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McCOYS Auto Body Labor Rate Continues to Be Source of Contention between Shops and Insurers
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New England Automotive Report
November 2021 • Volume 19, No. 11
DEPARTMENTS
CONTENTS NATIONAL FEATURE
EXECUTIVE DIRECTOR’S MESSAGE by Evangelos “Lucky” Papageorg 6 | There’s Nothing Wrong to See Here! LOCAL NEWS 8 | Protecting Consumers to Safeguard Repairers: AASP/MA Returns to WSAR 10 | ADALB Kicks the Can Down the Road Again 12 | Just for Fun: Reader Feedback 18 | 2021 AASP/MA Golf Outing Highlights
26 | All Roads Lead to Calibrations: An ADAS Expert Roundtable
by Chasidy Rae Sisk & Joel Gausten
COVER STORY NATIONAL NEWS 14 | Industry Members React to White House Position on Right to Repair VENDOR AFFINITY PROGRAM MEMBER SPOTLIGHT 24 | Crown Collision Solutions by Alana Bonillo LEGAL PERSPECTIVE 42 | Replevin – Can It Defeat Your Garage Keeper’s Lien? by James A. Castleman, Esq.
ALSO THIS ISSUE 7 | AASP/MA MEMBER APPLICATION 25 | AASP/MA VENDOR AFFINITY PROGRAM SPONSORS
HATFIELDS VERSUS
McCOYS 34 | Hatfields versus McCoys:
Auto Body Labor Rate Continues to Be Source of Contention Between Shops and Insurers by Chasidy Rae Sisk
New England Automotive Report
November 2021 5
EXECUTIVE DIRECTOR’S MESSAGE
There’s Nothing Wrong to See Here! EVANGELOS “LUCKY” PAPAGEORG
Unless you have either been living in a vacuum or you have not been working in the collision repair industry, you may be tempted to believe what insurance representatives recently presented as testimony during the Joint Committee on Financial Services (previously known as the Joint Committee on Insurance) hearing. Each and every person representing the insurance industry provided testimony in opposition to all six Labor Rate bills under consideration in the current legislative session. It is the exact same position they have taken for nearly 20 years. Indeed, some would say it goes back to the days of the Automobile Insurance Reform Act of 1988 (listen to testimony from the hearing at https://malegislature.gov/Events/Hearings/ Detail/3914). If you have been attempting to survive, let alone make an actual living in the collision repair industry, you are keenly aware of ALL the changes you have faced over the last 33 years since the Reform Act of 1988 was passed. It will not surprise you to hear that since that time, your cost of doing business has increased here in the northeast region of the country by 124 percent. During that same time, the minimum wage has increased by 270 percent, and the average insurance premium has risen by 261 percent, while the rate which insurers have paid to reimburse their claimants has increased by a mere 33 percent since the Reform Act was passed. Based on the insurance industry’s testimony, they
STAFF
AASP/MA EXECUTIVE COMMITTEE
PUBLISHER
President Kevin Gallerani
Thomas Greco | thomas@grecopublishing.com
SALES DIRECTOR Alicia Figurelli | alicia@grecopublishing.com
EDITORIAL/CREATIVE COORDINATOR Alana 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.com
PUBLISHED BY: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963 www.grecopublishing.com
continued on pg. 48
Vice President Matthew Ciaschini
Treasurer Dana Snowdale
Secretary Gary Cloutier
AASP/MA STATEWIDE DIRECTORS Director At-Large Adam Ioakim
AASP/MA DIRECTORS
Legislative Director At-Large Tom Ricci
ZONE 1 Mike Penacho Dan Wenzel John Studer
ZONE 2 Ray Belsito Joshua Fuller Brenda Lacaire
Affiliate Director Rick Fleming
Affiliate Director Bill Spellane
ZONE 3 Andrew Potter Brian Stone Phil Morin
AASP/MA ADMINISTRATIVE OFFICE AASP/MA Executive Director Evangelos “Lucky” Papageorg
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 © 2021 by Thomas Greco Publishing, Inc. Images courtesy of www.istockphoto.com
6 November 2021
see NOTHING wrong here. The insurance industry has been portraying themselves as the heroes in the fight to contain costs. It is true that the Reform Act of 1988 demanded they implement cost containment measures, but those mandates did NOT give the insurance industry the right to turn a blind eye to the multitude of changes in vehicle technology and repair requirements over the past three decades. Nor did the Reform Act give insurers the right to carve into stone, “We don’t pay for that,” or “That is part of the cost of doing business.” Another important fact is that, along with the advent of “competition” among the insurers in the Commonwealth, the cost containment mandates were lifted; however, it appears the message has been slow to reach insurers. Premiums have been steadily increasing, yet insureds are getting less and less for the increases they are paying, and then, they are penalized for submitting claims by way of surcharges – all while the rate of labor reimbursement has been absolutely stagnant. Again, the insurance industry sees NOTHING wrong here! Insurers continue to prove that their overriding drive and goal is to maximize profitability at the expense of the vehicle owner and the collision repairer. They do this because we LET them do so. I have spoken and written many times
New England Automotive Report
AASP/MA Administrative Assistant Alana Bonillo
WWW.AASPMA.ORG
Collision Director At-Large Rob DelGallo ZONE 4 Kevin Kyes Jim Marshall Paul Tuscano Affiliate Directors Frank Patterson Jeff White Don Dowling P. O. Box 850210 Braintree, MA 02185 617-574-0741
Membership Application 2021-2022
AASP-MA P.O. BOX 850210 Braintree, MA 02185 Phone: 617-574-0741 Fax: 973-235-1963 Email: admin@aaspma.org
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: _______________________________________________________________________________________________________________ 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 ___/____/2021) following MONEY SAVING BENEFITS: Yes � Please send me information regarding the � Dental plan � Healthcare plan � Credit card processing � All three 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: ____________________________________________________ I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/MA) for membership dues 2021-2022 as provided for in this contract. *Membership Dues are for a twelve-month period commencing on your anniversary month of membership.
REV 07/21 MDA
New England Automotive Report
November 2021 7
[LOCAL] NEWS
Protecting Consumers to Safeguard Repairers: AASP/MA Returns to WSAR
AASP/MA Executive Director Lucky Papageorg and his assistant, Nadine Nesbitt – a Massachusetts-licensed auto damage appraiser and insurance agent, returned as guests on “Everything Auto with Mike Penacho” – the weekly radio show on WSAR 1480 AM/95.9 FM, hosted by AASP/MA Zone 1 Director Mike Penacho (Mike’s Auto Body; Fall River). As with previous visits, their appearance on September 13 provided the motoring public with valuable information and tips designed to protect consumers and enlighten them about the various ways that the association continues to work in their best interests. Nesbitt began with a topic near and dear to listeners’ hearts – money – as she explained that consumers must pay excise taxes for the privilege of using Massachusetts roadways. “If you don’t pay the excise tax on time, you’ll automatically be subjected to fines and penalties, yet if you want a refund, you have to apply for it, and people don’t know this, so the state keeps that money.” Noting that the excise tax and registration abatement forms are available on AASP/MA’s website, Papageorg pointed out, “We supply that information to Massachusetts consumers because one of our association’s main goals is to protect the consumer because the consumer is our lifeblood; when we protect the consumer, we ultimately protect the collision repair industry as a whole.” After describing how insurers write basic preliminary estimates, often resulting in the need for significant supplements, he clarified, “When a vehicle is damaged, the process is designed to ensure that the vehicle owner is fully aware of what it will take to repair that vehicle back to its pre-loss condition. That ‘estimate’ is the basis for what the insurance company owes the customer; the ‘estimate’ is the blueprint of the required and necessary repairs. “A lot of people think that it’s kind of a triangular relationship with the body shop working for the insurance company, but we
don’t – we work for the vehicle owner,” he added. “Sometimes, the insurer pays the shop, but only with the customer’s authority, and that doesn’t negate the fact that the owner of the vehicle is the body shop’s true customer.” As he emphasized the need to properly enforce regulations, Papageorg mentioned House Bill 327/Senate Bill 182, which has a goal of empowering the laws related to insurer abuse by moving governance of the Auto Damage Appraisers Licensing Board (ADALB) from the Division of Insurance (DOI) to the Division of Professional Licensure. “It is a conflict that causes many issues because no action is taken against appraiser licenses who work for insurance companies when complaints are filed against them,” Papageorg commented, noting that House Bill 327 also proposes an increase in the number of people sitting on the ADALB. “Currently, there is no consumer representation on the ADALB, so our legislation would add two voices to the panel: one from the Attorney General’s Office of Consumer Protection, and another from a consumer protection agency. Yes, the laws and regulations are critical for body shops, but ultimately, we’re advocating for our customers to make sure their vehicles are repaired properly and safely – and that we are being properly reimbursed to do so. “Because when the insurance companies refuse to keep pace with the expenses associated with repairing today’s vehicles, shops have no choice but to pass that expense on to consumers,” he continued. “Insurers have brainwashed the public to believe that they set the rate, but in truth, they do not have one iota of authority to set the rate for the collision repair industry – not one!” “Everything Auto with Mike Penacho” airs every Monday at 2 pm on wsar.com. Archived recordings of the September 13 and previous episodes are available at aaspma.org. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
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New England Automotive Report
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November 2021 9
[LOCAL] NEWS
ADALB KICKS THE CAN DOWN THE ROAD AGAIN
On October 5, the Auto Damage Appraiser Licensing Board (ADALB) convened by teleconference to resume its review of the key issues raised in a 2016 letter from the Division of Insurance (DOI) regarding some of the Board’s proposed and submitted amendments to 212 CMR 2.00. Although the ADALB voted to approve and submit revisions to its current regulations in October 2016, a letter sent from the Office of the Secretary of Administration and Finance on February 8, 2021 informed current ADALB Chairman Michael Donovan that, while the Board may continue the process of amending its regulations, it must consider issues raised by the Division of Insurance on December 1, 2016 - more than four years earlier! When Board member Bill Johnson (Pleasant Street Auto; South Hadley/Belchertown) questioned why information provided by the DOI just two months after the initial proposal was not provided for nearly five years, Board member Rick Starbard (Rick’s Auto Collision; Revere) agreed: “It’s a slap in the face to everyone who put hours and hours
into clarifying the existing regulations.” “These are the frustrations that occur in government,” Donovan admitted. Despite Johnson’s urging that the group “get those four questions resolved and move on,” the ADALB ultimately came to an agreement on half of the issues presented in 2016 and voted to seek clarification on the remaining two issues, which will be discussed at the ADALB’s next meeting on November 23, along with any new concerns or recommendations from the Board. AASP/MA members are strongly urged to listen to the recording of the October 5 meeting in the Members Only section of aaspma.org for insights into the ongoing disagreement related to semantics that continues to ensue during these meetings. The original proposed revisions can be found on the October 5 meeting agenda, available at mass.gov/doc/adalb-meetingnotice-10-5-2021/download. More detailed coverage of this meeting appears in the October issue of the Damage Report newsletter.
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
10 November 2021
New England Automotive Report
New England Automotive Report
November 2021 11
0620_Volvo_Quarter.qxp_Layout 1 5/11/20 4:53 PM Page 1
Just for Fun: Reader Feedback!
JUST4FUN Quality Repairs Start With Volvo Genuine Parts. For over eight decades, the Volvo name has been synonymous with unmatched quality and performance. that legendary Volvo quality starts with Volvo Genuine Parts. Rely on Volvo Genuine parts to get the right fit, at the right price, right now. Please contact the following dealers for your Volvo parts needs: Prime Volvo Cars 1030 Hingham Street Rockland, MA 02370 Parts Direct: 781-927-3520 Fax: 781-927-3592 www.volvocarssouthshore.com
Volvo of Wellesley 962 Worcester Street Wellesley, MA 02482 Parts Direct: 800-247-3033 Fax: 508-651-1220 www.volvoofwellesley.com
Did you catch our “Just for Fun” feature on Famous Repair Shops of TV and Film in our August issue? A reader called in to tell us about one we missed: Desert Body & Custom from the short-lived Comedy Central show American Body Shop. The show aired from July to September 2007 and starred a handful of comedians, including Nick Offerman (most known today for his role as Ron Swanson on Parks & Recreation). The show centered around a dysfunctional body shop in suburban Phoenix, AZ and its accident-prone crew. Do you have any feedback for us on this or any other article? Contact Alana Bonillo at alana@ grecopublishing.com. PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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New England Automotive Report
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[NATIONAL] NEWS
Industry Members React to White House Position on Right to Repair President Biden recently issued an extensive Executive Order that could have a considerable impact on the independent automotive industry’s ongoing efforts to promote Right to Repair. In his “Executive Order on Promoting Competition in the American Economy,” the President urges the Federal Trade Commission (FTC) to address and remove restrictions imposed by manufacturers against independent entities that seek access to those manufacturers’ repair information and procedures. Although the Executive Order does not specifically identify the independent automotive repair and service industries, provisions found in the document could be interpreted to apply to these fields as well. In a special Executive Order Fact Sheet, the White House noted that the President “encourages the FTC to issue rules against anticompetitive restrictions on using independent repair shops or doing DIY repairs of your own devices and equipment.” Further, the Executive Order targets “unfair data collection and surveillance practices that may damage competition, consumer autonomy and consumer privacy” and “unfair anticompetitive restrictions on thirdparty repair or self-repair of items, such as the restrictions imposed by powerful manufacturers that prevent farmers from repairing their
own equipment.” Not surprisingly, the Executive Order immediately prompted enthusiastic reactions from long-standing advocates for Right to Repair in Massachusetts. “We applaud the President’s motion to address a consumer’s right to choose where they get their devices repaired,” offered Tommy Hickey, director of the Massachusetts Right to Repair Coalition, in a statement to New England Automotive Report. “We continued on pg. 49
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14 November 2021
New England Automotive Report
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New England Automotive Report
2021 AASP/MA
GOLF OUTING
HIGHLIGHTS
SEPTEMBER 15, 2021 HERITAGE COUNTRY CLUB, SUTTON, MA 1 PHOTOS BY CHASIDY RAE SISK
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CONGRATULATIONS TO THE
WINNERS FIRST PLACE TEAM:
Matt Ciaschini, Mike Rainville, Dennis Yarrows, Bob Rainville
SECOND PLACE TEAM:
Ron Lanoue, Dave Gallerani, Steve Nigro, Kevin Gallerani
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THIRD PLACE TEAM:
John Guerin, ScottAttarian, Kevin McNally, Chris Morin
PUTTING CONTEST WINNERS:
Brad Teal (Enterprise), Mike Rainville (Full Tilt Auto Body & Collision), Mike Johnson (Crown Collision Solutions) three way tie, split prize AASP/MA's first-ever Ball Drop was a hit with this year's players, and with winner Jack Lamborghini, too!
THE PLAYERS:
BALL DROP WINNER: Jack Lamborghini
LONGEST DRIVE WINNER: Mike Rainville
(All teams are listed L-R)
1: Kevin Parsons, Brad Teal, Tom Walling, Seth Roy 2: John Guerin, Scott Attarian, Chris Morin, Kevin McNally 3: James Gray, Dave Massaro, Daniel Clark, Matt Ingellis 4: Brian Lightbown, Eddie Marino, CJ Timmons, Kyle Doyon 5: Steve Nigro, Dave Gallerani, Ron Lanoue, Kevin Gallerani 6: Steve Litwin, Patrick Longhi, Steve Creanza, Rob Clark 7: Don Peloquin, Matt Peloquin, Sean VanDale, Rich Connor 8: Chris Bird, Ray Belsito Jr, Ray Belsito Sr, Matteo Belsito 9: Ed Rachwal, Michael Cox, John Studer, Mike Johnson 10: Kent Boucher, Jack Lamborghini, Jason Peloquin, Paul Balay 11: David Lyons, Gaarrett Mann, Scott MacDonald, Matt Munsell
12: Dana Snowdale, Pat Capello, Jon Marchioni, Dan Weaver 13: Ron Lacaire, Scott Lacaire, Kevin Hayden, Craig Lacaire 14: Ken Parker, Fred Schube, Tom Schube, Steve Donahue 15: John Marceau, Sean Wilmot, Bino Dos Santos, Jeff Lanni 16: Don Vermette, Gary Cloutier, Peter Langone, Ed Nalewanski 17: Dennis Yarrows, Matt Ciaschini, Mike Rainville, Bob Rainville 18: John Falzone, Greg Santos, Jeremy Ostrout, Rich Cote 19: Brent Debrosca, Marcel Nault, Chris Thomas, Brian Stone 20: Joe Bostek, Josh Fuller, Matt Mitchell 21: Luis Dannenfels, Alan Brodeur, Tom Ricci, Michael Levy 22: Chris Michalowski, Dan Seaver, Tom Carrigan, Dennis Seaver New England Automotive Report
November 2021 19
AASP/MA THANKS ALL THE SPONSORS OF THIS YEAR’S TOURNAMENT! Longest Drive Sponsor: Long Cadillac Subaru
Tablet Hole-in-One: North Andover Auto Body
Ball Drop Sponsor: Tiny and Sons Glass
Putter Hole-in-One: Marblehead/Swampscott Collision
Putting Contest Sponsor: LKQ Corporation $10K Hole-in-One: Parts Authority, LLC Patriots Away Game Hole-in-One: Quirk Auto Dealers Yeti Cooler Hole-in-One: Al Brodeur’s Auto Body, Inc
Raffle Prize Sponsor: Enterprise Rent-a-Car Breakfast Sponsors: Balise Collision Repair, BASF Corporation, CPrax Internet Marketing & Don Kennet, Inc Lunch Sponsors: Colours, Inc. & Auto Body Supplies and Paint (ABSAP)
Tournament Sponsor: Albert Kemperle
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New England Automotive Report
TEE SPONSORS
Auto Body Supplies and Paint (ABSAP) AkzoNobel Balise Wholesale Parts Body and Paint Center of Hudson Clay Subaru Collision Tools, Inc. Enterprise-Rent-a-Car Fuller Auto Body and Collision Center Grieco Toyota of East Providence McLaughlin Chevrolet Paster, Rice & Castleman, LLC Shamrock Sales Sherwin-Williams
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AASP/MA Executive Director Lucky Papageorg poses with 2021 Golf Outing winners:
Special thanks to the following for contributing items as raffle prizes and giveaways: Lexus of Watertown – two goodie bags; Grieco Toyota of East Providence – softsided tool bag; McGovern BMW – three golf towels, four Motorsport bags, nine hats, eight cleaning kits; McGee Toyota – two Pro V 1 golf balls; Wellesley Volkswagen – two Bluetooth speakers and one Volkswagen camping bus model.
1: The First Place team (L-R): Matt Ciaschini, Mike Rainville, Dennis Yarrows, Bob Rainville (Not pictured) 2: The Second Place team (L-R): Ron Lanoue, Dave Gallerani, Steve Nigro, Kevin Gallerani 3: The Third Place team: (L-R): John Guerin, Scott Attarian, Kevin McNally, Chris Morin 4: Putting Contest Winners: Brad Teal (Enterprise), Mike Johnson (Crown Collision Solutions), Mike Rainville (Full Tilt Auto Body & Collision) 5: Longest Drive winner Mike Rainville 6: 50/50 Winner: Peter Brown 7: "Too many people in this industry have been abused for too long. We need to look at what we need to do to ensure everybody in this industry gets the pay they deserve." -Ball Drop Winner Jack Lamborghini
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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[VENDOR AFFINITY PROGRAM] MEMBER SPOTLIGHT
by Alana Bonillo
Crown Collision Solutions As its name implies, Crown Collision Solutions is dedicated to providing the body shop industry with solutions, specifically for the challenges caused by ADAS calibrations. The new company (launched earlier this year) is the brainchild of Mike Johnson, a veteran of the Massachusetts collision repair industry. Over the course of his 37-year career, he worked his way up from technician to manager and then shop owner. Now, he has partnered with his son Tom to launch a business devoted to performing ADAS calibrations for body shops without the means to do so in-house. Crown Collision Solutions also provides consulting and training services in the areas of office support and estimating. The idea for the Bridgewater-based business was born when Mike saw more and more ADAS technology being used in modern vehicles. “We will never get away from ADAS now that it’s been integrated into the automobile. By 2022, every [new] vehicle will have some sort of ADAS technology,” Mike believes. “I think it’s the greatest thing to happen to the automobile by far. This technology makes cars safer for the driver and passengers, so it’s well worth the additional effort from the shops.” Just four years ago, there was a lot of confusion about ADAS; even while perusing the SEMA Show floor in 2017, Mike noticed gaps in industry professionals’ knowledge about what was needed and why calibrations were required; however, there was a definitive difference in attitudes about ADAS during his last SEMA visit in 2019: “I saw a transition – the equipment had improved, and more people better understood what the calibrations meant for the automobile. Everyone was starting to use the same jargon and beginning to play on the same field.” Soon after, he approached his son, “a newbie to the auto world” with a teaching and technology background. More importantly,
Tom had a strong desire to be involved in something that would positively impact the future. That’s when Crown Collision Solutions was born! Having been a collision repairman for nearly four decades, Mike realizes that most body shop environments are unable to accommodate all of the steps needed to correctly perform calibrations: Some calibrations require 33 feet of unobstructed space in front of the vehicle. Due to the presence of other large equipment, many shops just don’t have room to meet these specifications. “There are mobile companies out there trying to perform calibrations for shops, and if there is no room inside, they do it in the parking lots, and that presents major challenges due to natural daylight, rain or snow, which prevent the calibration from being performed correctly. Also, most parking lots are uneven, and you need a flat surface in order to perform these calibrations correctly.” Ensuring the sensors fit well and are accurately positioned is critical to ADAS performing as intended by the manufacturer: “There’s a reason they have to be set at certain degrees and angles. A lot of old-time body shops think they can manipulate parts on cars, but they don’t realize that affects the calibrations. Sensors should fit like a glove without manipulation.” Seeking to be part of a bigger solution for repairers, Crown Collision Solutions recently signed on as a Silver-level participant in AASP/MA’s Vendor Affinity Program. The father-and-son team believe it’s important to be involved and stay active in an organization that truly is a driving force in protecting the industry. “You can sit on the sidelines and watch others do the work all you want, but you might have been able to propel yourself further by getting involved. Get your marching orders, and do a little something for the common goal to make the industry better.” PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
24 November 2021
New England Automotive Report
A M P/
AAS
Thanks to our VAP Members for their continued support during this pandemic crisis.
"Your Massachusetts Auto Body Association" PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
VENDOR AFFINITY PROGRAM
SPONSORS
MASSACHUSETTS
DIAMOND LEVEL
Volkswagen
PLATINUM LEVEL GOLD LEVEL
SILVER LEVEL
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For more information or to become a sponsor of AASP/MA please call (617) 574-0741 or email admin@aaspma.org. New England Automotive Report
November 2021 25
[NATIONAL] FEATURE
by Chasidy Rae Sisk & Joel Gausten
All Roads Lead to Calibrations: An ADAS Expert Roundtable As modern vehicles become increasingly complex with multiple ADAS installed, it’s more important than ever that collision repairers understand the importance of proper calibrations – but do they truly get it? We reached out to Mike Anderson (Collision Advice), Nick Dominato (adasThink), Eric Newell (AirPro) and Frank Terlep (Auto Techcelerators) to share their thoughts on how adept the industry is when it comes to ADAS and what they can expect in the future.
of jobs have an entry for a calibration, when the number should be much closer to 33 percent. What does it say about our industry’s understanding when we only get the answer right 15 percent of the time? When it comes to ADAS, the industry’s biggest problem is that calibrations aren’t being identified in the estimate – and when they’re not put on the estimate, they don’t get done. When it comes to properly performing calibrations, the estimator is the sun around which our entire universe turns.
New England Automotive Report: ADAS calibration is obviously a massive topic in the industry right now. In general, how would you gauge the industry’s understanding of calibration procedures and its ability to actually perform them in 2021?
Eric Newell: Though the industry is progressing in understanding of these systems, we still have a long way to go. Only 50 percent of vehicles in body shops today are getting properly diagnosed (which means pre and post scans), which is the first step in ensuring these systems are addressed appropriately.
Mike Anderson: In answering that, my comments refer not just to the collision repair industry – I’m referring to the industry as a whole, including service technicians on the mechanical side. Right now, on a scale of one to 10, our industry is probably a one or two. I’m not saying that to be meanspirited, but there are a lot of myths and misinformation out there. A lot of people are just not privy to what needs to be done or how it needs to be done. Whether you do it in-house or sublet the work, you need to know what right and wrong look like. We don’t really know how to ensure calibrations have been performed correctly, and many people don’t understand the consequences when this Nick Dominato work is done incorrectly. That concerns me more than anything else. Mike Anderson
Nick Dominato: The industry gets a failing grade. Why? Our internal data shows that the industry is missing about 85 percent of ADAS calibrations. That is, only about five percent 26 November 2021
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Frank Terlep: Our industry is in the very early stages of understanding calibrations, the importance of calibrations and the actual ability to perform calibrations. There are a small number of shops that have jumped into the ‘calibration game’ and are learning what it takes to be successful. There are also several mobile providers that are providing calibration services, but many of them are not properly performing and documenting calibrations. NEAR: Many shops are subletting this work out these days, but some of them may be unaware that they are ultimately responsible for the work this third party performs. What are some things a shop should keep in mind when selecting an outside company to perform its calibrations? What should these shops expect from these providers? MA: The customer signs an authorization for you to repair their vehicle. If you choose to sublet any part of that work, you’re liable if it’s done improperly. Is there somebody you can subrogate against if they didn’t do something properly? There obviously is, but that doesn’t protect you from being the first line of responsibility. We’re living under a rock if we believe subletting relieves us of liability. ND: The single most important thing you can do is to send documentation to your sublet vendor on how to perform the procedure and require that they provide documentation (where possible) which establishes that they performed the calibration continued on pg. 30
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[NATIONAL] FEATURE continued from pg. 26 properly. This isn’t a lot – just find the procedure page and send it along with the job; then, ask them to provide proof they did it properly. Yes, this includes the dealer because chances are that an ADAS sublet vendor is more proficient than the local neighborhood dealer. From a practical, business perspective, make sure the entity you’re dealing with is professional and has adequate insurance coverage. If you’re found to be jointly liable with a fly-by-night operation, you’ll very quickly understand how little protection you have. EN: There are complexities that shops should understand about calibrations whether they have a third party perform the calibrations or they perform them in-house. Either way, it is the shop’s responsibility to ensure that the calibration is performed properly. For instance, you need to be sure the third party is doing the proper procedures by sending the vehicle with the calibration service information and letting them know you need documentation confirming everything was performed. A statement that merely says ‘calibrated radar $120’ should throw a big red flag. Eric Newell
FT: Many shops believe that Frank Terlep by subletting their ADAS repairs and calibrations, they are not responsible; that is simply not true. The repair contract is between the repairer and consumer, so the shops ARE responsible. When subletting their calibrations, shops become the sublet vendor’s customer and must provide the list of things (documentation and others) they want as part of each repair/ calibration. One of the biggest issues shops have is not receiving detailed documentation outlining everything that was completed. NEAR: Based on your experience, how have insurers responded to shops billing for ADAS calibrations, either as an in-house operation or as a sublet? Are there still gaps in insurers’ understanding of the need for these procedures? MA: No disrespect to anyone, but most insurance company staff appraisers just aren’t educated about when calibrations need to be done. It’s very rare to see it on an insurance sheet, and it typically 30 November 2021
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only gets done after a shop requests it. Also, there are little to no labor times in the estimating databases related to performing calibrations. Eventually, the estimating companies need to come around on that. ND: It’s impossible to give a one-size-fits-all answer to this question. In general, insurers understand that these are safetyrelated operations and will pay for them, if the shop can provide documentation that it’s required by the automaker. Like everyone in the industry, there’s a knowledge gap. But insurers do have a right to ask for documentation proving it’s required. EN: Our shops typically have no issue getting paid for ADAS calibrations, but they do get pushback on the pre and post diagnostic, which is an equally – if not more – important part of the process, because without knowing the vehicle is ‘ADAS ready,’ the calibration isn’t possible. FT: Based on industry statistics, approximately 83 percent of calibrations are being reimbursed by insurers. Most insurers still lag in understanding calibration requirements, but repairers are no better. According to CCC statistics, only 12.7 percent of present year estimates/repair orders include a calibration repair or sublet line. NEAR: How critical are OEM repair procedures in performing a proper ADAS calibration? What are the risks, if any, that are associated with failing to pull these procedures when attempting operations of this nature? MA: Anyone who knows me knows that I’m adamant about using OEM scan tools and targets. As a former collision shop owner who understands profit margins and investments in equipment, I’d love to see a generic solution that goes across all lines; however, that doesn’t exist, and you have to understand that OEM engineers validate OEM procedures at the factory. We can’t think we’re smarter than those engineers. Just as building codes are put in place for consumer safety, OEM repair procedures are established to protect the vehicle owner. ND: If you’re not following OEM repair procedures when you work with ADAS, you’re not calibrating the vehicle – you’re miscalibrating it! At its core, calibration is about recording the position of the sensor in relation to the vehicle and the world. What do you think happens when you align a radar sensor to -1 degree when the car is already on a +5 degree slope relative to the target? The risk of a malfunctioning sensor, as spelled out by every OEM, is serious injury or death occurring to the vehicle’s driver or occupants. Liability-wise, pre-collision systems that actively brake the vehicle present the most potential for danger. There have been many cases of radar sensors inadvertently braking under low bridges, putting
the vehicle in extreme danger of being rear-ended in a highway situation. EN: Following correct procedure is always of upmost importance, whether you are calibrating ADAS or replacing a frame rail. Be sure to pull the service information each and every time, regardless of how many calibrations you have performed. They are your roadmap to a proper repair. FT: OEM repair procedures are CRITICAL to performing a proper repair and calibration on ADAS-equipped vehicles. The risks are high: ADAS systems control steering, acceleration and braking, so if an ADAS repair or calibration is not properly performed and validated, the systems may not operate correctly and could result in a collision and bodily injury - or death. NEAR: What kind of demands will shops see in terms of calibrations in the next handful of years? MA: Some people believe we’ll eventually see ‘dynamic calibrations’ that will enable a vehicle to calibrate itself, but there are limitations. A lot of those vehicles are designed to selfcalibrate when they hit a pothole or experience something else that’s minor. Shops need to start diving deeper into alignment procedures. When a vehicle’s suspension alignment is out of spec, it can affect the ADAS components’ accuracy and require calibrations. Do I think OEMs will eventually simplify the process a little bit? I certainly hope so, but I don’t think that will happen any time soon. ND: We’re going to see more cars needing to be calibrated, and we’re going to see more and more multiple-calibration scenarios where a vehicle may require three to five ADAS calibrations because of one collision. In other words, both the frequency and magnitude of ADAS calibrations is going to go up. This isn’t uncommon for many makes already. What does that mean for shops that are not investing in equipment? If you’re writing proper estimates, prepare to sublet just about every job out for calibrations. At the same time, expect to continue seeing big challenges to the aftermarket, including more security gateways, required locksmith IDs to access modules and additional subscription costs for all of that. EN: In the near future, I would expect every car to require some form of calibration. If you repair vehicles, you should be prepared to address ADAS. FT: Today, there are more than 70 million ADAS-equipped vehicles on our roads. If 15 million new cars are sold per year over the next five years, there will be 145 million ADASequipped vehicles on the road in 2026. We believe that calibrations will be a $1 BILLION dollar business in 2026! PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
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[COVER] STORY
by Chasidy Rae Sisk
HATFIELDS VERSUS
McCOYS Auto Body Labor Rate Continues to Be Source of Contention between Shops and Insurers
“Too many people in this industry have been abused for too long. We need to look at what needs to be done to ensure everybody in this industry gets the pay they deserve.” AASP/MA member Jack Lamborghini (Total Care Accident Repair; Raynham) explained why repairers should support House Bill 1111/Senate Bill 709 prior to the commencement of the Joint Committee on Financial Services hearing on September 15. Introduced earlier this year by Representative James Hawkins (Attleboro), the pro-industry and pro-consumer bill seeks to establish minimum reimbursement rates to insurance claimants, making it easier for consumers to have their vehicles repaired at their shop of choice rather than being forced to settle for shops willing to work at substandard rates. Currently, insurance carriers reimburse auto body shops at an average rate of less than $40 per hour for labor, the same rate “paid 25 years ago,” Hawkins noted. “And that’s not what the employees get; it’s what the shop gets, and they still have overhead costs for technology, training and environmental concerns. That leaves barely over minimum wage that’s being paid to technicians for a potentially dangerous job that requires a lot of skill.” “Massachusetts consumers have the lowest reimbursement rate in the nation, yet it was among the highest when the Insurance Reform Act of 1988 passed,” AASP/MA Lobbyist Guy Glodis added. “Our Labor Rate is now the lowest, yet we operate in the second most expensive state. House Bill 1111 will give consumers 34 November 2021
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greater choice, so we consider this not just a bill for the industry; it’s really a pro-consumer bill as well.” AASP/MA Executive Director Evangelos “Lucky” Papageorg pointed out several less apparent ways that the Labor Rate is “having a dramatic effect” on our industry: “Because of the dwindling number of qualified shops, there’s an increasing period of time that people are forced to be in their vehicles, vehicles that are potentially unsafe to be on the roads in the first place. Once the vehicles end up in a collision repair facility, repair times are significantly extended because there is a true shortage, not just of shops but also of technicians. “An increasingly smaller number of technicians are entering the industry as skilled technicians because they can make more money working as unskilled labor than they can doing a skilled repair job,” he explained. “Working on today’s vehicles at Labor Rates that are 30 years old is absolutely ludicrous; if we had only kept pace with the cost of doing business, our situation would be much more equitable. We would be able to properly compensate our technicians for the knowledge they’ve acquired, and with more people entering the industry, we could perform the repairs in a more timely fashion on behalf of the consumer.” AASP/MA argued that the “prevailing rate” has been based on deals made with a minority of shops in the Commonwealth; however, based on a survey of Massachusetts shops conducted by National AutoBody Research, both the prevailing and competitive
Labor Rates are $58 per hour on average. “Those contractual rates are agreed to on a quid pro quo basis, and it’s having a devastating impact on the consumer as well as the collision repair industry,” Papageorg stated. “Insurers are allowed to have contracts with shops where they set the Labor Rates below market in exchange for marketing services,” AASP/MA member Brian Bernard (Total Care Accident Repair; Raynham) contributed. “Then, they perversely claim their discounted contractual price is competitive – it’s not! It’s a price that they alone can attain through a contract.” Bernard lamented that, due to the low Labor Rates paid, he has recently lost three skilled technicians to unskilled labor positions, while two others took jobs at shops in Rhode Island where reimbursement rates are significantly higher. “It’s brutal, and we need to act now to preserve our industry, lest there be no technicians left to repair your cars.” Brian Mountain (Collision 24; Brockton) observed that Labor Rates have only risen 33 percent since 1988, while insurance premiums have increased 261 percent and minimum wage is up by 270 percent. Despite rapid changes in repair technology and requirements, he has been expected to “keep pace and purchase equipment, and then train and pay today’s technicians based on the substandard rates insurers pay their claimants. “I’ve had to resort to charging customers hundreds of dollars to make up for the substandard reimbursement to be able to afford to pay my technicians a fair wage.” Not surprisingly, several insurance industry representatives
expressed their dissent in regard to AASP/MA members’ testimony. Christopher Stark (Massachusetts Insurance Federation) sees the issue as one of supply and demand, claiming that there has been a decrease in physical damage claims of more than 22 percent since 2013 “as cars got safer.” “At its core, it’s an excess of repair shops and fewer physical damage claims. House Bill 1111 seeks to nearly double the Labor Rate without any contemplation of the cycle time and the length of repairs. We would be rewarding these long cycle times. If we were actually having this problem, cars would be going unrepaired – and they’re not. We can’t believe falsely that a Labor Rate increase is going to result in an increase in wages.” “The auto body industry and the insurance industry are never going to come to an agreement on anything,” Frank O’Brien (American Property Casualty Insurance Association) objected, arguing that no other state in the country regulates the auto body Labor Rate. “There is no free lunch. When you add cost to the system, it has an impact on price, and that impact is not going to be lower prices.” Although Rory Whelan (National Association of Mutual Insurance) acknowledged “issues in the auto repair ecosystem,” he insisted, “If it ain’t broke, don’t fix it. Price fixing results in higher costs, never lowest costs, and those costs are ultimately borne by the consumer… An artificial, arbitrary state mandate on auto repair costs would simply be antithetical to good consumer policy. continued on pg. 38
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[COVER] STORY continued from pg. 34 Alluding to the special commission on auto body rates that is scheduled to issue a report by December 31, 2021, Joint Committee on Financial Services Chair James Murphy urged, “I ask you all to start seriously thinking about what the problem is here and how do we fix it. As a legislator, I do not appreciate anybody coming into our office and drawing a line in the sand and being unwilling to compromise or talk about an agreed-upon solution. As the commission moves forward, I ask all of you, in your infinite wisdom and experience with this issue, to give us some solutions to this problem. “And evidently, there is an issue because the body shops are all saying the same thing,” Chairman Murphy acknowledged. “The Labor Rate hasn’t kept pace with the cost of doing business, the increase in technology and what’s needed to repair today’s vehicles,” Papageorg emphasized. “You cannot repair today’s vehicles based on the rates that were being paid 30 years ago. It’s obvious that something has to be done.” For more information on AASP/MA’s legislation, visit aaspma.org or contact Papageorg at lucky@aaspma.org or (617) 574-0741.
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[LEGAL] PERSPECTIVE by James A. Castleman, Esq.
Replevin – Can It Defeat Your Garage Keeper’s Lien? As has been explained in prior columns, the statutory garage keeper’s lien is a powerful tool for collision repair shops in Massachusetts. Under the statute, “persons engaged in performing work upon or in connection with the inspection, reconditioning and repairing of motor vehicles shall have a lien upon such motor vehicles for proper charges due them for the storage, work and care of the same.” This means that if a shop repairs and/or stores a motor vehicle, then that shop can hold on to the vehicle until it gets paid. Further, the shop’s storage charges can continue to accrue for as long as the shop retains possession. And, if payment is not received, then the shop can bring a court action to obtain an order to sell the vehicle as a way of collecting its charges. As part of that order, if the shop’s repair order is written properly, the shop can also be awarded interest, the costs of the court action and even its attorneys’ fees. Sometimes, the garage keeper’s lien gives a shop the upper hand in negotiating with a customer’s insurer. If the customer has signed a repair order approving of the shop’s repair charges, and the shop has its storage policy and storage charges conspicuously posted, then the shop has an enforceable contract for collection of its charges – no matter what an insurer wants to pay. If a shop has performed the agreed upon repairs, it is entitled to receive compensation for those repairs. And, if a vehicle in the shop’s possession is declared to be a total loss, the shop is entitled to payment for all of its storage charges and all of its disclosed related charges. Assuming that the shop has properly received the customer’s authorization for its charges, it does not matter what the insurer wants to pay. And, so long as the shop holds onto the vehicle, storage charges continue to accrue, and the insurer still may be paying for the customer’s rental car. Under these circumstances, there is a strong incentive for the insurer to settle the claim, even if it means paying more than it wants to. The Insurer’s Answer: Replevin. In Massachusetts (and in most, if not all, other states), an insurer may have a way to stop the bleeding and turn things to its advantage. It can do so by following the provisions of a statute that governs bringing court actions to obtain release – legally, “replevin” - of the insured vehicle. Under the Massachusetts statute, the insurer will need to post a bond for up to twice the amount of the charges 42 November 2021
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claimed, but, if it does so, then it may be entitled to get the vehicle out of the shop without making payment. If that occurs, then the shop no longer has the vehicle in its possession, and may be put into a position of having to sue the insurer – and possibly its customer to get paid. Why should an insurer be able to do this? It does not seem fair to most repair shops. To the shop, the garage keeper’s lien should give it the absolute right to hold onto a car until it gets paid. Why should it have to release the car without having payment in hand? In order to understand why the replevin statute exists, it is important to first understand why the garage keeper’s lien exists, which is to provide security for a shop’s claim for money due. That is, it is there to guarantee that there is something of monetary value to help assure that the shop is going to be able to get paid its proper charges. And, in the eyes of the law, a bond does the same thing. It guarantees that if a shop obtains a court judgment, then there will be money available to satisfy that judgment. The intent of the bond requirement is to put the shop in the same position that they would have been in if they still had the car - even though the reality is that the shop is no longer in that position. What Can a Repair Shop Do to Stop an Insurer from Effectively Using Replevin? While there is no assurance that a repair shop can effectively stop an insurer from getting a vehicle released, there are a number of things that a shop can do to try to keep a car, or to at least minimize the advantage that an insurer can gain through a replevin order, including: (1) First and foremost, make sure that you have received your customer’s proper authorization for your charges. A repair shop’s garage keeper’s lien is only good for its “proper” charges. Ensure that your customer has authorized all of your repair charges. Make sure that your storage policy, storage rates and other related charges are either on your signed repair order, or conspicuously posted in your shop. Confirm that your repair order says that you are entitled to get paid interest at a stated rate on any unpaid charges, as well as the costs of collection, including attorneys’ fees, if your charges are not paid when required. If you have not complied with the legal requirements for obtaining authorization for your charges (as has continued on pg. 44
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[LEGAL] PERSPECTIVE continued from pg. 42 previously been explained in depth in this column), then you are not entitled to get paid for your charges, your garage keeper’s lien will be ineffective, and an insurer will have no problem getting a court order to have the vehicle released. (2) Consider making it financially less advantageous for the insurer to bring a court action for replevin. An insurer bringing a lawsuit for replevin will have expenses. There will be legal fees, filing fees, fees for service of process, and there will be the premium for the bond, etc. And if you win a claim for your charges and have properly drawn your repair order, the insurer may be on the hook for interest and your costs of collection, including attorneys’ fees. If the insurer believes that you are looking for “outrageous” amounts of money for repair or storage charges, there will be more incentive for the insurer to bring a replevin action. On the flip side, if the difference between what you are looking for and what the insurer is willing to pay is within reason, and if the insurer is faced with potentially having to pay significant interest and costs if it loses, there will be less incentive for the insurer to spend the money for the court action, and it may be more willing to negotiate. This does not mean that you should undersell yourself. But if you want to get paid quicker and without having to face a replevin action, be able to justify what you are seeking. (3) Do what you can to make sure that your customer is on your side. If your customer thinks that your charges are reasonable, they can go to bat for you with their insurer. At least some insurers are less likely to seek replevin of a vehicle when they think it will anger their customer. (4) By the same token, consider getting your customer to assign to you their rights against the insurer. If you do this, you stand in your customer’s shoes, allowing you to control the claim against the insurer. Further, this may take away the insurer’s ability to try to use your customer against you. (5) Consider whether the vehicle that you are holding is worth more than you are looking to get paid. If you are going to retain a vehicle with the expectation of being able to sell it to reimburse
your charges, it might not really make sense to fight to keep it. Although you may lose bargaining power if you end up having to release a vehicle, you may be better off if an insurer is required to post a bond equal to twice the value of your claim – as the statute mandates in most cases – rather than relying on the proceeds from the sale of the vehicle. (6) If the vehicle is a total loss (or close to a total loss), consider trying to negotiate an assignment of vehicle title from the insurer in satisfaction of your claim. Does the vehicle have more value to you than it has to the insurer? Can you repair it at a reasonable cost and resell it for a lot more money? If the insurer can cut its losses by paying just a bit more than desired on a total loss, it may be in the insurer’s financial interest to consider such a resolution – and it may make financial sense to you, too. (7) Unless you get what you are looking for, do not allow an insurer to get a vehicle released before they have gone to court to seek replevin. Sometimes, an insurer will try to convince a shop to accept a bond for a vehicle’s release in exchange for posting a sufficient bond without bringing a court action. This can be attractive to a shop, since it prevents the shop from needing to pay its lawyer to defend the action in court. But it also means that the shop is giving up the right to fight the release in court. Ultimately, the choice is yours if you are given this option, and in any particular case, it may make financial sense to consider the offer; however, you must be certain that you understand the consequences before accepting such an offer. (8) If you end up defending a replevin action in court, make sure that your attorney knows what legal defenses may be available, including: • Does the insurer have a right to bring the action? Only the owner of the vehicle, or under the statute, “any other person otherwise having the right of possession” can bring a replevin action. Does the insurer have a right of possession? If the vehicle has been repaired and was not a total loss, then the insurer may not have a continued on pg. 46
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[LEGAL] PERSPECTIVE continued from pg. 44 right to possession. It may claim that the insured is required under the insurance policy to cooperate with the insurer and that this requires the insured to give them the right to possession. I question whether that really applies. It is the insured’s vehicle, and they have the right to possession, not the insurer. Indeed, the insured may not want the insurer to have a right to possession, at least not until they have paid the full charges due. Further, if you have had your customer assign their rights to you, you get to direct what happens in this regard. • On the other hand, if the insurer has paid for the total loss of the vehicle, they have the right to take title to the vehicle under the standard Massachusetts private passenger insurance policy. Has the insurer paid the insured for a total loss? If so, have they paid the full amount claimed? Probably not since you are still holding the car and waiting for payment. • Make sure that you have good evidence to present to the court as to the value of the vehicle and the value of your claim as well as proof that your customer authorized the amounts you are seeking. This gives the court the ability to set a bond that is sufficient to cover whatever you may eventually be able to recover, including your costs. • If the insurer agrees that it owes some amount of money, consider
asking the court to order the insurer to pay what it agrees it owes and to post a bond for the remainder. The insurer gets the car released, but the shop gets paid part of its charges and retains the right to sue the insurer for the balance (and perhaps multiple damages for unfair claims settlement practices for intentionally underpaying the claim). Conclusion Your garage keeper’s lien can be a powerful tool to help you receive proper compensation. Yet, the right of an insurer to seek replevin of a vehicle that you are claiming a lien on can seem like it is infringing on your rights. If an insurer is considering bringing a replevin action to seek release of a vehicle that you are claiming a lien on, know your rights and what you may be able to do to blunt the insurer’s actions and mitigate the effect of the replevin action itself.
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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.
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EXECUTIVE DIRECTOR’S MESSAGE continued from pg. 6 about “learned helplessness.” Many shop owners have grasped this concept and have turned the table on how they think and run their businesses. No longer do they sing the tune, “That will never work,” or “If I do that, I will have an empty shop.” Shops have elected to take a deep dive into their businesses’ financial picture and determine a posted rate which allows them to adequately cover the expenses they incur in fixing modern vehicles with modern technology and equipment. Many have learned the value of speaking to their customers and making them acutely aware of what their insurance companies expect a shop to do at a substandard and artificial set rate of reimbursement. I firmly believe in the position statement AASP/MA adopted, which is posted on our website for all to read. At the core of the issue of proper reimbursement to the consumer is the underhanded way insurers got legislators to pass the Insurance Reform Act of 1988: They convinced legislators that they would fairly pay consumers directly and give them the opportunity to choose their repairer, thereby increasing competition among repairers and driving down the cost of repair. Conversely, what they have actually done over the last 33 years is to systematically and artificially remove competition from the equation – along with fairness, morals and ethics. They have preyed upon uneducated consumers and repairers. They have done so through misleading word tracks meant to simply intimidate and bend vehicle owners and repairers to compliance. Again, there is great news – more and more shops, along with their customers, are saying, “Enough is enough!” Shops, while looking at their source of work and customers, are realizing that being on referral lists and involved in programs is not worth ALL the concessions being made. Nor is it worth being used as a “tool” by insures to set artificial “prevailing” Labor Rates. Shops have been removing themselves from those contracts. I realize that some who are reading these words are saying, “Great, more work for me.” The fact of the matter is the shops who have decided to break free see little or no drop in workflow and are able to work for their true customer, the vehicle owner. In many of those same instances, they collect their posted Labor Rates and assist the vehicle owner in getting reimbursed from their insurer. Interestingly, many of those reimbursements are through “blind” checks to the vehicle owner. The reimbursement checks are “blind,” meaning the amount of what additional monies the vehicle owner is paid does not contain any reference to a claim number or any explanation on the check. I guess they just do not want to pay you, the shop directly. Of course, I am just speculating about that being the reason; there is probably another “good explanation.” Three representatives of AASP/MA, along with representatives of the Massachusetts State Automobile Dealers Association and the vocational schools, are part of the new Labor Rate Study 48 November 2021
New England Automotive Report
Insurers continue to prove that their overriding drive and goal is to maximize profitability at the expense of the vehicle owner and the collision repairer... because we LET them do so.
Commission which is scheduled to meet, have public hearings and submit a report to the legislature by December 31, 2021. These hearings offer an opportunity for you and your customers to come and voice your frustrations when dealing with the claims process and being fairly compensated for the highly skilled and technical repair work you perform. If you fail to attend and be a part of the outcry, and if you succumb to “learned helplessness,” you will only have yourself to blame. Those who are making the effort need to be a strong alliance, working toward a common goal. If you are not one of the shops who have realized that you are being used, I hope you will soon. I hope you will stop subsidizing insurers for today’s repairs in the hopes that you will, once again, get to fix a future vehicle at a substandard rate, while performing procedures for free in order to safeguard your liability. Please read our mission statement and position statement on our website, aaspma.org. If you believe the following statement, “… 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” is true, then join us NOW. See the application on page 7. It’s time to understand that section seven of the Massachusetts insurance policy (which reads, “The cost to repair the auto is limited to the prevailing competitive price, which is the price we can secure from a licensed repair facility conveniently located to you”) is the bane of our existence and how you can make the independent business decision to change the adverse effects it is having on our customers and the collision repair industry. Please review the October issue of our members-only newsletter, Damage Report, for more information regarding section seven of the insurance policy.
PROTECTING CONSUMERS AND THE COLLISION INDUSTRY
MASSACHUSETTS
AASP/MA EXECUTIVE DIRECTOR EVANGELOS “LUCKY” PAPAGEORG can be reached at (617) 574-0741 or lucky@aaspma.org.
[NATIONAL] NEWS continued from pg. 14 believe if the consumer buys the product and must pay for the repair, they deserve a competitive market to keep prices down and choices abundant.” Ipwich-based economist and frequent New England Automotive Report contributor Frederic B. Jennings Jr., Ph.D. (EconoLogistics) echoes Hickey’s praise. “As an economist, I welcome this news. Large corporations squelch competition by making it difficult or impossible for independent repairers to work on their products. Such restrictions are not economically justifiable on other than anticompetitive grounds. The Biden Administration is also reconsidering antitrust laws in other regards, which is long overdue. I will look forward to learning more about the results of these efforts.” Additionally, AASP/MA Executive Director Evangelos “Lucky” Papageorg suggests that the Executive Order could have broader implications for the automotive industry beyond Right to Repair. “Although the collision repair industry was not mentioned directly, the parallels described when referencing the medical industry and insurance were clear. Our industry has experienced a dramatic reduction in collision repair facilities. There are many factors; however, the key factor is the artificially suppressed rate of
reimbursement paid by insurers, which have led to a reduction in both competition and the workforce. They have led to an inability and reluctance on the part of the majority of collision repairers to keep pace with the ever-changing technology and training needed to work on today’s complex vehicles and many of the safety systems these automobiles include – all at the expense of the vehicle owner while insurers are recording their most profitable years ever as small businesses and their employees suffer. “It is indeed time for equal pay for equal work,” he continues. “It is time for competitive success to be based upon one’s work ethics and expertise – not based on what an insurer is willing to reimburse or pay for. It is time to investigate the core of the issue: The antitrust actions of an industry that has been allowed to run amuck because of its influence-peddling abilities and complete disregard for the laws and regulations in place to protect consumers’ interests and allow small businesses the ability to compete freely. AASP/MA fully supports the actions set forth in this Executive Order put forth by President Biden and will monitor its progress.” The complete text of the Executive Order is available at bit.ly/EO7921. The White House Fact Sheet can be found online at bit.ly/EO7921FactSheet.
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52 November 2021
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