement really sums up what I see as the value
hope you find this following exchange
in an association. It gives you the
useful, and we encourage you to
ability to network with people, and take
reach out to us if you have a question
advantage of the wisdom of those who
for Mike on this or any industry-related
have been around for a long time.
matter that he can answer in a
Talking with them can keep you from
subsequent issue.
making mistakes.
New England Automotive Report:
Mike, you have a vast history as a
member of your local association,
WMABA. How did deciding to be an association member most impact
your career and experiences in the collision repair industry?
MA: I first got involved in WMABA
through Sheila Loftus, who was the executive director at the time. She kept on my dad to join the association, but he said, ‘I’m not going to join unless you help develop some kind of industry standards.’ At that time, WMABA came out with some standards, where members agreed to do quality work that was warrantied. That’s why my dad decided to join. The fact that the association stood for quality was a big thing for us. My father joined and started going to
26 February 2018
There’s also encouragement to be meetings, and I would go to all of them. When I joined WMABA around 1986, I started getting involved. I eventually joined the Board and took on the role of secretary and then vice president. One night I went to a meeting after being really frustrated with an employee that day. A fellow member named Jerry Dalton was there, and I sat next to him during the dinner part of the meeting. He asked me what was wrong, and I replied, ‘Man, sometimes employees stink! I’m so sick of this stuff.’ He started laughing. I said, ‘I don’t think it’s funny, Jerry. What’s so funny to you?’ He said something very profound to me: ‘Mike, if everybody had the
New England Automotive Report
gained from being with an association. You meet people who have sympathy for you because they’ve walked a mile in your shoes. Two of the best friends I ever had in the association were [former Board members] Mark Boudreau and Pete Peturrson. I always liked that we could commiserate with and encourage each other, and it was just nice to know that you had someone who could relate to your pain. Education is another important piece of being in an association. The seminars they hold and the publications they distribute to inform members of what’s going on are extremely important. A lot of times, shops don’t have the manpower or can’t afford to go to major national industry events like SEMA or NACE.
Associations like AASP/MA can still
something with an insurance
keep you in touch with those issues.
company out of fear of retribution.
Members can read New England
Automotive Report and know what’s going on around the country even if
they don’t have the time and financial resources to go to these things
Well, you can reach out to AASP/MA and the association can be that voice for you. They can call people out so you don’t have to bring personal attention to yourself.
with the first aluminum course, WMABA was the first association to bring that training to the United States. It was standing-room only. Another important part of associations is what they do politically. Back in the day, we didn’t collect taxes on paint and materials in Virginia. We went to the office of Harry Parrish, the delegate down in Manassas, and we explained the issue to him. Pete Peturrson just took charge of that; he was a one-man band, and we got a law passed that said they couldn’t cap paint and materials. I can go on and on about all the benefits that you get by belonging to an association. One thing I don’t think people take advantage of enough is the benefits offererd by AASP/MA. A lot of times, shops are hesitant to pursue
issues you see shops facing that can be better addressed through participating in an association? MA: The biggest thing with any
association is that you have a point of contact if you can’t find something. If I
themselves.
When I-CAR of Canada came out
NEAR: What are some specific
NEAR: Based on your experiences traveling around the country, what are some things that members of
couldn’t figure out how to section something, I could reach out to
any regional association can do to
AASP/MA President Molly Brodeur
MA: Getting involved and reading
know the answer herself, she knows
get the most out of the experience? their publications. When you get New England Automotive Report or
whatever your publication is, share it with your other team members. Don’t just leave it on your desk or keep it to yourself. Also, you should attend the events your association holds to get and share ideas. You have to get off the sidelines and get in the game. At the end of the day, if you don’t like your circumstances and you want the world to change, you can’t sit around and wait for someone to ride into town on a white horse and save you. You
need to become that guy on the white
and she’ll know the right person to answer that question. If she doesn’t someone who does. Moving forward, I think trade shows will still bring value from an educational standpoint. I think the future will also see more webinars and associations utilizing similar technologies for training. But I think the NORTHEAST Automotive Services Show in New Jersey has really come up in ways that no one has ever seen before, and has been recognized as a really great event. It’s second to none, and that’s a very clear example of what a regional association – in this case, AASP/NJ – can accomplish.
horse who will make a difference.
MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
New England Automotive Report
February 2018
27
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February 2018
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[LOCAL] FEATURE By Joel Gausten
ADALB RECAP:
Inside the New Partial Refinish Advisory Ruling During their December 6 meeting at the Division of Insurance in Boston, the Auto Damage Appraiser Licensing Board (ADALB) voted to issue an Advisory Ruling to reinforce current state regulations that apply to partial refinish in the appraisal process. Initially proposed by ADALB Board member and collision repair facility owner Rick Starbard (Rick’s Auto Collision; Revere), the Advisory Ruling aims to draw attention to 212 CMR 2.04(1)(e), which states (in relevant part) that no appraiser “shall modify any published manual [i.e., Motors, Mitchell or any automated appraisal system] without prior negotiation between the parties.” The Advisory Ruling declares that partial refinishing of a damaged part is considered to be modification of a published manual and may not be included on an appraisal without prior negotiation. Failure to comply with this Advisory Ruling could result in fines and penalties as provided by law. The vote to pass the Advisory Ruling came after considerable debate among Board members, with insurance industry representatives Joseph Coyne, Jr. (Home & Auto Appraisal Bureau, Inc.) and Lyle Pare (Plymouth Rock Assurance) often clashing with Starbard and fellow auto body representative Bill Johnson (Pleasant Street Auto, South Hadley/Belchertown) in their opinions on the motion’s appropriateness and relevance. Pare and Starbard sparred over the issue, with Pare arguing that issuing an Advisory Ruling of this nature would hinder insurance appraisers’ ability to negotiate claims: Pare: “[Partial refinish] is something that’s been done in this industry forever.” Starbard: “Right, and we’ve had complaints forwarded here. We’ve seen it misused to the point where we’ve seen somebody be paid negative time.” Pare: “The key word is ‘misused’ in that case.” Starbard: “Well, I think any use of it is really misuse without prior negotiation.” Pare also expressed concern that “in the industry, [the Advisory Ruling] is going to be perceived as, ‘No, you can’t do that.’” Johnson countered that statement by stressing that the notice does nothing to alter existing state regulations. “It’s just reinforcing what the CMRs say…This Advisory Ruling is not changing the CMRs; it’s to clarify
[them]. The CMRs already say that you cannot modify a published manual; [that manual] already says that a damaged door is full paint time, so we’re not changing anything. All we’re doing is clarifying and reinforcing what was already there. “Negotiations can still occur,” he added. “If the two appraisers agree to a partial or a lesser amount, they can. It’s already in the CMRs that the manuals cannot be altered without negotiations. We’re not changing anything; all this Advisory Ruling is doing, in my eyes, is clarifying what the CMRs say and what the rules already are.” “We’re clarifying the fact [that the manuals] shouldn’t be changed [without prior negotiations] – on this particular issue especially, because we’ve had complaints filed,” commented Starbard. “My phone rings off the hook from shops calling me saying, ‘This guy’s trying to give me partial refinish for this.’ That’s why we brought that up to issue as an Advisory Ruling.” Starbard argued that insurer opposition to the motion stemmed from “a misunderstanding between what [are] included operations in paint time and what are included operations in clearcoat time.” He later added, “When you cut the paint time and are paid for full clear, clearcoat labor only includes [what it takes] to mix the paint, spray it over the panel and clean the gun…If a shop is going to prep the whole panel, tape the whole panel, do all the R&Is, the cleaning procedures [and] make an undetectable blend in the basecoat and then clearcoat that whole panel, the labor operations are actually more than they would be if it was full-time left alone.” Coyne opined that the proposed Advisory Ruling was a solution looking for a problem, stating that the Board had only received two complaints on the partial refinish issue in the last four years. “Why should we have an Advisory Ruling if it’s already in the regulations? Why do you have to reinforce it?” Johnson remained firm in his position. “Advisory Rulings [are] supposed to clarify the CMRs. You can see the discussion we’re having. Can you imagine the poor appraiser out in the street trying to interpret this? [Coyne] just admitted it’s in the regulation, so where’s the problem with having an Advisory Ruling?” With the votes among the four Board members split down the middle, ADALB Chairman Gilbert Cox broke the tie by voting in the affirmative. MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
30 February 2018
New England Automotive Report
New England Automotive Report
February 2018
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New England Automotive Report
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New England Automotive Report
February 2018
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New England Automotive Report
[TECHNICAL] FEATURE By Larry Montanez III, CDA
A lot is wrong in the collision repair industry, but much of it you cannot control or change unless you alter the way you think. You need to focus on what you actually have control over, which is your business and how it operates. The biggest issues facing a repair facility are investment capital; credit issues; marketing capital; technician procurement and retention; Repair Order (R.O.) severity; quality and efficiency; and claim negotiation misunderstandings. These all take time to achieve, implement or perfect, but some can be easier to accomplish than others. RO severity, quality and claims negotiations can be corrected in a more reasonable amount of time than some of the other items. The most common cause for most of the issues in a repair facility stem from those who write estimates. Some the estimators in the US (including some who are also owners) lack the training, education and general knowledge necessary to do the job correctly. Some of them also lack motivation and enthusiasm. In this article, I will break down the possible issues and inadequacies of the estimators in your facility and help you evaluate them.
Identity Crisis Estimate: Verb: Roughly calculate or judge the value, number, quantity or extent of. Noun: An approximate calculation or judgment of the value, number, quantity or extent of something. “Estimator” is a poor term or title for the person who controls or has such great influence over your profits. It’s like calling Gordon Ramsey, Emeril Lagasse and Bobby Flay short-order cooks. Does the person you have in the office determining the cost you are charging “roughly calculate” or “make an approximate calculation” of that amount? How long would you stay in business if they did? Rather than “estimator,” a better term would be “damage assessor:” A person who is knowledgeable in a particular field and is called upon to evaluate and calculate the price, cost or value of something and offer advice on options. However, a damage assessor must be knowledgeable, and that requires training, education and research. This means reading and studying – not assuming.
New England Automotive Report
February 2018
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[TECHNICAL] FEATURE Training Requirements Where, how and from whom do you get this training? This is a difficult answer, as there are not many options, and many are either not comprehensive, too basic or too advanced. I-CAR is one place to start for the basics, but it also depends on who is teaching the courses. However, some of the online courses are beneficial and consistent. Another option is to go to one of the three or four schools that teach estimating, but those are usually too general and geared towards the makebelieve “insurance compliance” or insurer-friendly ways. Mike Anderson (Collision Advice) and I have classes and workshops, but those might be too far advanced for beginners – and even some intermediate students – due to a fundamental lack of foundation training. Currently, you can use a combination of the above and some on-the-job training. The major issue with on-the-job training is the person performing it (as well as the mindset in the shop). Many shops are misled with incorrect information about how much power insurers have over repairs, or they are misguided based on numbers and money. Collision Hub might have the answer, and they will soon launch a series of online training videos. These will be self-paced learning videos that allow users to pay per view, and they cover a wide range of topics (including a damage analysis and report writing [estimating] series). This online series should assist in speeding up the learning process and can be accessed as a reference in the future. The launch should be in the first quarter of this year.
36 February 2018
Knowledge of Rules and Regulations A large percentage of facility owners and shop estimators have no knowledge of their state laws, rules and regulations – even those for their own protection. Every damage assessor must look up and read the laws in their state – not only the insurance laws, but also the consumer protection and unfair claims settlement practice acts. Each repair facility should have a copy of each insurance company policy for their state, as it would be extremely helpful
Now who is the bad guy in the customer’s eyes? The shop, right? They are ripping off the insurer and the customer. Perception is everything until someone explains the truth. to solve issues with insurance adjusters on the spot. How many times are you told their position is in the policy? How many times have you challenged that idiotic and false statement? How to Obtain Repair Information The only correct and accurate place to obtain the OEM repair procedures and protocols is at the OEM’s technical website. Third-party systems and even integrated estimating database programs are not as up to date as the OEM sites and, in many cases, may be lacking information. A damage assessor should first try the I-CAR RTS website (rts.i-car.com) and read the updates for that OEM. From there, they can
New England Automotive Report
click the link to the OEM technical repair information. Once you make a username and password and pay for access, you can download or save the repair information. Additionally, you will need to add the cost of the OEM site and labor time to the damage report (estimate). This must be performed on each and every repair. The damage assessor must also read through the information and determine the additional required operations that must be added to the estimate. The damage assessor must also review the mechanical and electrical manuals for the required relearns for the Advanced Driver Assistance System (ADAS), if the vehicle is so equipped. How to Explain the Repair Process and Payment to Consumers This is the easy part, but it does take practice to perfect it. You should give the customer an explanation they can understand. For example, use something they are familiar with, such as a hospital insurance claim. Ask them, “Have you ever been to the hospital for a procedure and your medical insurance covered it? Did you ever get a letter a few weeks later from the doctor or hospital claiming your insurance company did not pay for a third MRI or fourth X-ray, but they are only charging you what they were charging the insurance company? Who are you angry with?” I am sure we can all agree it would be the insurance company—not the doctor or hospital. Common sense tells you that the doctor cured you, made you feel better and/or saved your life and has years of schooling and training on medical procedures. The insurer and claim
representative have ZERO training on medical procedures – only some convoluted idea of what costs should be. The doctor is the good guy, and the insurance company is being unreasonable. You did pay your premiums for coverage, right? Now let’s switch the scenario to the collision repair business. A customer’s vehicle is involved in a collision and the insurer refuses to pay them for what the shop is charging. Now who is the bad guy in the customer’s eyes? The shop, right? They are ripping off the insurer and the customer. Perception is everything until someone explains the truth. Damage assessors must explain this to customers, but they should add that they are there to help. Unlike the doctor or hospital, the damage assessor can assist the vehicle owner in fighting the insurer. I hope this article has opened your eyes to the issues not only within our industry, but maybe within your own facility, too. Look for more in-depth articles on these topics in the future.
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Larry Montanez, CDA is co-owner of P&L Consultants with Peter Pratti Jr. P&L Consultants works with collision repair shops on estimating, production and proper repair procedures. P&L conducts repair workshops on MIG & Resistance Welding, Measuring for Estimating and Advanced Estimating Skills. P&L also conducts investigations for insurers and repair shops for improper repairs, collision reparability and estimating issues. Larry is ISO 9606-2 Certified for Audi and Mercedes-Benz and is a certified technician for multiple OEM collision repair programs. P&L can be reached by contacting Larry at (718) 891-4018 (office), (917) 860-3588 (cell) or info@PnLEstimology.com. New England Automotive Report
February 2018
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New England Automotive Report
[LEGAL] PERSPECTIVE by James A. Castleman, Esq.
How to Get Paid for Following OEM Repair Procedures: Part 2 of 2 Last month’s Legal Perspective addressed why collision repair shops in Massachusetts need to follow OEMspecified repair procedures when repairing damaged vehicles. The conclusion of the article stated that to do otherwise puts repair shops at tremendous financial risk, jeopardizes their customer’s safety and possibly violates Massachusetts law. That’s all well and good, but if you are going to insist on following OEM procedures (as you should) and your customer’s insurer resists paying for them, then how are you going to get compensated to do this work? While I cannot guarantee success in this regard, the following is a list of strategies that you should consider: (1) First and foremost, start by letting your customers and their insurers know what your policy is going to be regarding OEM procedures and why you are adopting that policy. While it is each shop’s individual choice as to what to do, if you decide that you are going to insist on always following OEM procedures and charging for them, then you need to put that in writing and let the world know about it. You may want to conspicuously post a sign in your reception area. You may also want to have a handout to give to customers and appraisers who come to your shop. You may want to send a mailing to all insurers you deal with, and you may also want to send it out to customers whose cars you have repaired in the past. You could also do print or broadcast advertising to let the marketplace know what you are doing. Decide what strategy (or combination of strategies) works for
you, and make sure that you do it. In my opinion, it is much more effective to state your reasons for your policy rather than just put it out there. What your particular reasons are (and how you express them) is up to you, but you certainly may want to let people know about the holding of the Seebachan case (i.e., that a shop – John Eagle Collision Center in Texas – was held liable for $31.5 million in damages for personal injuries caused by non-OEM repairs they performed). You may also want to point out that the case has sent shockwaves throughout the industry, and that this has made you (and maybe your own shop liability carrier) aware of the potential liability that you may have
for not following OEM procedures. Further, you may want to make the point that car manufacturers have spent millions of dollars in engineering the unibody construction and safety systems in today’s cars. You may also want to add that OEM repair procedures are designed to preserve the integrity of those systems and provide maximum safety protection for vehicle passengers. If you are going to be a true professional, then you want people to know that you are going to utilize OEM procedures in order to perform professional repairs and ensure the safety of your customers. Additionally, and particularly when dealing with insurance
New England Automotive Report
February 2018
39
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New England Automotive Report
February 2018
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New England Automotive Report
[LEGAL] PERSPECTIVE appraisers, you may want to remind people of the regulatory obligation to specify repairs necessary to return a damaged vehicle to pre-accident condition – which is required of appraisers by the Auto Damage Appraiser Licensing Board (ADALB). Only OEM procedures are going to allow you to reach that goal. You may want to disseminate copies of articles about the Seebachan decision or possibly Part I of this article from last month’s New England Automotive Report. If you expect to be able to change the way that repairs are performed and how they are paid for, then you have to educate everyone involved in the process as to why the change is needed. (2) If you want to get paid for OEM procedures, then make sure that you use them in all of the repairs that your shop performs. If it is going to be your policy to only utilize OEM repair procedures, then write them into every appraisal and incorporate them into every repair. Do not make exceptions. If you make an exception in one instance, then insurers are going to find out about it and question why you won’t agree to an exception in every instance. Consistency is imperative, and you are likely not going to get paid for OEM procedures in many cases if you do not insist upon using them (and getting paid for them) in every case. (3) If an insurance appraiser and/or adjustor will not agree to pay for OEM procedures, then consider charging your customer for them - assuming that you are not a referral shop for the insurer. This strategy is not for everyone (and it requires you to diplomatically sell this idea to your customer), but it can be very effective. If you are going to do this, then you have to let your customer know well in advance. You also have to be able to convince them that use of OEM procedures is necessary for proper repairs and that you need to get paid to perform them. If done properly (and if a customer is pointed in the right direction), this strategy may actually help you get paid for OEM procedures from your customer’s resistant insurer. After all, if a customer is made to understand the importance of using OEM procedures, then it may be an incentive for them to pick up the phone themselves and call their insurer to insist that they pay for these operations. Even if your customer is not able to get the insurer to pay for OEM procedures, they are more likely to pay out of their own pocket for procedures they believe are necessary to protect their well-being. (4) If an insurer will not pay for OEM procedures, get your customers to assign their rights to get paid from their insurer to you, and then either request arbitration of the claim or sue the insurer for your charges for using OEM procedures. This process has been explained in great detail in other Legal Perspective articles, and AASP/MA members have access to forms that allow a customer to assign their
insurance claim rights to their repair shop. Once your customer assigns their rights to you, it is up to you as to which route you want to take. If you want to request arbitration of the issues (technically invoking the statutory and insurance policy “appraisal” clause – not a true arbitration), then you first must get your customer to assign their rights to you. After that, you must make demand for the appraisal process to their insurer within 60 days of the customer’s filing of the claim. When you make a demand, you need to name a disinterested licensed appraiser to appraise the damage, and the insurer must name their own disinterested appraiser to do the same. The two appraisers name a third appraiser to be the umpire, and an agreement between any of the two governs what the insurer must pay. If you prefer to take the route of actually filing a lawsuit instead (and once you get your customer to assign their rights to you), you can sue their insurer either by using the informal small-claims procedure (which is relatively cheap and quick) or by bringing a full-fledged civil suit (which is neither cheap nor quick). Again, while I cannot guarantee the success of either an arbitration proceeding or a lawsuit, it does seem to me that there is a very legitimate argument to be made that OEM procedures are proper and necessary for correctly and safely repairing auto damage. If so, then there appears to be a very decent chance that you would end up getting paid to perform those procedures in either an arbitration or a lawsuit. (5) If an insurance appraiser will not agree to pay for OEM procedures, then file a complaint against them with the ADALB. ADALB regulations do say that appraisers are supposed to specify parts and procedures needed to restore a damaged vehicle to pre-accident condition. They also say that when writing an appraisal, “manufacturer warranty repair procedures, I-CAR, Tec Cor and paint manufacturer procedures may also apply.” ADALB members know about the Seebachan case, the importance of using OEM procedures and what their regulation says. If an auto damage appraiser is going to keep their license, shouldn’t it be a requirement that they actually follow the law when they write appraisals and also write what is best to protect vehicle owners? Conclusion As explained last month, it appears that collision repairers should always use OEM-specified repair procedures. It is the correct way to repair an automobile, protect the safety of the vehicle owner and shield the shop from potential financial ruin. That said, getting paid to perform those procedures is a different matter. However, if you follow the strategies described in this article, you may very well end up getting paid to perform them every time. Next month: After the Seebachan case, should you ever use aftermarket parts? MASSACHUSETTS BUILDING THE SUCCESS OF THE AUTO REPAIR INDUSTRY
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New England Automotive Report
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New England Automotive Report
Imperial Ford ................................................33 Ira Subaru ......................................................13 Ira Toyota of Danvers....................................12 Kelly Automotive Group ..........................IBC Kia Group ......................................................47 Linder’s, Inc. ................................................50 Long Automotive Group ..............................17 Mazda Group ................................................42 McGovern Chrysler Jeep Dodge Ram ........18 Mercedes-Benz of Shrewsbury ....................26 Mopar Group ................................................32 Nissan Group ................................................40 PPG ....................................................................3 Robertsons GMC Truck ................................38 Sarat Ford Lincoln ........................................45 Sentry Group..................................................34 Spanesi ............................................................49 Subaru Group ................................................25 Tasca Group....................................................19 Toyota Group ................................................30 Volvo Group ..................................................31 VW Group ......................................................44 Wagner BMW of Shrewsbury ......................26 Wagner Kia of Shrewsbury ..........................26 Wellesley Toyota/Scion ................................45 Wheel Collision Center ................................37