New England Automotive Report December 2022

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A typical Friday night as a kid looked something like this for my siblings and me: Pizza and a trip to Blockbuster to pick out a movie or two. Nowadays, most kids have no idea how to work a DVD player, let alone a VCR, and the name “Blockbuster” – once a well-known video rental store – has become a prime example of how a thriving business can quickly become obsolete because it failed to keep up with the times!

At its height in 2004, Blockbuster boasted over 9,000 stores; now, there’s ONE left, a single-standing operation in Bend, Oregon. So, what happened?

Essentially, Blockbuster always struggled to turn a profit, but the beginning of the end came with the introduction of Netflix, not surprisingly, which created a paradigm shift in the market. A paradigm shift is essentially “a fundamental change in approach or underlying assumptions.”

To begin with, Netflix offered rentals by mail, allowing customers to avoid leaving their homes for a rental video. Simply request the videos, and wait for them to arrive in the mail. Moreover, they offered a single monthly subscription rate, rather than a per-video fee…and they eliminated late fees. Blockbuster resisted the changes in the market (even declining an offer to purchase Netflix in 2000!), and that denial of the paradigm shift that was occurring around them led to their demise. By the time Blockbuster tried to catch up, they were too far in debt to survive, so when streaming became the new norm, it was too little, too late. Blockbuster Video filed for bankruptcy in 2010 because they insisted on clinging to a business model that no longer worked.

The collision repair industry is currently undergoing a paradigm shift. The old ways do not work. Vehicles are more complex than ever, and our industry changes constantly, often in negative ways. Do you want to struggle to survive, or are you ready to thrive? If you want to be one of the shops that thrives, it’s time to embrace the need for that paradigm shift; it’s time to change how you think about and operate your business.

Massachusetts collision repairers need to stop assuming that the old way can still work. In fact, we already know it doesn’t! Not if you want to be profitable, at least. It’s time to change our approach and try something new. As we discussed at our last meeting, we need to create a huge change in our market…and we

AASP/MA EXECUTIVE COMMITTEE

AASP MA P.O. BOX 850210 Braintree, MA 02185

Phone: 617 574 0741 Fax: 973 235 1963 Email: admin@aaspma.org

Breaking Free in '23!

What was barely a trickle seeping out from a crack behind a dam is quickly becoming a steady flow. As the flow through the crack increases, the dam becomes weaker every day. The day that the dam is completely compromised and fails altogether is fast approaching. Unfortunately for many, it will be too late; they will have missed their opportunity to get out in front and be in a position to ride the wave to safety and security in the collision repair industry.

Will you be one of the shops that not only survives, but also thrives? AASP/MA is focused on making sure that you are one of those businesses that will be servicing the motoring public for years to come. Servicing the motoring public – while being fairly and properly compensated for the essential work you perform and for the liability you take on – is the goal. Ensuring that you can continue to provide well-paying jobs for the highly skilled technicians in our industry, so they, in turn, can provide for themselves and their families.To do so, more and more shop owners must come to the realization that they must “Break free in 2023.”

That “breaking free” will have to come in many forms. There are some basic changes that can be made here and now to continue the weakening of the dam that contains us. The fact that insurers continue to artificially suppress the labor reimbursement rate means that more shops have had to face the reality that if they are going to stay in business, remain a valued part of their community and provide the essential services motorists require, someone must pay. The realization that, as an industry, we can no longer afford to subsidize the insurance industry as they continue to report record breaking profits is hitting home. That is why a shift to “CO-PAY” in the payment for collision repairs is taking place.

“CO-PAY” is here to stay for the foreseeable future! It is here until insurers realize their business model is no longer sustainable. Insurers must work with collision repairers to find a fair and reasonable rate of labor reimbursement to ensure that insured’s vehicles can be repaired by shops that can afford the proper equipment and train technicians to work on today’s technologically advanced vehicles. Failure to provide a reasonable labor reimbursement rate to this point has led shops across the state to implement “CO-PAY” policies. In many cases, and often to the business owner’s surprise, shops have found the vehicle owner understands the issue and is willing to pay for proper repairs and then pursue the insurer for reimbursement. Contrary to what most shops fear (and what insurers want you to believe), the repairers who have implemented “CO-PAY” policies are booked solid with work multiple weeks out. In some instances, even up to a month or two! They are booked with customers who understand that they will have a “CO-PAY” at the time of completion. The amount of that “CO-PAY” is solely dependent on

how much their insurance company is willing to negotiate with the shop in paying for required procedures along with the posted labor rate of the shop.

The “ALLIANCE” has been working diligently to address the labor reimbursement rate legislatively and has gained great support in both the Senate and the House. As with any legislation, there is a great deal of effort and time that needs to be exerted to move towards passage, with no guarantee. There is a guarantee, however, that in every instance where a shop charges accordingly for the procedures they have performed at their fair and reasonable posted labor rate, they will be one step closer to breaking free. They will be one step closer to taking back control of their business while providing top quality repairs performed by top quality and welltrained technicians.

As was explained during our general membership meeting last month, BREAKING FREE does not have to take place overnight; however, as with any journey, it does have to start by taking the first step. Our goal as the “ALLIANCE” is to be sure you have the tools needed to guarantee that the first step is planted on firm ground, giving you the confidence to take the next step. You will experience some degree of push back and resistance, but that is what the “ALLIANCE” is here for: to support you on your journey. The “ALLIANCE” is here to help you create a network of support which is not founded in being competitors but colleagues. We are colleagues who realize that “NO ONE OF US IS AS STRONG AS ALL OF US.” We are colleagues who share our methods of success in a selfless manner. This camaraderie was evident at our general membership meeting when discussing ways to take back control of your business. We shared the methods that led to success and the stumbles that took place along the way, so that others could learn without making the same errors.

It has been a long time coming, but we ARE turning the corner. We have the ear and support of many in our legislature, at

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What’s the ADALB’s Job, and Is It Being Performed?

A Q&A with Rick Starbard

According to Massachusetts General Laws Chapter 26 Section 8G (MGL c. 26 § 8G), the Auto Damage Appraiser Licensing Board (ADALB) was created with the “authority to license individuals to appraise damage to all motor vehicles arising out of motor vehicle damage claims” and to “adopt rules and regulations governing licenses under this section in order to promote the public welfare and safety” in accordance with the parameters set forth in MGL c. 30A.

But given recent votes by the insurance representatives on the Board that tend to disregard OEM required repair procedures related to safe and proper repairs, we at New England Automotive Report began to wonder if members of the ADALB are actually aware of those duties…and if they believe they’re doing what’s right to protect Massachusetts drivers.

Although requests to interview Board members Peter Smith (MAPFRE), Samantha Tracy (Arbella Insurance) and Chairman Michael Donovan went unanswered, Board member Rick Starbard (Rick’s Auto Collision; Revere) graciously responded to our query on behalf of himself and Board member Bill Johnson (Pleasant Street Auto; South Hadley/Belchertown) whose political aspirations currently leave him with limited time.

New England Automotive Report: What is the ADALB’s job?

Rick Starbard: The job of the ADALB is to license appraisers in the Commonwealth under the directive set forth in MGL Chapter 26 Section 8G and to promulgate regulations which will govern those licensees. The Board should meet regularly to discuss issues that arise which may require changes to the regulation or to issue advisory rulings. It is also the Board's job to investigate complaints of possible violations of the regulations and to take action when deemed appropriate.

NEAR: Do you believe that job is being done? Why or why not?

RS: We license appraisers through regular testing, albeit a very simple testing procedure that could use some modernizing. While we do meet and review complaints, I don't feel that the scales of justice when reviewing violations of the appraisal regulations are fair and equitable, particularly when reviewing complaints against licensed appraisers representing the insurance industry. I am also disappointed that after spending years building consensus in an attempt to modernize 212CMR, anything that didn’t benefit the

insurance industry was wiped out and absent from the version that moved forward, rescinding the hard work and votes taken by former Board members who carried the load.

I think that the reasons that we see such flagrant favoritism to the insurance industry is simply because the ADALB resides in the Division of Insurance (DOI) versus the Division of Occupational Licensure (DOL) like most other state licensed professionals. I have previously stated that I believe that the DOI is a taxpayer-funded clubhouse for insurance companies which makes it highly unlikely that consumers and repair professionals can get a fair shake in the current environment. It has become clearly evident after reviewing over 100 recently filed complaints – many of which involved OEM mandated safety repair procedures – that consumer safety means nothing. As vehicles become more and more complex, the number of consumers put in harm’s way because of insurer ignorance and unwillingness to pay for safe repairs will only worsen.

NEAR: Do you feel that the ADALB is fairly reviewing the complaints filed against appraisers?

RS: Absolutely not!! While I respect and personally like my insurance colleagues on the Board, I know that they have bosses to answer to as has been the case with most former Board members. As long as the ADALB resides under the DOI, this will always be the case, unfortunately. Under the Division of Professional Licensure (or DPL, currently known as the Division of Occupational Licensure or DOL), Board members do not serve as the investigators like we do; instead, complaints are investigated by DPL investigators who bring their findings to the various Boards.

NEAR: Should there be certain complaint items that automatically progress to the next step of the process (ie. OEM required procedures)?

RS: That is tough to say as I do not believe that there is consensus that "OEM required procedures" are actually required. You would

Make Your

Heard: Take the New England Automotive Report Industry Survey!

Nobody knows your auto body shop’s wins and losses like you do. Nobody knows your technicians and crew better than you do. Nobody knows your day to day struggles like you do. The same goes for the shop down the street; only he knows what he goes through every day.

But have you ever stopped to wonder how your situation compares to other shops from all over the state?

Well, there’s a very easy way to find out! The 2022 New England Automotive Report industry survey is here to provide collision repairers all across the Commonwealth with an opportunity to share their voices with their peers!

The survey made its debut in 2021, delivering results from Massachusetts shops who took just a few minutes out of their day to share their views on various industry components. Their input was featured in a two-part New England Automotive Report series that outlined where Massachusetts repairers stand on the labor rate, the tech shortage, technical challenges, insurer conduct and so much more!

Many interesting facts were uncovered.

Now, it is surely no secret that collision repair professionals feel that $40 is an inadequate labor reimbursement rate and have been fighting all year for change; however, the survey honed in on the fact that 77 percent of repairers believe they should get no less than $60 per hour, and 100 percent believe they shouldn’t get any less than $50. This serves as ammunition in the fight for a long overdue raise.

Last year’s results also brought to light that while the majority of shops struggle to find good technicians, 82 percent of respondents hired at least one person in the past year, and 39 percent hired at least two employees with 62 percent of those indicating they had to look multiple places – therefore showing other repairers that perseverance can pay off.

Want to know what the shop down the street does to promote his business? According to those surveyed, 64 percent are using word-ofmouth referral to generate business, and only 18 percent rely on social media, Google and Yelp.

Curious about what other shops value as most important when it comes to determining who to purchase parts from? Based on last year’s results, 92 percent rely on the relationship they have with their vendors.

But how has 2022 compared to last year? The automotive service industry faces new challenges each year, and this annual survey provides an opportunity for shops to share their own thoughts and learn about what others are dealing with when we publish the results in a subsequent issue of New England Automotive Report

It only takes a few minutes to share your thoughts, and answers will remain anonymous. Take the opportunity now to complete the 2022 industry survey at https://bit.ly/NEAR2022industrysurvey Your input matters!

MASSACHUSETTS

by Alana Quartuccio Bonillo

Nominate an Influential Woman for the Women’s Industry Network’s 2023 Awards

Who is the most influential woman you know in the collision repair industry? Maybe you know several…and now’s the time to sing their praises by nominating them for the Women’s Industry Network’s (WIN) 2023 Most Influential Women (MIW) awards. Nominations will be open through Friday, January 6, 2023, and winners will be celebrated during WIN’s 2023 Annual Conference, scheduled for May 1-3 in San Antonio, TX.

Women working in any segment of the collision repair industry across the US and Canada can be nominated for the MIW award; neither nominators nor nominees are required to be WIN members to be eligible. Nominees will be reviewed and interviewed by an independent selection committee which is comprised of past WIN members and MIW who are currently uninvolved with WIN leadership, and selection decisions are based on established criteria, including industry influence, professional accomplishments, mentorship and community service.

Established in 1999, the MIW award recognizes women whose leadership, vision and commitment to excellence have enriched the collision repair industry. Over 100 impressive women have been recognized to-date for their contributions.

Celebrate a strong woman in your organization (or within your network) by nominating her today at bit.ly/MIWnominees.

think that in a state that prides itself on education, a simple word like "required" would actually mean "required." For over 40 years, the regulation has stated: "Manufacturer warranty repair procedures, I-CAR, Tec Cor and paint manufacturer procedures may also apply." In an attempt to modernize that language, it was suggested that we change the language to read "SHALL" apply, but it was changed back to "MAY,” which sends the message loud and clear that OEM-required procedures are not necessarily required, in Massachusetts at least.

Even having the Tec Cor language in there is a joke. They are owned by Allstate, and I am not sure that they even function any longer. The vast majority of the complaints that we have seen lately are very well written and clearly describe potential violations as they relate to the appraisal regulations. All it takes is the ability to read them with an unencumbered, open mind which should send a lot more of the complaints to the next step than we have been seeing.

NEAR: Any additional thoughts you’d like to share with our readers?

RS: I believe that licensing requirements have not kept up with the ever-changing automotive industry. We continue to train and license auto damage appraisers as if it were the 1980s. As long as insurers want to have appraisers view vehicles, which I am not opposed to, they should at least have proper training so that they

know what is involved in repairing today's high-tech vehicles. We should also incorporate annual professional development requirements in order to maintain licenses such as I-CAR and knowledge in researching OE repair procedures.

While the current situation is not ideal, I would encourage everyone to continue learning, doing your homework and filing complaints when you feel that you have been wronged through the abuse of the current regulations and an unwillingness to pay for safe, proper repairs and to encourage your customers to become part of the process. Insurers know that repairers are ultimately responsible for the repairs that they perform, regardless of an insurer's willingness to pay for what is required to perform safe repairs. This is not something that repairers can afford to shield their customers from.

AASP/MA members are strongly encouraged to listen to the recordings of past meetings in the Members Only section of aaspma. org for a glimpse into the inner workings of the ADALB. Peruse the requirements set forth for the ADALB at bit.ly/MGL26-8G.

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AASP/MA Representatives Attend First In-Person AASP National Board Meeting Since 2019

For the past three years, the AASP National Board has met virtually every six months, so when they gathered in person on November 2 for the first time since the pandemic began, they had plenty to discuss. Representatives from affiliates around the country, including AASP/MA Executive Director Lucky Papageorg and Molly Brodeur (Al Brodeur’s Auto Body; Marlborough) participated in conversations related to the Database Enhancement Gateway (DEG), updates from the United Fire Group (UFG) and legislation on Right to Repair.

After Outgoing President Tom Elder (Compact Kars; Clarksburg, NJ) welcomed attendees, Danny Gredinberg, administrator for the DEG, announced that the DEG is nearing 20,000 inquiries with a 50-55 percent change rate. “The industry is hungry for education,” he claimed, stressing the need for shops to continue “challenging times by submitting inquiries to see change. This is how we get accuracy.”

Next, Leah Olson and Lorna Morgan from the UFG shared updates on current insurance industry trends, as well as performance of the AASP program. Although they acknowledged that the program has not paid dividends for the past two years, Morgan expressed optimism that UFG will be able to offer payouts to members again in the near future, and Olson reminded AASP members that other advantages and benefits are available to members as well.

“UFG is dedicated to the AASP program,” she emphasized, listing benefits such as the targeted class of business, risk control resources, safety training and over $35 million paid out in claims since 2014 as the advantages that members have received through the program. “We feel very good that we’ve got the right tools to monitor this situation and adequately support AASP shops.”

The final guest speaker during the meeting was Tom Tucker, Government Affairs/Public Policy for the Auto Care Association, who dove into the controversial topic of Right to Repair, saying, "We need to keep the dialogue going, particularly when it comes

to discussion on the use of aftermarket parts.”

Referencing Massachusetts legislation from a decade ago, Tucker noted that wireless telematics were left out with the agreement to address the issue later. “Later is now,” he claimed, explaining that Auto Care’s 2019 ballot initiative passed with 75 percent of the vote, leading automakers to sue in federal court based on two issues: federal preemption and cybersecurity. “I think the judge is trying to be deliberate. These are not necessarily easy issues to understand, and he’s trying to be deliberate with cybersecurity concerns and the changing nature of the industry introducing electric vehicles. ‘Deliberate’ doesn’t make us happy because we feel we have a very strong case […], but we expect the issue of federal preemption to be off the table, and if the only remaining issue is cybersecurity, we have a solution based on internationally recognized standards that the automakers are already implementing in similar applications.”

Although Tucker feels “very comfortable [the judge] is going to rule in our favor,” he also admitted that the losing side is likely to appeal the decision, so the issue will not be resolved anytime soon. He referenced a similar Right to Repair initiative in Maine, stating that if the legislature declines to take action, it will go to the voters in 2023. “Separately, we also have a federal bill pending in Congress, House Resolution 6570, which introduced the REPAIR Act in Congress.”

That bill now has 18 co-sponsors and has been "generating momentum in Congress," according to Tucker. "It would give consumers control of their diagnostic vehicle data, it would provide consumers with the authority to direct who can receive that diagnostic repair information, it would direct NHTSA (National Highway Traffic Safety Administration) to develop cybersecurity standards which would be the law of the land, and it would give FTC (Federal Trade Commission) enforcement authority to resolve any disputes as well as develop a committee that would oversee emerging technology issues in the market

Danny Gredinberg (Database Enhancement Gateway) encouraged shops to submit inquiries to help information providers show accurate times on operations.

In the wake of the many technological advances impacting the industry, Tom Tucker (Auto Care Association) encouraged AASP leaders to continue to engage in open discussions to inspire “better understanding” and “craft solutions for tomorrow.”

so that we don’t keep coming back to this battle time and time again.”

Claiming that Right to Repair is a “growing movement with global momentum,” Tucker shared Auto Care Association’s position on OEM repair procedures: “We feel very strongly that, from a safety perspective, you should follow the suggested repair procedure, but we recognize that OEMs can always change their procedures to include parts, and that’s crossing the line for us when they insist on using OEM parts and not providing consumers with the choice to use aftermarket parts. For that reason, we oppose OEM repair procedures. We want customers to have a safe, proper and reliable repair, so we’re not questioning safety; we’re questioning giving the OEMs the authority to change the procedure in a way that would basically create a monopoly on parts.”

AASP affiliates shared thoughts on Tucker’s presentation.

“On the collision side, we feel the OEM parts are absolutely necessary because the aftermarket parts are not properly tested and don't meet the same standard for fit and finish after a collision,” Elder stressed on behalf of auto body shops. “If a quality control test were performed, I’m sure the body industry would have open arms, but [as it stands], we have to do the job twice and it becomes a difficulty for us, especially with cradle to grave responsibility on collision repairs.”

On the auto repair side, arguments were made in favor of aftermarket parts which reduce expenses for customers, as long as the parts are tested and proven to be safe.

“The industry is actually in a civil war right now; the whole industry is in flux,” Tucker noted as his time drew to a close. “We're looking at significant changes in the industry in the whole ecosystem. Do we sit back and ride the wave…or do we put a group together and have some honest conversations? We’re not all going to agree on everything, but if we can start understanding, we can craft those solutions for tomorrow because the status quo where we’re all fighting is just not sustainable.”

The eight affiliate leaders who represent over 4,000 member businesses also tackled association business related to approving the last meeting minutes, reviewing the annual budget and

discussing changes to existing benefits as well as the addition of two new benefits through Condition Now and World Insurance. AASP National Administrator Judell Anderson encouraged affiliates to take advantage of the organization’s education grants to help fund training for their local members, and Elder stressed, “Education is very important here.”

As the semi-annual meeting concluded, the National Board voted in favor of the nominating committee’s suggested Executive Committee for the 2023-2024 term: President Dan Sjolseth (Superior Service Center; Eagan, MN), Vice President Lucas Underwood (L&N Performance Auto Repair; Blowing Rock, NC), Secretary/Treasurer Barry Burkholder (Auto Success Inc.; Ephrata, PA) and Chair of Executive Directors Amanda Henry (AASP-PA) with Elder serving as Immediate Past President.

AASP National also recognized outgoing Executive Committee members Molly Brodeur and Bill Adams (New York State Association of Service Stations and Repair Shops) before voting to hold its next meeting in Chicago, IL in April 2023.

For more information on AASP National, visit autoserviceproviders.com

Tom Elder received his gavel and plaque honoring his services from Incoming President Dan Sjolseth.

Leah Olson and Lorna Morgan from the United Fire Group updated Board members on the performance of the AASP program.

Outgoing President Tom Elder presented outgoing Executive Committee members Molly Brodeur and Bill Adams with plaques thanking them for their service.

MASSACHUSETTS

Surely, 2022 will be a year to remember for the Massachusetts auto body world. A year that set the foundation for positive change for repairers and consumers, as the work of AASP/MA (or the “Alliance,” the association’s fitting moniker, which defines its allied forces) over these past 12 months has prepared collision repairers to “break free in 2023” in the hopes of making the upcoming year one for the history books.

“We made GREAT strides over the last two years regarding the labor rate issue, all thanks to the efforts everyone has put in,” reflects AASP/MA Executive Director Lucky Papageorg. “The labor rate bill went further than any other has ever gone before.”

Unfortunately, the bill didn’t make it to a vote, and an attempt to raise the insurer-controlled/suppressed labor rate reimbursement rate from $40 to $55 through Section 110 of the Governor’s Economic Development Bill failed to move forward.

Mere days before the midterm elections, the legislature elected NOT to pursue any of the “outside sections,” including Section 110, in an effort to get the main body of the Governor’s Economic Development Bill through before the end of the year.

Despite the outcome of the Governor’s Economic Bill, AASP/MA has no intention of sitting still and will continue to push forward.

It’s been a positive year from day one. It started with the “Alliance” generating impressive strides on the legislative front. Over 90 legislators signed on in support of two bills which AASP/MA brought forth – a bill to establish a minimum reimbursement labor rate and a second bill that would move the Auto Damage Appraisal Licensing Board (ADALB) from the Division of Insurance to the Division of Occupational Licensure.

Support for the bills alone was a tremendous accomplishment, but Papageorg points out how that support goes even further.

“We created relationships with key legislators, and we raised their awareness of the issues facing not just the collision repair industry, but also the consumers in our state,” adds Papageorg. “Legislators are now aware of the ramifications of how a suppressed labor reimbursement rate and the poor handling of claims by the ADALB affects consumers.”

The “Alliance” set out to make certain their message was being heard by all. They definitely achieved this goal on May 18, 2022 when over 300 collision repair professionals closed their shops to make the trek over to the Capitol steps on Beacon Hill to create some noise about the labor reimbursement rate bill. It was quite the day to remember as hundreds chanted, “Raise the rate now!” carrying signs that boldly displayed the clear message, “Save lives, save jobs, save an industry!”

“This really was a huge event,” Papageorg says, stressing the amount of attention it raised. “We really hope to continue that awareness. We had media attention locally, such as the Boston Globe, as well as nationally. We hope to continue to get more and more exposure.”

Papageorg points to the successful Labor Rate Study Commision hearings where dozens of members came forward to give testimony.

continued from pg. 25

The association achieved local and national attention, and the bill went as far as it could possibly go with a recommended “ought to pass.”

Although the formal session concluded this summer without further movement of the labor reimbursement bill or the bill to move the ADALB, things did not officially come to a standstill when it comes to the $40 suppressed labor reimbursement rate issue. The Alliance’s hard work brought national attention to the Commonwealth having the lowest rate in the country and local legislators backed the addition of language to the pending Governor’s Economic Bill that would raise the labor reimbursement rate to $55.

“Anything that didn't make it through this year, we will look to promote next year,” confirms Papageorg of the association’s continuous efforts. “We won’t be starting from scratch. We will be that much further ahead. There will be some changes likely in the legislature after the midterm elections, and we plan to educate new legislators who come in, but we will be miles ahead of where we had been before.”

“These achievements are not just due to the association and its Board of Directors,” continued Papageorg. “We’ve accomplished so much through the whole-hearted participation of the membership. They were called upon to make calls and do their outreach, and they really came through.”

While members of the association have been hearing the call of the “Alliance,” consumers are listening as well.

AASP/MA found yet another way to get their message to the motoring public. In the past, they’ve taken to the radio waves with appearances on “Everything Auto with Mike Penacho” on WSAR. The association has launched its very own TV program, Auto Sense, on BCAM. The cable access program sets out to help vehicle owners better understand the claims process, why their vehicle needs to be repaired correctly and returned to pre-accident condition and how insurers are avoiding responsibility.

Many cable stations across the Commonwealth are picking up the program. Episodes are available on YouTube (bit.ly/Auto_ Sense).

“The show is helping to raise awareness of the issues consumers face when they experience an accident and also makes them aware of what they need to know to ensure they are getting a safe and proper repair,” explains Papageorg.

Four episodes have already aired, and two more are ready to roll out. Papageorg says there are more in the works, and it’s exciting to see more stations pick up the program as the new year gets underway. Contact your local station to request they add it to the programming in your area. (Visit bit.ly/ask4AutoSense to find contact info for your local station.)

Papageorg reminds all to send in ideas for topics they can address on the show. Feedback from the audience is key in helping to make the program a success.

The “Alliance” closed out 2022 with a successful general membership meeting that focused on ways repairers can “take back their business” as the association leads them toward “breaking free in 2023.”

“Now that COVID is more or less in our rear-view mirror, the association plans to return to quarterly chapter meetings as we hope to get people back to meeting face-to-face on a regular basis once again. Creating camaraderie and a support network is key to our success.”

High on the list of priorities for AASP/MA is to address “the failure that is the ADALB to function properly and enforce the rules and regulations they are supposed to.” Their efforts to see that the ADALB is moved out from under the clutches of the Division of Insurance will continue into the new year.

Papageorg anticipates 2023 will bring new faces and therefore new ideas to the association as the AASP/MA Board of Directors elections take place this month.

Every initiative AASP/MA pushed for in 2022 was a step in the right direction. Every undertaking has been considered a win. They have proven what strength in numbers can do as an “Alliance.” AASP/MA is in an excellent position to carry that momentum and break free in 2023. Now is not the time to sit back and wait; now is the time to continue to push forward! Stay tuned as so much more is in store and yet to come.

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continued from pg. 8

the Attorney General’s office, the Insurance Fraud Bureau and even our new Governor. We have made this progress particularly in the last two years because of the guidance and efforts of our Board of Directors, our lobbyist, the media and – more importantly – our growing number of members who have answered the call to action. With our confidence levels rising (even in response to the naysayers from the insurance industry), collision repairers across the state have become empowered to take that first step to “BREAKING FREE in ‘23.” We owe a great deal to those who have taken the initiative and not waited for a saving legislative bill to be passed. Those shops have been successfully sending the message that no longer will they work in fear and be satisfied with the scraps tossed to them by the insurance industry while the insurers feast on record-breaking profits, defrauding consumers and stealing from hardworking collision repairers.

Enough is enough! Are you ready to “BREAK FREE IN ‘23?” JOIN the “ALLIANCE” now…Be ready and don’t get washed aside when the dam bursts!!

PRESIDENT'S MESSAGE

continued from pg. 6

want YOU to be part of the revolution.

Stop being a slave to the dictates of the insurers…Stand up and break your chains! The more people on board, the better it’ll be for all of us. We cannot continue accepting the status quo – which includes labor rates so low that we cannot possibly stay relevant; we must end those days by changing the way we think about our customers, our businesses, our industry and ourselves.

If you think collecting $40 an hour is good enough, that’s on you…but if you won’t learn from AASP/MA, maybe you’ll learn from Blockbuster. The times are a’changing, and you’ve got to change with them. The Alliance is here to help teach you how to collect what you’re worth and create a huge change in our market. The days of asking for an increase and accepting the insurer’s refusal to grant it with our mouths shut have to end. It’s time to demand what we’re worth and then educate our customers on how to get reimbursed by their insurer.

Are you ready to rebuild your business from a profitability standpoint…or are you going to become the next Blockbuster?

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Why Join WIN?

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• Local/Regional Networking Events

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• Scholarship Program

• School Outreach Program

• Most Influential Women (MIW) Award

MASSACHUSETTS

AASP/MA PRESIDENT KEVIN GALLERANI is president of Cape Auto Collision Center in Plymouth, MA. He can be reached at (508) 747-0316 or kevin@capeautobody.com.

The Auto Damage Appraiser Licensing

Law – Where Is It after 40 Years?

In late 1981, the Massachusetts legislature enacted Massachusetts General Laws, Chapter 26, Section 8G, to take effect on January 1, 1982. The statute established the Auto Damage Appraiser Licensing Board (ADALB or “the Board”) within the Division of Insurance and authorized the Board “to license individuals to appraise damage to all motor vehicles arising out of motor vehicle damage claims.” These claims are defined by the statute to include, but not be restricted to “any set of circumstances for which claim may be made for damage to a motor vehicle under a motor vehicle policy of liability or physical damage coverage.” If an auto damage claim could be covered by insurance, then the statute applies; if the damage claim cannot be covered by insurance, then the law does not apply.

Prior to enactment of the ADALB statute, there were licensed auto damage appraisers in Massachusetts; however, their licenses were issued directly by the Division of Insurance itself, without testing or educational requirements, without direct input from either the insurance industry or the collision repair industry and without strict standards. The new ADALB statute grandfathered all persons who were licensed under the old law, so that they would not need to be tested or have any specific qualification to be licensed under the new law.

Despite the grandfathering of appraisers licensed by the Division of Insurance, the impetus for passage of the ADALB statute was to improve the quality of motor vehicle appraisals by establishing a separate government board having the function to license auto damage appraisers, establish standards for obtaining a license and establish standards for the conduct of appraisals. Further, the Board was to include two members from the insurance industry and two members from the auto body industry, thereby involving members who were expected to have expertise in being able to analyze motor vehicle damage. It was also to have a chairman appointed by the Commissioner of Insurance who could not be affiliated with either of those industries, thereby injecting a supposedly neutral point of view, as well as hopefully giving the insured Massachusetts consumer a voice. The statute also gave the Board the power to issue rules and regulations “in order to promote the public welfare and safety.”

Did the ADALB statute attain its goals?

In my opinion (and the remainder of this article is all my opinion – both good and bad), the answer to this question is a mixed bag.

In some respects, the statute did help professionalize the appraisal of motor vehicle damage in Massachusetts. The original grandfathered appraisers did not have formal training and did not need to pass a test of their skills, even though many of them

may have developed a significant degree of expertise through years of experience. But there previously had been no formal requirements to obtain a license, and anybody who wanted to file an application and pay the fee could be licensed. The ADALB did establish both formal educational requirements and experience requirements to obtain a license, and the Board also issued regulations that set many clear (and some not-so-clear) standards of how auto damage appraisals should be conducted and what needs to be included in an auto damage appraisal. And, in my opinion, most of the members of the ADALB over the years have tried to act in a professional manner, no matter what their individual biases or points of view may be.

Further, the ADALB has issued regulations (as directed by the statute) and set up procedures that, at least on their face, provide for the consideration of complaints against licensed appraisers and assessment of penalties against appraisers who neglect to do what they are supposed to do. And parts of the ADALB regulations – again, at least on their face –have addressed appraisal issues that previously had been problematic, including, but not limited to: (i) setting time limits for assignment, preparation and delivery of appraisals; (ii) setting requirements for responding to requests for supplements, and then writing and delivering supplemental appraisals; (iii) setting standards for dealing with broken glass; (iv) setting requirements for utilization of proper documentation for writing for paint and materials; (v) and otherwise setting standards of what needs to go into an appraisal.

On the other hand, there are goals set by the statute that were never met, or which were initially met but then changed over the years. Just a few of those goals are:

Insurer referrals of claimants to repair shops. The statute says: “No appraiser or insurer shall request or suggest that repairs be made in a specified repair shop.” This language has never changed.

Initially, the ADALB, in its regulations, made the prohibition against referrals even stronger, saying: “No staff or independent appraiser, insurer, representative of insurer or employer of an independent appraiser shall refer the claimant to or away from any specific repair shop or require that repairs be made by a specific repair shop or individual.” The ADALB interpreted this to mean that no appraiser could request or suggest that repairs be made at any particular shop or list of repair shops. At the time, Massachusetts was the only state in the country that prohibited insurers from referring their claimants to their preferred shops. The idea was to give insured claimants as much choice as possible as to which repair shop they could use to repair their vehicle and also to encourage competition between

[LEGAL] PERSPECTIVE by James A. Castleman, Esq.

individual repair shops.

The prohibition was gradually reduced over the years, however. Initially, Allstate Insurance Company sued the ADALB seeking a declaratory judgment from the courts that, upon request, the insurer could give a claimant a list of at least five shops that it believed did quality work at competitive prices. The courts agreed with Allstate, as long as all of the requirements were met and if the insurer made it clear to the claimant that they would still have the right to have their car repaired at any shop of their choice.

The prohibition was then significantly reduced more, when the Insurance Reform Act of 1988 was passed, and the Division of Insurance refined that statute in subsequent regulations. Now, insurers could file a plan for approval with the Commissioner of Insurance, allowing the insurers to pay claimants directly for their losses and mandating that the insurers give a claimant a list of every registered motor vehicle damage repair shop in their county, while highlighting those shops that had entered a referral agreement with the insurer, agreeing to repair referred cars at the price dictated by the insurer. Yet, it was still required that insurers disclose in writing to the claimant that they had a right to have their car fixed at any registered shop; and the insurer needed to list at least five referral repair shops that were geographically convenient to the insured.

About 10 years ago, things changed even more drastically

when insurers – with the approval of the Commissioner of Insurance – began programs where claimants were directed on initial contact with an insurer to an individual “program” repair shop. And this openly continues unabated to this day. THIS OCCURS DESPITE THE ORIGINAL NON-REFERRAL LANGUAGE REMAINING IN THE ADALB STATUTE, AND DESPITE THERE BEING NO SUBSEQUENT STATUTE ENACTED OR REGULATION ADOPTED THAT ALLOWS THIS CONDUCT BY INSURERS.

Competitive estimates. The ADALB statute prohibits insurers from obtaining competitive repair estimates from other repair shops unless the other shop has inspected the damage: “If the appraiser and the repair shop fail to agree on a price for repairs, the appraiser shall not obtain a competitive estimate from another repair shop unless the owner of such other shop, or his authorized agent, either of which shall be a licensed appraiser, has inspected the vehicle and prepared an itemized estimate of repairs to be performed.” Further: “No such competitive estimates shall be obtained by the use of photographs, telephone calls or in any manner other than a personal inspection.”

This makes sense. After all, how can another repair shop know what it would charge for a repair unless it actually has inspected the damage. Yet, every time an insurer refers a claimant to a particular repair shop, or even a list of referral shops, it is

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[LEGAL] PERSPECTIVE

continued from pg. 37

representing that the referral shop will make repairs to the vehicle at the price that the insurer has written. In effect, the insurer is saying that it knows what the other shop will charge for the repair, even though the shop hasn’t seen the car – essentially saying that the other shop’s competitive estimate will be what the insurer has written. And this happens every day of the week with every claim for which a referral shop or list of referral shops is given to the claimant. And every day, jobs are stolen from honest repair shops that an insurance appraiser disagrees with and sends to another shop which may (and often does) end up getting supplements which wind up greatly exceeding what the original shop wrote.

In my opinion, this is one of the most egregious offenses that an insurer can engage in when settling an auto damage claim. By doing this, the insurer can, through intimidation, force good independent repair shops (and even their own referral shops) to accept whatever ridiculous number the insurer may have written for repairs, thereby artificially depressing the legitimate cost of auto repairs by threatening to take business out of the original shop. Further, claimants are forced to abandon their repair shop of choice…or to take money out of their own pocket that should have been paid by their insurer.

Removing inspection stickers. In 1990, the ADALB statute was amended to mandate that, if an appraiser determines that a damaged vehicle “may” not meet the requirements for the

Massachusetts annual safety and emissions inspection sticker, the appraiser “shall” remove the existing inspection sticker, and a new one cannot be issued until the vehicle is repaired and passes a safety and emissions inspection. There is no wiggle room in the statute; it is mandatory. The statute was enacted to protect the public from potentially being injured by vehicles that are unsafe to drive on Massachusetts roads. The Registrar of Motor Vehicles was directed by the statute to issue regulations for its enforcement, which he did issue. And the ADALB added language to their regulations requiring appraisers – all appraisers – to comply with the statute.

Initially, the statute was complied with, and the ADALB made it clear that all licensed appraisers were required to comply. But then insurance appraisers started to complain, either that they often couldn’t get access to the inside of a vehicle to remove an inspection sticker, or that they felt threatened by car owners when the owners realized that they would be removing the sticker. Perhaps more importantly, insurers realized that they now had to pay to have repaired vehicles go through a safety and emissions inspection, and they did not want to spend the money. Some insurers even tried to prorate what they would pay for the inspection based on the number of months left on the old inspection sticker. As time went on, the removal of inspection stickers became less and less common to the point where, according to my understanding, very few inspection stickers are ever removed.

Please understand that the requirement for removal of inspection stickers is still a statutory mandate, is still subject to the Registrar’s regulations and is still required of all appraisers by the ADLAB regulations. How many unsafe unrepaired vehicles are traveling down Massachusetts streets as a result of this, and how can the Commissioner of Insurance, the Registrar of Motor Vehicles and the ADALB continue to put the public in danger by ignoring and refusing to enforce this mandate? How many people will have to die before someone takes notice? Whatever happened to promoting “the public welfare and safety?”

Conclusion

The Auto Damage Appraiser Licensing Law has been on the books for 40 years now. Some good has come of it, but some of its goals have never been met or are not currently being met, including those listed in this article and others for which there is only so much time and space in this article to address. It certainly would be refreshing to see those government agencies tasked with enforcing the statute actually doing their job as intended.

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

TGP Presents Industry Icon Award to Collision Advice's Mike Anderson at SEMA 2022

Thomas Greco Publishing (TGP) presented its inaugural Industry Icon Award to one of the most recognizable faces in the collision repair industry – Mike Anderson (Collision Advice) –during the Collision Industry Red Carpet Awards Breakfast held during SEMA week in Las Vegas, NV.

“Our inaugural industry icon winner is known locally, regionally, nationally and globally as the go-to in collision repair,” said TGP Senior Vice President Alicia Figurelli about the “incomparable” Mike Anderson during the presentation. “For 33 years, TGP has had the privilege of recognizing the best of the best through our work with some of the most prominent collision and mechanical repair associations throughout the nation. MerriamWebster defines an icon as ‘a person or thing who is widely admired, especially for being a great influence or significance in a particular sphere.’ An industry icon rises above the fold, through not only their extreme knowledge and skill, but also in their consistent service to fellow repair industry professionals. Mike has committed himself to working with repairers, whether one-on-one, 20 at a time or in a packed ballroom with the intent of having them leave the meeting a better professional than when they walked in.”

“I am truly humbled,” Anderson expressed in accepting the award on what also happened to be his birthday. “I turned 60 today, and I am really grateful for the opportunities I’ve had. My dad

passed away in May, and this is in memory of him. He helped me understand how important quality and customer service are.”

“When we came up with the concept of this award, there was no debate, no discussion on who the first recipient would be,” says Thomas Greco, president of TGP. “Everyone just looked around and said: ‘Mike.’

“He is truly an icon and more importantly, a friend to everyone in our industry.”

Thomas Greco Publishing is the publisher of New Jersey Automotive, Hammer & Dolly, New England Automotive Report, AASP-MN News and Texas Automotive and is the event manager of the NORTHEAST® Automotive Services Show.

MASSACHUSETTS

2022 Thomas Greco Publishing (TGP) Industry Icon Award honoree Mike Anderson, pictured with TGP Sr. Vice President Alicia Figurelli