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4 September 2022 New England Automotive Report
EXECUTIVE DIRECTOR’S MESSAGE 6 | Cutting Our Political Teeth by Evangelos “Lucky” Papageorg LOCAL NEWS 12 | A Systematic Disconnect at the ADALB? 14 | Remembering Mike “Mr. MABA” Beal by Alana Quartuccio Bonillo NATIONAL NEWS 16 | Women’s Industry Network Opens 2023 Scholarship Applications VENDOR AFFINITY PROGRAM SPOTLIGHT 18 | Albert Kemperle, Inc. by Alana Quartuccio Bonillo LEGAL PERSPECTIVE 34 | What is Best: First- Or Third-Party Claims? by James A Castleman, Esq. CONTENTSSeptember 2022 • Volume 20, No. 9 ALSO THIS ISSUE 7 | AASP/MA MEMBER APPLICATION 19 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS DEPARTMENTS COVER STORY 28 | Is It Time to Cancel Your Programs? by Chasidy Rae Sisk NATIONAL FEATURE 20 | The Collision Shop Image: Controlling Your Customer’s Perception by Chasidy Rae Sisk ! New England Automotive Report September 2022 5
The first bill (HB 327, now HB 4242) addressed the need to move the Auto Damage Appraiser’s Licensing Board (ADALB) from out of the Division of Insurance (DOI) to the Division of Occupational Licensure. The lead sponsor of this bill was the chairman of the Joint Committee on Consumer Protection and Professional Licensure, Tackey Chan. Representative Chan has been a true champion in this cause and has assisted in getting the bill moving along in the legislative process to the House Committee on Ways and Means. A lot of attention has been
MESSAGE “LUCKY”EVANGELOSPAPAGEORG Cutting Our Political Teeth continued on pg. 8
DIRECTOR’SEXECUTIVE
6 September 2022 New England Automotive Report AASP/MA EXECUTIVE COMMITTEE AASP/MA STATEWIDE DIRECTORS AASP/MA DIRECTORS WWW.AASPMA.ORGNew 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 © 2022 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com AASP/MA ADMINISTRATIVE OFFICE President Kevin Gallerani Vice President Matthew Ciaschini Treasurer Dana Snowdale Secretary Gary Cloutier Director At-Large Adam Ioakim Legislative Director At-Large Tom Ricci Collision Director At-Large Rob DelGallo ZONE 1 Mike Penacho Dan Wenzel John Studer Affiliate Director Rick Fleming ZONE 2 Ray BrendaJoshuaBelsitoFullerLacaire Affiliate Director Bill Spellane ZONE 3 Andrew Potter Brian Stone ZONE 4 Kevin Kyes Jim PaulMarshallTuscano Affiliate Directors Frank Patterson Jeff DonWhiteDowling AASP/MA Executive Director Evangelos “Lucky” Papageorg AASP/MA Administrative Assistant Alana Bonillo P. O. Box 850210 Braintree, MA 02185 617-574-0741 PUBLISHER Thomas Greco | thomas@grecopublishing.com SALES DIRECTOR Alicia Figurelli | alicia@grecopublishing.com SALES REPRESENTATIVE Bill Moore | bill@grecopublishing.com | (201) 209-1989 EDITORIAL/CREATIVE COORDINATOR Alana Quartuccio Bonillo | alana@grecopublishing.com OFFICE MANAGER Donna Greco | donna@grecopublishing.com PRODUCTION COORDINATOR Joe Greco | joe@grecopublishing.com MANAGING EDITOR Chasidy Rae Sisk | chasidy@grecopublishing.comSTAFFPUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963 www.grecopublishing.com Thank you to each and every one of you who has taken the time from your busy workday to read and respond to the requests in the AASP/MA call-to-action emails. AASP/MA (the “ALLIANCE”) has been receiving dozens and dozens of daily emails from shops across the state confirming their calls were made. We have been included in the emails sent to legislators from shops in their legislative districts. We know the legislators are getting the message. We know they are paying attention and that the collision repair industry and its issues are part of the discussion in the House and the Senate. AASP/MA has developed great relationships with key legislators who truly care about how the artificially suppressed labor reimbursement rate is having a devastating effect on vehicle owners and the collision repair industry. An industry that is counted on by millions of constituents across the state to guarantee the safety of the motoring public. All those constituents’ contributions to the effort – vehicle owners, shop owners, employees, families and friends – have made a major impact, particularly over the past 18-plus months. The last 18 months have been part of the 192nd session of the General Court of Massachusetts which started in January 2021, and AASP/MA hit the ground running. In preparation for the legislative push, a Lobbying and Legal Fund was created, and contributions are collected on a monthly basis from a core group of shop owners from across the state along with individual contributions. Due to the generosity from contributors, AASP/ MA was able to hire a full-time legislative agent. Guy Glodis has been instrumental in our success; he has been able to secure meetings with Commissioner of Insurance Anderson and Lt. Governor Polito, as well as numerous key legislators in leadership. Guy’s experience and relationships, developed as a state senator, representative and county sheriff, have been invaluable.AASP/MA’s Legislative Committee headed by longtime “ALLIANCE” member and past president, Tom Ricci with the assistance of several committed Board of Directors and other shop owners, created language to address two very pressing issues facing collision repairers and their customers across the state.
AASP MA P.O. BOX 850210 Braintree, MA 02185 Phone: 617 574 0741 Fax: 973 235 1963 Email: admin@aaspma.org REV 7/22 Membership Application 2022 2023 Please complete this form and return to our office via mail, email or fax with your dues payment. Thank You! BUSINESS INFORMATION Massachusetts Shop Registration # __________________ Total number of Staff (Techs, office, Mgrs)________ Company’s Official Name: Business Physical Address: Business Mailing Address (If Different): Telephone Number: ( )- -___________ Fax: ( )-DUES STRUCTURE. Collision Shop Annual Dues: $495 / 12 Months* PRIMARY BUSINESS CONTACT Name: _________________________________________________ Email: _____________________________________________ PLEASE ENCLOSE PAYMENT WITH YOUR MEMBERSHIP APPLICATION Check# : _______________ (IF collision shop please note your RS# on the memo line of the check) OR CC #: ______________ EXP: ________/___________ CID: _________________ Billing Address: ____________________________________________________________________________________________________________ Name On Card: _____________________________________________ Signature: _____ Note: A 4 percent convenience fee will be charged for membership renewal via credit card transaction I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/ MA) for membership dues 2022 2023 as provided for in this contract. *Membership Dues are for a twelve month period commencing on your anniversary month of membership Yes � Please send me information regarding the following MONEY SAVING BENEFITS: � Dental plan � Healthcare plan � Credit card processing � Grant writing/training � Google presence optimization � All five YES � Please list my business as an AASP/MA member in good standing on the AASP/MA website for consumers to consider using for the collision repairs and assistance with the claims process. I understand this is a member benefit (___ initials Date ___/____/2022) New England Automotive Report September 2022 7
8 September 2022 New England Automotive Report EXECUTIVE DIRECTOR’S MESSAGE
We
is success." ... Henry Ford
We
Our initial sharpening of our political teeth took place back in February 2021 when we got nearly half the legislators in the House and Senate to sign on as supporters of both our bills. We caught the insurance industry off guard before they could rev up their lobbying efforts. We have continued to sharpen and add bite to our teeth via the addition of more and more member shops, something the insurance industry definitely fears. More members mean a louder voice. It means more consumers hearing the message and reacting and advocating for themselves and for their chosen collision repairer. It means more voters (when unhappy with their current insurance company and legislators) will be making a switch. This is something neither an insurance company nor a legislator can afford to haveOurhappen.teethbecame more hardened and chiseled when over 300 shop owners, employees, vocational school instructors and their students protested in front of the Statehouse on May 18. We proved that we are an “ALLIANCE.” We proved that we will not be ignored. We can and will continue to call attention to issues facing consumers and the collision repair industry. together is a together Working together THIS IS THE “ALLIANCE.” proved that we are an “ALLIANCE.” We proved that we will not be ignored. can and will continue to call attention to issues facing consumers and the collision repair industry.
WE HAVE PROVEN WE HAVE POLITICAL BITE AND ARE NOT ABOUT TO LET GO! WE CAN AND WILL ONLY GET STRONGER!! "Coming
AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org. MASSACHUSETTS Contact Boch Chevrolet for your GM Par ts needs! Boch Chevrolet 381 Boston Providence Hwy Route 1, The Automile Norwood, MA 02062 Par ts Line: 781 762 9210 Toll Free: 800 559 9210 bchwholesale@boch com KEEP IT GEN U I N E I NSIST ON GENUI N E GM PARTS
beginning. Keeping
The second bill deals with the issue we have been facing for the better part of 30 years: the artificially suppressed labor reimbursement rate by insurers. HB 1111 (Now HB 4868), sponsored and strongly advocated by Representative James Hawkins from Attleboro over the last 18 months, has made it further than most bills ever submitted during a legislative session. Only one percent of all bills filed make it all the way to the Third Reading Committee. This success was due in no small part to the efforts of the “ALLIANCE” and the efforts of countless individuals and the hundreds of hours of dedicated AASP/MA legislative committee meetings, legislative testimony, Labor Rate Study Commission (LRSC) testimony and additional meetings with key legislators. We are strengthening our voice; a voice of influence, a voice of commonsense, a voice of honesty and a voice willing to discuss solutions. Unlike our counterparts in the insurance industry who, though asked numerous times to come to the table with solutions, were silent in the process…except to voice opposition and make absurd comments during the hearings process. Not until the full realization that the groundwork and relationships the “ALLIANCE” has worked so hard to develop was beginning to have very positive effects, did the insurance industry get shocked into real action. The Senate, led by President Spilka and Chairman Rodrigues, included language in the Governor’s Economic Development package to address the insurance industry’s failure to do anything about the issue except maintain the status quo. The fight is far from over, and with your help, the “ALLIANCE” has been keeping the issue in front of the House members of the Conference Committee members: Chairman Michlewitz, Rep. Soter and Rep. Cusack. Our steady flow of calls and emails will be like a dripping faucet which must be addressed and repaired. It cannot be ignored.
is progress.
continued from pg. 6 brought to the issue regarding the lack of enforcement and thereby lack of consumer protection by the current ADALB because of its composition and where it is currently housed. Particularly because of the overwhelming power of the insurance representation on the ADALB: 1) chairman 2) insurance employees and their “gaming” of Robert’s Rules of Order when voting often shows the bias of the ADALB in protecting the insurance industry’s interests (profits), rather than protecting consumers as the ADALB was originally created to do.
New England Automotive Report September 2022 9
10 September 2022 New England Automotive Report
New England Automotive Report September 2022 11
Chairman Michael Donovan asked if the motion was to move forward with the 100 complaints, but Starbard clarified that his motion related only to the first complaint…and that he fully intended to review each one individually because “I think this person deserves the due process of us reviewing them. He put the time in to submit all these complaints, so the least we can do is read them – even if we’re going to screw him over by sweeping it all under the rug. I don’t care how long it takes.”
Starbard and Johnson teamed up to explain that many of the complaints were related to an insurer’s outright refusal to pay for OEM-required repair procedures, a clear violation of 212 CMR 2.04(1)(e), which reads: The appraiser shall itemize the cost of all parts, labor materials, and necessary procedures required to restore the vehicle to pre-accident condition and shall total such items.
A Systematic Disconnect at the ADALB?
Following more than a year of contention, dispute and “compromise,” the Auto Damage Appraiser Licensing Board (ADALB) finally approved the proposed amendments to 212 CMR 2.00 with a three-to-one vote…but while the long-awaited and fiercely-debated motion passed with ease on July 19, the rest of the meeting was filled with tension, rebuffed attempts at education and plenty of evidence to indicate that there’s a serious disconnect at the ADALB.Board member Bill Johnson (Pleasant Street Auto; South Hadley/Belchertown) requested a discussion about insurers notifying consumers that their damaged vehicle will be moved from a body shop before the insurance company’s appraiser physically inspectsBoardit. member Rick Starbard (Rick’s Auto Collision; Revere) suggested sending a letter to the insurer in question reminding them of inspection timelines, but rather than put it to a motion and vote, Attorney Michael Powers insisted the ADALB will “deal with it at the nextCivilitiesmeeting.”devolved as the Board got to work reviewing 100 complaints against ADALB-licensed appraisers by a licensed appraiser who owns a body shop. Board member Peter Smith (MAPFRE) sought to summarily dismiss the complaints because “they, for the most part, involved a monetary dispute between the insurer’s appraiser and the shop’s appraiser, and I don’t think it’s in the Board’s purview to be getting involved in monetary disputes between appraisers.”
Refusal to negotiate, failure to identify a company that will perform a sublet for the amount paid, refusing OEM requirements – the ADALB revisited these topics through 36 of the complaints, continued on 16
pg.
12 September 2022 New England Automotive Report [LOCAL] NEWS
New England Automotive Report September 2022 13
Remembering Mike “Mr. MABA” Beal by Alana Quartuccio Bonillo Automotive Report
[LOCAL] NEWS
“Mike worked diligently for the industry and earned the respect of all who knew him. It was only fitting that we honored him as an industry icon at one of the casino nights after his retirement. His memory will live on, and he will be missed by all.”
Last November, dozens from the western chapter gathered for a reunion in Mike’s honor, which was organized by Ed’s wife, Joann. Ed recalls this wonderful tribute to his dear friend: “I was thrilled that so many shop owners attended what turned out to be a final tribute to Mike. His wife told us that he was truly touched by the outpouring of love.”
“Mike Beal was a great man who always treated Zac and me like we belonged when we were just starting out,” recalls Ciaschini of his friend. “He is one of the people who strongly encouraged us in every way, especially to join the association. I am forever indebted to Mike. He will be greatly missed. Rest in Peace, Mike.” Ed Nalewanski (Ed’s Auto Body & Repair; Easthampton) will always remember Mike as a dear friend and colleague of more than 40 years.“When I joined MABA back in the early 80s, Mike was the head of the western chapter, planning and organizing all the meetings and events. That trend continued for years until his retirement,” he reminisces.
Fighting for a better labor reimbursement rate was one of Mike’s many battle calls.
AASP/MA Executive Director Lucky Papageorg worked closely with Mike back in his days as executive director of MABA.
“Mike never backed down,” he remembers Mike’s determination and spirit. “He always stuck to his guns and set a great example. I’m thankful to Joann Nalewanski for putting that event together last November where we got to spend time with him and honor him for all his accomplishments.
Mike and his wife successfully ran Michael’s Frame & Collision in Westfield for over 30 years before they retired in 2013.
AASP/MA Vice President Matt Ciaschini would not be where he is today if it weren’t for Mike. Matt and his brother Zac, who co-own Full Tilt Auto Body (Hatfield), were early into their career when Mike walked through the door and encouraged them to join the auto body association.
14 September 2022 New England
Leading the way and setting good examples were ways of life Mike also applied outside of the shop. He volunteered his time at Westfield Vocational School and Smith Vocational as a teacher, inspiring students in the automotive trade. Outside of his love for the automotive world, Mike was an avid fisherman who loved boating and grilling for his family. He is survived by his wife, Mary; their daughters, Eileen Beal and Rebekah Harings (and spouse, Jim). He is also survived by his sister, Carol Mackinnon; his brother, John Beal; his grandsons, Finley and Rory; and a large extended family.
MASSACHUSETTS
August 1 was a sad day for the Commonwealth’s auto body community when longtime advocate, shop owner and local collision repair industry leader Mike Beal passed away at the age of 72 after a long battle with Parkinson’s Disease.
Mike was diagnosed with Parkinson’s Disease in 1990 and fought valiantly for 30-plus years. He actively participated in support groups and Parkinson’s-related activities in the area throughout the years, proudly reinforcing his claim that the disease “can only slow you down, it can’t stop you.”
“Throughout the years, he, along with his devoted wife Mary, worked tirelessly to raise the labor rate,” Ed relays. “My only regret is that it did not pass while he was alive. But somehow, I know that he is still advocating for the industry from above and soon will be able to rest in peace.”
Matt refers to Mike as “the most welcoming guy. He was the first one who ever welcomed us into his shop and taught us about how we should manage our rate, how to set up the shop and deal with appraisers. He really kept things clean. At the early association meetings, he sat with us and treated us well.”
An industry legend, especially in the western part of the state, Mike was known as “Mr. MABA,” having served multiple terms as president of the Western Massachusetts Auto Body Association and VP under Rob DelGallo of MABA, the statewide association. He will forever be remembered for his tireless dedication to advocating for the rights of auto body shops.
[LOCAL] NEWS
Obtaining a collision repair education can be costly, but as part of its commitment to supporting women pursuing a career in this industry, the Women’s Industry Network (WIN) will be awarding up to 20 scholarships to provide tuition assistance, educational opportunities and enrichment activities to qualified applicants.
MASSACHUSETTS
Quite a few verbal blows were struck before the ADALB adjourned with plans to reconvene on September 13. Don’t miss the detailed coverage of this meeting, only available in the August issue of the Damage Report members only newsletter.
AASP/MA members are strongly encouraged to listen to the recording of the July 19 meeting in the Members Only section of aaspma.org for a glimpse into the inner workings of the ADALB. The original proposed revisions can be found on the May meeting agenda, available at bit.ly/ADALB0722 pg.
pausing occasionally for Chairman Donovan to express his displeasure at “the unusual volume of cases” submitted by a single repairer…though his incessant fidgeting and scowls said plenty, even without his mouth moving.
. continued from
Stars will receive a $500 scholarship, while Champions receive a $2,500 scholarship and access to monthly student engagement activities.Allscholarship recipients will be given a free virtual pass to the 2023 WIN Educational Conference, plus they’ll be granted membership to WIN’s exclusive student Facebook group. Additionally, each young lady will be given the opportunity to be mentored by a WIN member. Applications for the 2023 program will be accepted from September 12 through October 28, 2022 with winners announced in January 2023. Access the application or obtain more information at bit.ly.com/WINsch23
Industry Network Opens 2023 Scholarship Applications
Ultimately, the Board voted to move forward on just 11 of the 36 complaints, which will be reviewed at a future date. Over and over, Johnson and Starbard voted to proceed; Smith voted to dismiss every single complaint. The 11 complaints moving forward will proceed due to favorable votes from Board member Samantha Tracy (Arbella Insurance). On the several complaints from which Tracy abstained from casting a vote, Chairman Donovan voted in line with Smith, creating a tie vote and causing the motion to proceed with the complaint to fail under Robert’s Rules of Order.
12 MASSACHUSETTS
To ensure that these awards remain relevant and beneficial to recipients, WIN has revitalized their scholarship program for the coming year and will be offering awards in two separate categories.
16 September 2022 New England Automotive Report [NATIONAL] NEWS
Women’s
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The family-owned-and-operated company is run by Albert’s son, Ron, who serves as the company’s president and CEO. Ron’s children, Kayli and Ron Jr., also play a principal role in the operation from the Amityville, NY corporate headquarters. More recently the company merged with the WESCO group, a similar size distributor based in Seattle, WA, forming one of the largest paint, body and equipment companies in North America.
“We don’t do business with everyone in the association, and that’s fine. It’s more about the marketplace in general. Eventually, others will see the value we bring, and maybe it will lead to an opportunity to talk to those folks we don’t do business with.”
legacy was born by the hands of namesake Albert and his wife Mary Kemperle in Brooklyn, NY in 1940. What started as a single-store operation now stands as one of the largest distributors in the country with over 50 locations up and down the east coast, boasting a strong presence in the New England area since 2006. Their Massachusetts footprint includes locations in Framingham and Lynn.
Kemperle serves as a business partner to their customers. A good business partner is forward thinking and mindful of the future of the“Inindustry.tryingto keep the industry in a healthy place, we ask ourselves how we, as a distributor, can assist in getting the next set of people into this industry. We are supremely interested in the marketplace and keeping it healthy. Being a part of AASP/MA gives us that opportunity to hear directly from the shops they represent.”
The team today. Left to right: Ron, Kayli and Ron, Jr.
How does Albert Kemperle stay on top of the needs of the body shops they serve? Much of it comes from their involvement with AlbertAASP/MA.Kemperle has been a longtime supporter and currently serves as a Gold sponsor in the association’s Vendor Affinity Program.“Being involved keeps us plugged into what is going on in the marketplace at the shop level, and it also helps us find ways to help our customers,” explains Vandale. “It keeps us at the forefront, and we are able to hear the challenges from the shops themselves. The more you know, the easier it becomes. We really are trying to keep the whole marketplace healthy.”
18 September 2022 New England Automotive Report [VENDOR AFFINITY PROGAM] MEMBER SPOTLIGHT
Where their annual day on the green for the golf outing gives the Kemperle team a chance to network and interact face to face with colleagues and customers, they maintain their real focus lies in bringing value to the association. They strive to do this by helping to bring in speakers who can address the challenges body shops contend with daily. They also hope to make new contacts along the way.
The Albert Kemperle Inc. headquarters in Amityville, NY
The 82-year-old paint, supplies and equipment distributor is also a partner to their customers – working with them to provide solutions to their everyday challenges while also delivering quality products.TheKemperle
Albert Kemperle, Inc. is much more than a household name to the auto body shop world.
In addition to their support of the association via the vendor program, Kemperle shows its commitment to the auto body community by being part of the golf outing through sponsorships and participation as well as the many educational events AASP/MA puts on throughout the year.
by Alana Quartuccio Bonillo MASSACHUSETTS
The company strives to be a one-stop-shop for all body shop needs – delivering much more than paint and supplies.
“We tailor our offerings and do much more than sell paint,” offers Sean Vandale, director of sales and operations for the New England and upstate New York markets at Albert Kemperle, Inc. “We offer business development and KPI tracking. There are a number of different things we do to help our customers.”
AASP/MA Thanks to our VAP Members for their continued support during this pandemic crisis. VENDOR AFFINITY SPONSORSPROGRAM DIAMOND LEVEL GOLD SILVERLEVELLEVEL BUY FROM YOUR AASP/MA SPONSORS For more information or to become a sponsor of AASP/MA please call (617) 574-0741 or email admin@aaspma.org. MASSACHUSET TS PROTECTING CONSUMERS AND THE COLLISION INDUSTRY "Your Massachusetts Auto Body Association" Volkswagen & ADAS CALIBRATION SHOP PLATINUM LEVEL DOUBLE BLACK DIAMOND LEVEL New England Automotive Report September 2022 19
Every shop is different, and promoting those differences as value-added benefits of choosing your particular facility fosters good will, making it more likely that customers will
20 September 2022 New England Automotive Report
A vehicle owner walks into the shop, looks around apprehensively and leaves after asking a question or two. Despite the shop being fully trained and equipped for the repair of that specific car, the consumer opts to seek services elsewhere because the collision professional failed to sell the potential customer on the shop itself. Sadly, this is an all-too-common scenario as shops often struggle to overcome a huge hurdle: the customer’s preconceived beliefs about the facility…and even the industry itself!
“The high cost of repairs feeds the lack of trust as consumers see an estimate and refuse to believe we’ve given them a fair price for simply bumping into someone,” Rush continued.
“The public doesn’t view the industry in any direction until they need work done on their car,” Maylan Newton (Educational Seminars Institute) agreed. “Then, their thought process trends toward negativity because of how the industry is portrayed in the press in general.”The impetus for improving the public’s perception of the collision repair industry lies firmly with the shops. Marketing plays a vital role for any business desiring to increase profitability, but shops can also utilize these tools to improve the overall image of collision repairers and the industry at-large…before a potential customer even steps foot in their facility.“When a customer knows a little about a shop, it’s easier to choose them,” Nesbitt indicated, suggesting that shops can get their names out in front of the community by sponsoring local sports teams and participating in charity events. “It all comes down to the relationship, which is based on trust, and community involvement creates positive brand recognition that essentially acts like a personal recommendation for your facility.”
[NATIONAL] FEATURE
“The average consumer views the collision repair industry in a negative light,” believes Micki Woods (Micki Woods Marketing). “Many feel that shops are trying to scam them, and there is general mistrust related to many different factors. The most common are bad past experiences, a lack of understanding that leads to assuming the worst and horror stories from friends or family.”
“I agree with most industry experts that the public’s perception of the industry is negative, largely due to years ago when shops had a history of being less than professional and, in some cases, less than honest,” suggested Lee V. Rush (Sherwin-Williams). “We’ve also seen negative media coverage of our industry which perpetuates that perception and gives the consumer a negative impression of shops, collision repair and our industry as a whole.
“It depends on the consumer’s previous experiences. If they had a good experience, they’re apt to view all shops as good, but if their most recent shop visit went poorly, they’re probably going to think that all shops are horrible like that one. Consumers who haven’t needed an auto body repair in the past have no experience, so their brain will recall the last time someone else talked about their experience. As humans, we make a lot of quick assumptions as we move through our lives, and that’s especially true in an accident scenario where the vehicle owner is already experiencing a lot of extra anxiety.”
“Combine that with the fear of not really understanding what we do, and we can see why many customers are reticent about trusting shops. We continue ‘enjoying’ that reputation, whether we deserve it or not, and to be fair, it’s not just our industry – lawyers, car salesmen and mechanical shops contend with a similar stigma.”Massachusetts-licensed auto damage appraiser and insurance agent Nadine Nesbitt (WAITT! We’re All In This Together Marketing Group) sees it a little differently.
“Body shop customers are dealing with a traumatic experience that they rarely encounter,” Newton reminded repairers. “Are they greeted by friendly, smiling professionals who help them resolve their problem? Even though they’ll only be in the shop for a short amount of time, we want them to be comfortable while they’re there, so make sure the shop is clean and smells good. Staff should be professionally dressed, and always offer customers something to drink while waiting for the paperwork. Dealing with insurers and supplements poses challenges for the shop, but the goal is to make it as painless as possible for the customer – when their burden becomes the shop’s burden, they’ll feel the shop is taking care of them, and that’s how we make customers happy.”
“First impressions are created within nine seconds, and a grouchy greeting can destroy any rapport before you have a chance to establish it,” Nesbitt offered. “All customers want to feel welcome and like their business is valued, so no matter how busy you are with your current customer, take a few seconds to greet the new arrival and assure them that someone will be right with them. Business owners need to ensure they have the right people in the right positions…the best painter may not be the most customer-oriented employee, so find front desk help that’s going to promote the image you’re trying to convey. Friendly and helpful staff leave a good impression. It’s all about creating a culture within the shop and with your customers.”
“First impressions are powerful and critical. It may be our 20th call today, but it’s the customer’s first call to us…and it’s our only chance to make a strong first impression. We need to portray an overwhelmingly high level of professionalism within a few seconds when we answer the phone because that’s often how we ‘meet’ that customer. Body shops have come a long way when it comes to developing proper greetings and scripts because they realize they need to explain their process and training, as well as develop an emotional connection, in just a few minutes. What’s different from your shop’s script than the shop down the road? We need to consider that to make sure we’re standing out from the competition.”Collision repairers know there’s a need to interact in a friendly and professional manner with their customers, but in order to have that opportunity, they must first come into the collision center. Phone skills offer a great start, but what happens when the customer drives up to the shop?“Image is very important, but most shops fail to realize that it actually starts about a mile away from the shop with your signage,” Newton pointed out. “Signs should look professional and clearly indicate where the customer needs to go.”
“Showing your employees’ faces on social media, your website and elsewhere online creates a stronger feeling of connection to your shop for the consumer,” Woods advised. “If shops can show that they are involved in the local community, consumers will feel the shop is part of their ‘team.’ Shops that participate in local events and support local organizations can showcase their involvement by posting photos to social media and tagging the places or organizations they’re partnering with. This is a great method for building brand awareness.”
Social media, while often frustrating or even overwhelming, offers another valuable resource for shops hoping to correct the industry’s perception before the vehicle owner actually needs their car repaired.
“Nothing beats a collision center team that actually cares,” Woods insisted. “Consumers can feel whether their presence is a bother or if the staff is there to care for them. Find people with warm, friendly demeanors to answer your phones and greet your guests. Writers should
“Immediately greeting the customer on-site creates a first impression too,” Rush noted. “They’re typically walking in with a lot of emotion and not necessarily much logic, so how they’re treated as soon as they walk in drives their emotions, their response and their feelings about the business. Uniforms communicate a certain level of professionalism as well. We’re past the days of customers believing the shop’s employees will take care of them; they expect a $70,000 vehicle to be repaired by professionals, and professional uniforms create that impression pretty effectively.”
“The best kind of praise comes from other people!” Woods concurred. “I recommend each shop solicit frequent and recent testimonials on the major review sites (Google and Yelp), so prospective customers can hear directly from other consumers.”
Althoughtransportation.”Rushagreesthat a shop’s online presence requires significant attention for shops eager to “wow the consumer,” he feels that shops need to pay attention to the first point of contact before the customer enters the shop – which often occurs through a phone call. He offered a tip: “Smile before you answer the phone or make the call; customers can sense your mood through the tone of your voice.
“It’s important that shops project a positive outlook on these platforms and in all forms of advertising; we need to promote the finished product,” Newton emphasized. “Customers don’t want to see damaged cars; that’s negative imagery. Any kind of traffic accident or body damage is traumatic, and we want the customer to stop thinking about that trauma. Positive imagery of happy families driving away in their repaired vehicle helps shops move away from the negativity and guide customers to focus on what the shop will provide, about how the collision repair facility will make them whole by restoring their safe, reliable and dependable
“We need to be conscientious of the first impression the customer receives when they pull up at the facility, too,” Rush added. “Many shops don’t have many parking spaces, or they may lean parts against the counter as they unload a delivery truck. As industry professionals, we’re desensitized to the way this looks. It doesn’t seem out of place to us, but for most consumers, this makes them uncomfortable. We only have a handful of touchpoints with each customer, and managing the aesthetics of the facility can ease their mind from the onset of the process. Cultivate a showroom – and I use that word intentionally – that doesn’t look like a ‘body shop.’ Doing these things allow shops to create a first impression that drives customer confidence and trust more than anything else.”
Nesbitt also suggested that offering concierge pick-up and dropoff allows the shop to focus more on each customer rather than rushing through the process and neglecting to provide an adequate level of service. Education is also important.
continued on pg. 24 New England Automotive Report September 2022 21
by Chasidy Rae Sisk promote your business through word-of-mouth referrals.
“Besides the fact that many vehicle owners go years before needing auto body work, each shop has its own process, so offering a tip sheet with what to expect, any contact information they may need and payment instructions serves as a great sales and marketing tool,” she observed. “Arming consumers with the information they need enables them to feel prepared and reduces their stress.”
“The cost to keep your entry, waiting room and restrooms clean is nominal, but it indicates to the customer that you’ll keep their car clean as well,” Nesbitt contributed.
Of course, the most effective means of building a relationship and garnering trust comes down to the good ol’ fashioned, tried-and-true method of human interaction, and shops have multiple opportunities to correct consumers’ perception of the industry when they’re on site.
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Funding for such a campaign comes with its own concerns, but Newton believes shops must recognize the need to contribute to such an endeavor.“McDonald's franchises in Southern California alone have a $100 million marketing budget, but if shops across the country contributed just $100 each month, we could create TV and radio ads that would promote associations as the guiding light toward shops doing jobs correctly.“The world is changing, and we need to change with it,” Newton continued. “We can’t keep thinking like we did five or 10 years ago. We need to promote individual shops and our industry as a whole, and associations have a great opportunity to build trust and then direct consumers to their website to choose who they’ll do business with.”
Associations could also collaborate to promote the industry through a nationwide campaign indicating that their members are quality repair facilities worthy of trust, according to Newton.
Nesbitt proposed associations establish standards to ensure better customer service and develop rating designations to promote the shops that have invested the time and energy into improving their skills. Such a system would be intrinsically connected to a training agenda focused on different positions within the organization as well as marketing and general business sessions.
“When auto body shops try to move the needle in their favor, such as AASP/MA’s recent rally on Beacon Hill, it’s often perceived as collision repairers against insurers, but we need to get rid of that mindset. We know problems exist, and we need to address them for the good of both industries. Insurance companies should stop thinking they’re in charge of the shops and remember that their job is paying for the repair; the shop’s job is to focus on properly repairing the vehicle so it keeps the customer and their family safe when they drive it down the road.”
“People talk about the experience, not the repair,” Rush reaffirmed. “We want to meet more than their minimum expectations; we should be looking to create a memorable and differentiating experience. While 80 percent of companies believe they provide superior customer service, only eight percent of consumers agree. Who’s right? The customer is because it’s their perception, and that means we need to do a better job of managing it by reviewing our business from the customer’s point of view, so we can establish better processes to improve their experience.
Many collision associations strive to do exactly that, and AASP/MA consistently maintains its position as a forerunner in its efforts by offering a webpage dedicated to providing shops with resources to educate consumers. Learn more at aaspma.org/your-rights
FEATURE be explaining and informing the guests throughout the process, so they feel like they are part of the process, which will create a more trusting relationship. Team members who go out of their way to run that extra mile mean a TON to guests, especially those who were originally leery of body shops in general.”
It’s important to continue building that rapport throughout the process as well.
While shops can do many things to improve the perception of their individual businesses, it would be ideal if the industry in its entirety collaboratively made some efforts to promote collision repairers’ professionalism, extensive training and hard work.
“Part of supporting shops includes supporting the industry’s future,” Nesbitt elaborated. “We need to attract, onboard and retain new technicians, but there’s a long cycle time on getting a new tech up-todate on the skills they need to be qualified to repair modern vehicles, so time is of the essence and we need to start now by developing better relationships with the high schools and the students. Shops need to get involved locally, but collision associations can help facilitate those introductions at “Associationsleast.”forcollision and automotive repairers need to create general industry advertisements,” Newton claimed, referencing egg commercials that negated claims that eating eggs led to high cholesterol. “It wasn’t about a specific brand; they promoted eggs in general. Our industry doesn’t have a general plan to market the good things we do. Associations should be managing that as a way of improving our image.”
Nesbitt proposed implementing cross-training programs whereby insurance appraisers are required to spend time in shops to get a more well-rounded image of the process and “get a different perspective.
24 September 2022 New England Automotive Report [NATIONAL]
“Learning better negotiation skills, writing a more thorough appraisal and focusing on customer-centric service are tools every shop needs, and associations can recognize the shops exerting that effort with a one-to-five star rating system that promotes five-star shops.”“We don’t have a national organization that advocates for us,” Rush lamented. “A lot of regional organizations do a great job in specific markets, but nobody is pulling together a public service announcement to promote the level of expertise needed in this industry or the great career opportunities that exist within collision repair. This contributes to the skilled labor shortage we’re experiencing as well.”
Changing the public’s perception of this industry may seem like a daunting task, but the opportunities to improve our image are endless. How will you positively impact your customers’ impression of collision repair shops?
“It would be great to be more informative as an industry,” Woods stated. “Transparency lessens distrust, and a desire to help our customers – versus focusing only on selling to them – would be a nice switchup.”
“Most industry entities don’t have enough brand recognition to make a difference, but if bigger organizations advertise the industry, it creates brand recognition, and from there, member shops will enjoy increased credibility. Most associations have standardized codes of ethics that we should be advertising to promote what we do and remove the negative stigma from the industry as a whole.”
“We need to create more collaborative projects, and I believe the collision industry could work with insurers to accomplish several things, like raising the minimum required limits on auto policies in Massachusetts to provide better coverage for everyone,” Nesbitt offered an out-of-the-box idea. “Increasing the limits wouldn’t cost insurers much, but they could definitely profit more if they stopped focusing so much on controlling shop costs. Insurance companies waste valuable resources fighting with shops and creating hostility when we should be working together with the common goal of ensuring the customer’s safety in their properly repaired car.”
Because, ultimately, the customer relies on the individual shop, no matter how they reach the facility.
“No matter how frustrating the repair cycle might be, we have to manage the customer’s experience and expectations,” Rush recommended. “Consistently update the customer on the regular cadence of progress. Providing regular updates makes it less detrimental if you do have to call them with less-than-favorable news. Conversely, if the shop only calls with bad news, that’s the only experience they have…and it’s negative.”
“Quite frankly, it’s up to us,” Rush emphasized. “Each customer’s experience and overall perception of your shop is based on their interactions with it, from first contact to vehicle delivery. All these touchpoints determine how that customer views you…and quite possibly, the entire industry. We’re the best people to help ourselves.”
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28 September 2022 New England Automotive Report ! [COVER] STORY by Chasidy Rae Sisk
Although Total Care Accident Repair once participated in upward of a dozen affiliations with different insurers, Lamborghini removed the shop from all programs and referrals after he “came to the conclusion several years ago that the insurers’ expectations, based on the contracts we signed, were not in the best interest of a quality vehicle repair…or in the customer’s best financial interest. You cannot serve two masters – shops can elect to work for the insurer or for the vehicle owner. We’ve chosen to work for our
Is It Time to Cancel Your Programs?
Initially, both shops and insurers benefitted from the relationship; however, many auto body professionals now seem to believe that they’re giving more than they’re receiving.
“Long ago, insurers told us we needed to repair more cars, and to do that, we’d need to be lean and efficient,” recalled Ray Belsito (Arnie’s Auto Body; Charlton), who believes, “That’s great, but we lost sight of the fact that we’re in business and our margins matter. Instead, we took ownership of the lack of profitability because the insurance companies blamed it on our inefficiencies, and as a result, we’ve created an environment where we rely on them for work.”
Repairing modern vehicles becomes more complicated with each passing year, thanks to advancing technology, an everevolving legislative landscape and the complexity of third-party relationships that many shops feel they must maintain. Of course, as independent businesses, shops reserve the right to operate the way they see fit…until they enter an arrangement with an outside entity, such as by participating in insurers’ referral and program contracts, the Commonwealth’s version of direct repair programs (DRPs).The concept of a “referral” program sounds pretty great: Insurers refer claimants to a contracted shop in exchange for certain concessions, such as reduced labor rates or free storage.
Insurers’ focus on efficiency doesn’t necessarily benefit the vehicle owner any more than the body shop.
Yet, the insurers’ customers are also the shops’ customers, creating a conflict when a contracted relationship forces shops to decide between the insurer’s mandates and the customer’s best interests. In fact, that conundrum has forced multiple shops to reconsider the value of being a “program” shop.
“Customers constantly complain about the poor level of customer service they receive from their carriers,” shared Jack Lamborghini (Total Care Accident Repair; Raynham). “They’re expected to do extra work, like submitting pictures for photo estimates, but they receive less service and fewer return phone calls than ever before. A few insurers do a good job, but generally, you can predict that the larger the insurer is, the less satisfied their customers are.”
Jeff White (North Andover Auto) cited similar reasons for deciding to be removed from all programs and referrals.
“We had to agree to certain labor reimbursement rates, to use aftermarket parts and not to charge for storage. The financial aspects definitely deterred us from continuing those contracts, but the primary problem is the demands in these agreements! As a referral shop, disagreeing with the insurer about repair versus replace is a completely different battle. Auto body professionals should be free to repair the car the way we (as the experts) believe it should be repaired – based on the training, tooling and equipment we’ve invested in so that we can do the job right.”
Auto Body (Dartmouth) can be found on several referral lists, but owner Al Correia has slowly been extricating himself from those contracts and has already been removed from three this year. “We’re forced to perform administrative work, but they reject our attempts to bill them for those hours. Our supplements get cut in half, and it’s generally a royal“Morepain.
affiliation. However, it is our firm belief that the restrictive and suppressive insurance referral and “program” contracts are a detriment to our industry and could create a liability risk for vehicle owners and collision repairers. We strive to advance the industry through education, regulatory enforcement and legislation to dismantle the control and influence insurers have on consumers and our industry.
“Shops buy into the insurers’ flawed business model that prevents us from operating our businesses with any independence,” Belsito objected to the current system. “We listen, we settle, and we allow them to dictate how we run our shops. It doesn’t make sense. As long as auto body shops continue to listen to insurers’ mandates about how to run their business, we’ll continue to be continued
“If the insured could read the contractual agreement between their insurer and the referral or program shop, it would likely cause them to reconsider who should repair their vehicle,” Lamborghini suggested.Thechallenges associated with attempting to serve both the insurer and the consumer led AASP/MA to issue a position statement on the matter last year: AASP/MA is a pro-consumer association representing all collision repairers and mechanical repair shops regardless of insurance
on pg. 32 New England Automotive Report September 2022 29
importantly, I realized what those contracts were doing to our industry’s ability to negotiate,” he continued. “When a shop attempts to negotiate labor rates, the insurer knows they can get the work performed by a contracted shop at a lower rate, so why bother negotiating with independent shops?” Rick Starbard (Rick’s Auto Body; Revere) prizes the ability to operate his business independently. “We have never participated in any referral or programs with any insurer. After the passage of the Massachusetts Insurance Reform Act back in 1988, it became clear to me – even as the young shop owner I was back then – that I couldn't be beholden to my customer while under a contract with their insurance company. The vehicle owner is my customer, not the insurance company.”
“After seeing how some of these contracts are written and what they require from repairers, I can't see how a shop can be profitable with some of the giveaways,” Starbard added. “I would rather market myself and be consistent with a flow of customer choice work than be in fear that an insurer may not send me any more work because I wanted to be fairly compensated for a safe, qualityYet,repair.”shops’ fear of being unable to maintain profitability seems unfounded.“Wewere concerned when we decided to get off the referral lists,” Lamborghini admitted. “But we found that it actually had very little impact on our business; after two years of being removed from all programs, our business has flourished because we do a great job of taking care of our customers and their vehicles. Although insurers can suggest a shop, most customers conduct online research before choosing a shop, so while I understand and respect shops’ fears, I believe that any shop with a good reputation, that does quality repairs and genuinely cares about their customers should be able to operate without ‘referrals’ from any insurer.”
customers, and although we’ll work with their insurance company, the customer always comes first.”
All of this begs a single question: What’s stopping more shops from canceling their program and referral contracts?
“Fear,” Lamborghini answered succinctly. “Shops are afraid they’ll be steered against if they ask to be removed from the program, and the insurance industry has perpetuated that fear.”
Correia confirmed, “We got off the majority of programs in the early 2000s, but we kept two specific carriers until last year. My name was on their list, but they weren’t pushing assignments to me, so I didn’t really notice any dropoff from those companies when I removed my shop.”
“Insurers like to look at the things they can control (parts selection, repair versus replace and refinish), and they tend to have strict criteria associated with those things when you’re in their programs or on referral lists,” Belsito noted. “They refuse to pay for blending during the refinish process, and they push you harder to repair things that shouldn’t be repaired. Insurers have a lot of power, so they’re going to push the limits. As a result, many shops are forced to eat costs they should be getting reimbursed for, or they’re restricted by the contract in some other way. Eliminating those contracts means that I can follow my own requirements… and my Currently,conscience.”A.P.C.
“There’s a fear we have,” Correia corroborated. “We’ve built this business, and we have responsibilities, like mortgages and families to support. Insurers have done a brilliant job of convincing shops how good they are for the last 30 years, so many feel their lives will collapse if they pull away from those contracts, but in reality, it’s merely ‘learned helplessness.’ Shops complain about doing additional work and wonder why they have to beg on their knees for corrective legislation, but truthfully, we’re all part of the problem if we don’t recognize how flawed these programs are. Insurers don’t have your needs in mind – or those of your customers; they only care about profits…theirs, not ours!”
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“Insurers shouldn’t limit the insured’s access to a proper repair, and when they make decisions at the expense of quality, it’s a bad situation.“Some shops stay on programs because their contracts don’t require them to mirror match, or they’re able to submit supplements and continue the process, but if it can be done that way for them, why can’t non-program shops do it the same way since it benefits the consumer?” he asked, remembering the first referral program he asked to be removed from. “We had a conflict with a large insurer about their refusal to pay for scans per the OEM requirements, so we decided to balance-bill the customer instead of losing money on the job. The insurer threatened to remove us from their list if we billed the customer, and I told them, ‘Don’t threaten me! Take me off the list.’ That insurer has a huge market share, and our business reflected that, so deciding to walk away was scary, but we repair just as many of that insurer’s cars as ever before. “If you’re providing safe, quality repairs and delivering outstanding customer care, referral lists should have no impact on your shop whatsoever,” Lamborghini continued. “If you’re legitimately afraid that removal from a referral list will prevent you from getting customers, it’s time to take a good hard look at your customer service process and how you’re repairing cars. If you can’t stand on your own merits, are you really doing the right thing?”
If you can’t stand on your own merits, are you really doing the right thing?
Greco Publishing has successfully served the automotive repair industry for over 30 years in print, online and as an association liaison. Our publishing team handles all pre-press production in-house, from ad design to editorial layout. Greco Publishing also provides a variety of different services to cover the needs of our clients, helping to facilitate day-to-day business. We do all of the heavy lifting so you can focus on what’s most important:
GETTING YOUR MESSAGE OUT THERE.
32 September 2022 New England Automotive Report influenced by them in negative ways.”
“I’m a strong proponent that repair shops should be independent. There’s no need for programs…any quality repairer with the ability and technology to efficiently repair the vehicle should be able to utilize those skills in the customer’s best interests, whether they’re on a program or not,” Lamborghini lamented.
Does participating in a referral or program contract inhibit shops’ ability to take care of their customers and perform safe, quality repairs? Find out what Massachusetts shops think in next month’s feature, “Are Referrals ‘The-Right-Thing’ Resistant?” in New England Automotive Report
[COVER] STORY continued from pg. 29 MASSACHUSETTS THOMAS GRECO PUBLISHING info@grecopublishing.com973.667.6922
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(1) Is there insurance coverage at all? In Massachusetts, it is your choice whether or not to purchase first-party coverage. And there are multiple types of first-party coverage that you can choose to buy, •including:“Collision”
If your car is stolen, comprehensive coverage will also pay for substitute transportation, but only after a 48-hour wait following the theft, and then only $15 per day for up to the earlier of 30 days or when your car is recovered.
• “Substitute Transportation” pays for a rental car or other substitute transportation if your car is in a collision and cannot be used, or if it is damaged and covered by comprehensive coverage and cannot be used. You can purchase $15 or $30 per day coverage, for up to a total of $450 or $900.
coverage pays for direct and accidental damages to your vehicle caused by collision (duh!). If you have collision coverage, then your insurer will pay the full cost to repair your car, up to the actual cash value (ACV) of the car, less any applicable deductible. If your car is a total loss, the insurer will pay you the full ACV. The standard deductible, as set by statute, is $500. But you can choose to save money on your premium by purchasing a higher deductible, or you can opt to pay a bit more and buy a lower deductible. Under collision coverage, your insurer will also pay the “reasonable” costs of towing, recovery and storage of your damaged vehicle. While purchase of collision coverage is optional, if your car is financed or leased, then the finance or leasing company will require that you purchase it.
What
There are multiple factors to be considered in making this decision, including:
The problem, of course, with making a third-party claim against
• “Limited Collision” coverage is similar to regular collision coverage but costs a lot less to buy; however, your insurer will pay for damages only if you are no more than 50 percent at fault and if you get hit by a vehicle whose owner can be identified. You automatically will be considered to be no more than 50 percent at fault if your car is hit while it is parked, if you are rear-ended or if the operator of the other car is convicted of certain violations of law related to their driving.
34 September 2022 New England Automotive Report [LEGAL] PERSPECTIVE by James A. Castleman, Esq.
The other person’s insurance is governed by the insurance contract they have with their insurer, and a claim that you make is not direct but is submitted as a “third-party” claim. That is, technically, your claim is not against the other insurer at all; it is actually against the other driver. But that person’s insurer is obligated under their insurance contract to pay you for damages that they cause. Third-party coverage is not “no-fault.” The other person and their insurer are obligated to pay to repair your car only if the damage was caused by the other person’s negligent conduct; they will not pay to fix your car if you caused the collision. So, how do you decide which insurer to make a claim against?
The basic difference between first and third party
The insurance that you have through your own insurer is called “first-party” coverage. It is governed by the terms of the written insurance contract that you have with your insurer. It is “no-fault” insurance, meaning if you have purchased the right coverage, your insurer is obligated to pay the cost to repair your car, no matter who was at fault in the collision that caused the damage.
• “Comprehensive” coverage pays for direct and accidental damage to your car caused by something other than a collision. This would include, but not be limited to, damage caused by fire, theft, vandalism, flooding, hail, windstorm or hitting a moose that is crossing the road. Payment is subject to the deductible that you purchase, again $500 unless you purchase a higher or lower amount, except that there is no deductible for glass breakage.
You were minding your own business, idling at a stop light, when someone behind you got distracted and plowed into the back of your car. It turns out it will cost a significant amount of money to repair the damage. Your car is insured, and you have collision coverage. But the person who hit you is insured as well. You could file a claim with your own insurer. Or, instead, you could seek to get paid by the other person’s insurer. Which is the better option? And could you actually make a claim against both insurers?
• “Waiver of Deductible” coverage is a type of coverage that you can choose to purchase in addition to collision coverage. If you pay for this coverage and the other driver is determined to be more than 50 percent at fault and can be identified, then you do not have to pay your deductible amount.
For each of the above first-party coverages, it is your choice whether to purchase the coverage, and it’s also your choice as to how much of a deductible to purchase. You may also have chosen how much substitute transportation coverage to buy. While first-party insurance covers you in full, without consideration of fault, it will only cover you if you buy it, and exactly what it pays for will be limited by exceptions and limitations set out in your auto insurance policy.On the other hand, there is only one type of third-party insurance that will pay for damage to your car, “Property Damage Liability” coverage, and this type of coverage will pay for ALL of the types of first-party damages – and more. By statute, under this coverage, insurers must pay “all sums the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including loss of use thereof.” And, under Massachusetts law, a responsible party is generally legally obligated to pay all reasonably foreseeable damages caused by their conduct. Further, property damage liability insurance is mandatory in Massachusetts. Every insured driver in the state needs to have it.
is Best: First- or Third-Party Claims? continued on pg. 36
36 September 2022 New England Automotive Report [LEGAL] PERSPECTIVE continued from pg. 34 another driver’s insurer, is that you need to be able to establish that the other party was negligent and, as a result, caused the damage to your (2)car.How much coverage is there? With first-party insurance, you know how much coverage there is. For collision, limited collision and comprehensive coverage, the insurer is obligated to pay the full cost (less your deductible) to repair your vehicle, up to its ACV or, if the car is totaled, the full ACV. You also know how much of a deductible you have purchased and how much substitute transportation coverage. And, again, your insurer will pay the full amount no matter who is at fault.
(1) Depending on the situation, if you have purchased sufficient first-party coverage, it is generally easier to make a claim against your own insurer. As an example, if you have collision coverage and have purchased the waiver of deductible option and substitute transportation coverage and your car was hit by an identified driver who clearly was at fault, it is easier and quicker just to make a firstparty claim against your own insurer, unless there are particular significant damages sustained that you can collect only on a thirdparty(2)claim.
(3) There are some damages that you can collect on a third-party claim that you may not be able to collect on a first-party claim. As an example, because of limitations in the standard Massachusetts auto insurance policy, you cannot collect anything for the inherent diminished value of your car resulting from an accident on a firstparty claim. But as the result of a recent court decision, you can collect inherent diminished value on a third-party claim – if you can establish that there truly has been a loss in value. You cannot collect substitute transportation costs beyond the coverage that you have purchased on your own auto policy, but there is no limit to what you can collect on a third-party claim, as long as the amount is reasonably foreseeable.
(6) Before making a decision, make sure you know what type of continued on pg. 38
Particular issues to consider
Depending on the situation, if you have NOT purchased sufficient first-party coverage, you may be better off pursuing a thirdparty claim. If you have not purchased collision coverage, or if you have purchased collision coverage with a high deductible and you have only minor damages, you may be better off making a thirdparty claim, particularly if liability is clear. Do you have collision coverage with a $1,000 deductible, but only $1,200 in damages, and the other driver rear-ended you? You may be better off making a third-party claim.
While third-party insurance may pay for more and is required to be purchased in Massachusetts, the minimum required coverage limit is only $5,000. And whatever coverage limit has been purchased by the other driver, their insurer is obligated to pay only up to the amount purchased toward the total of all elements of damages, including cost of repair, substitute transportation, towing and storage, Anotheretc.problem with third-party coverage is that, even if the other driver was negligent and caused damage to your car, their insurer will not be obligated to pay the full amount of your damages if you were also negligent and partially responsible for the loss.
Massachusetts is a “contributory negligence” state, meaning that you must look at how much each party’s negligence contributed to the loss in determining damages that can be collected. If the other party was not more negligent than you, you cannot collect anything. If they were more negligent than you, then the amount you can collect is based on the relative percentage of negligence of each party. If the other party was 75 percent at fault, you can collect only 75 percent of your total damages on a third-party claim. If they were 100 percent at fault, you can collect 100 percent of your damages.
(4) You may be better off making a third-party claim if your car has been totaled but you want to keep the car. Maybe the car can be repaired for a reasonable price and you really like the car. On a firstparty claim, your insurer has the right to declare the vehicle a total loss, pay you the ACV and take title to the car. On a third-party claim, the other party’s insurer cannot force you to give them the car – although the amount of their claim payment will be reduced by the salvage value of the vehicle.
(5) Whether you make a first- or third-party claim may depend on who the insurers are. If you know that either the first-party insurer or the third-party insurer is more reasonable in settling claims and in what they will pay, you may want to make a choice on how to proceed based on which insurer you think will pay more. I am aware of at least one insurer that almost always tries to claim that their insured was less than 100 percent at fault, no matter what the facts are. On the other hand, if your insurer has a reputation for nickel-and-diming claimants, but the third-party insurer does not, you may be better off with a third-party claim.
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38 September 2022 New England Automotive Report [LEGAL] PERSPECTIVE continued from pg. 36
(7) Be aware that you can make a first-party claim, but still ALSO make a third-party claim for at least some of the items that your insurer will not pay for. This commonly occurs when a person does not have substitute transportation coverage. They can make a collision claim against their own insurer for the cost of repairs (and hopefully they also have a waiver of deductible coverage), while seeking to have the third-party insurer pay for their rental car. In fact, I recently did this. Someone hit me and was clearly at fault (they lost control of their car and turned into the rear side of my car). I had full collision coverage with a waiver of deductible. I also had substitute transportation coverage…but only for $15 per day and with the usual 30 day limit. I only could find a rental car for $29 per day, and then because of issues with getting parts during the pandemic, it took more than 30 days for repairs to be completed. My insurer paid for the repairs and for $15 per day for my rental for 30 days, but the third-party insurer ended up paying the balance of my rental bill. This technique could also be used to collect inherent diminished value from a third-party insurer, even when you are making a claim against your own company for the cost of repair and rental(8)coverage.
Conclusion
first-party coverage you have and how much property damage liability coverage the other vehicle owner has purchased. Do you have full collision coverage? Waiver of deductible? Substitute transportation? Does the other driver have sufficient coverage limits to pay for repair of your vehicle plus substitute transportation? Know what you are dealing with.
There may be big differences on what you can collect on a firstparty claim versus a third-party claim. And in the right situation, you may be able to choose which type of claim to make. But before you make that choice, you need to know what may be covered for each type of claim in your particular situation, so that you can make the most intelligent and beneficial choice.
Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at jcastleman@prclawoffice.com MASSACHUSETTS
When you subsequently make your own third-party claim for rental coverage and diminished value, that is going to get tacked on to whatever your insurer already got paid when looking at whether there is enough third-party coverage.
If you do make a first-party claim and also make a thirdparty claim for additional damages, understand that whatever liability limits the other vehicle owner purchased will be applied against the full amount of both claims, not just your third-party claim. If another driver was responsible for the damage to your car and you make a first-party claim, your insurer is going to “subrogate” against the other driver’s insurer, i.e. they are going to seek reimbursement from the third-party insurer for whatever they have paid out, and this amount counts against the other driver’s liability coverage limits.
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40 September 2022 New England Automotive Report
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