What Does It Mean to Be Elite?

Is it volume? Is it numbers? Is it a completely landscaped building in a frontline location? Some of the finest restaurants I’ve ever been to in this state – or in Italy – have been places you’d call a dive. Some of the best meals I’ve had have been in taverns with people’s names scratched into the wooden bar. Everybody has had a different start in this industry. I admire every single one of them. Some have locations that have been there since the ’40s. Some have had different opportunities based on inheriting family wealth. Some scratched it out from zero. We have shops that have no room to expand, and we have shops that have had chances to buy better locations. They had the chance to move forward. Does it mean we are certified? Not certified? It’s very hard to define. Elite, to me, is someone who stays abreast of recent technology, goes for training and works hard to put out a quality product every day. There’s a restoration shop in Connecticut that’s no larger than seven cars. But if you go to the yearly Concours d’Elegance car show, he’s got a car there every year. There’s a restoration shop in Stillwater with a small office that’s nothing to write home about based on location and exterior aesthetics. His work is impeccable, he treats his customers properly and his pricing is a little above average. He gets paid for what he does. I consider these two shops elite. Do your reviews hold up? Make sure they do. They’re important. Do you follow up with your customer after a mistake? Do you take ownership of that mistake? I have found I sometimes make more customers by correcting small mistakes and going over and above the call of duty instead of patting my customer on the ass and saying, “We’re really sorry.” When it happens, do you have a local group of restaurants you work with? Maybe give a gift card to a local spot to your customer – or a bottle of wine on their front seat with an apology note. How about flatbedding that car and delivering it to the customer, making sure it’s washed and clean? Those things make you elite.

I was never raised with jealousy. I’m more curious how the more successful shop got to where it is. I like listening to more successful people than myself; that’s how we learn. But I’ll say it again: Success isn’t judged by volume – it’s judged by integrity. It’s judged by fairness. Your ability to bend and compromise when needed. I don’t pass judgment on anybody’s work style. I don’t pass judgment on their location. I need to know that the people around me are decent human beings who would help each other at the drop of a hat. That’s the industry I grew up in. Those are the people I consider elite.

In loving memory of my friend, Lee Vetland.

AASP/NJ Hall of Famer Edward Day is the owner of Collision Restoration in Fairfield and a former president of AASP/NJ.

NJA

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The Old Ways Are Gone:

EVs, AI and How the Industry Changed Overnight

As the New Jersey collision repair industry understandably focused most of its attention on COVID-19 over the past year-plus, major shifts in automotive technology occurred during the same period of time that have already drastically impacted how vehicles are produced and the methods employed in the estimating and repair processes. It is not an exaggeration to suggest that more has happened behind the scenes in the automotive world in the past 13 months than in the past 13 years. This month, New Jersey Automotive explores some trends that are quickly leading the auto body industry in new – and at times overwhelming – directions.

The Failure of Photo Estimating

Obviously, the biggest issue presented by the pandemic has been the ongoing need to avoid close contact with others. This continues to present considerable heartburn for those who work in collision repair – a trade based on people’s ability to actually see a vehicle to determine what needs to be done to it. Already long-time proponents of photo estimating, many insurers have either drastically reduced or outright eradicated the number of appraisers they send out to shops in recent months, taking full advantage of the photo-based options they have been developing and promoting for years. But are these methods providing the level of precision needed in real-world auto repair? Some AASP/NJ members aren’t convinced. In an April 13 feature by Wired (wired.com/story/ai-carrepair-shop-owners-not-happy) AASP/NJ Immediate Past President Jeff McDowell (Leslie’s Auto Body; Fords) made it known that he is not a fan of the current virtual estimating model.

“I’d say 99.9 percent of the estimates are incorrect […] You can’t diagnose suspension damage or a bent wheel or frame misalignment from a photograph.

“People say that this is the way of the future,” he added. “I don’t agree with that.”

In the same article, AASP/NJ President Jerry McNee (Ultimate Collision Repair; Edison) noted that virtual estimating has had a negative impact on his ability to effectively negotiate with insurers on a one-on-one basis.

“When the appraisers were here, face to face, you had a better relationship with them […] The appraiser knew you; he trusted you.”

Will the move toward virtual estimating slow down as a result of these and other complaints? Not likely. Bill Brower, head of auto claims at LexisNexis Risk Solutions, told Wired that photo-generated US auto claims rose 45 percent during the pandemic and that he expects it to rise an additional 35 percent within the next four years. That’s 80 percent of all clams by 2025. Mark Friedlander of the Insurance Information Institute, meanwhile, used the Wired article to tout the effectiveness of virtual options, boasting that “insurers have really seen improvements in efficiency, consistency and timeliness.”

Not surprisingly, New Jersey’s auto body industry isn’t the only one struggling with the decline of in-person appraisals. Over in Massachusetts, the state’s Auto Damage Appraiser Licensing Board (ADALB) – an entity housed in the Division of Insurance and comprised of both collision repair and insurance industry representatives – has wrestled with the COVID-19-generated photo estimating controversy for nearly a year. In May 2020, the Board voted 3-2 to create a special Advisory Ruling that temporarily waives the requirement of personal inspection of motor vehicle damage in cases where the amount of loss, less any applicable deductible, is under $3,000. This amount represented an increase from the $1,500 threshold established in current state regulations. The months following the Advisory Ruling saw an ongoing campaign by Revere, MA-based ADALB collision repair representative Rick Starbard (former president of both AASP National and AASP’s Massachusetts affiliate) to immediately rescind the $3,000 in-person inspection threshold out of respect for consumer protection. “I think the time has come that we can get back to inperson appraisals [by] changing our dollar amount and going back to the $1,500,” Starbard said during the ADALB’s most recent meeting on March 23, adding that original estimates written off photos have led to “numerous vehicles” coming to his shop with “less than 10 percent of the actual damage” noted.

After considerable debate and input from the insurance side of the fence, the Board voted to set a compromise date of May 15 to return to the state’s original $1,500 threshold, finally setting the stage to reduce the number of original photo estimates dramatically missing the mark. With Starbard’s comments against original photo estimating now a matter of public record – and a state entity officially voting to only allow remote estimates for up to $1,500 in damage – it is perhaps only a matter of time before Massachusetts’ documented debate over photos sets the stage for similar discussions in other states.

The battle between the insurance industry’s insistence on photo estimating and the auto repair industry’s clear concerns over such practices has only just begun.

AI Is Alive

Basing estimates off a person’s review of photographs is far from the full story. Insurers are also heavily pushing for the widespread implementation of so-called “Artificial Intelligence (AI)”/“deep learning” technologies, which basically represent photo estimating on steroids. To get a glimpse into where things have already been and where they are rapidly going, one simply needs to take a look at CCC Information Services. In December 2018, the company announced the launch of Smart Estimate, billed as “the world’s first Artificial Intelligence estimating tool.” According to a press announcement at the time, Smart Estimate “applies CCC’s estimating logic and AI to vehicle collision photos to predict repair requirements and

suggest estimate lines, including parts likely required to complete the repair. Smart Estimate can be implemented easily by insurance customers of CCC ONE Platform services, and the guided nature of the solution enables new estimators to be trained and productive easily and quickly.” (More information on Smart Estimate and other CCC AI offerings is available at bit.ly/CCC_AI.)

AI’s effect on collision repair claims has already been massive. In March of this year, CCC reported “a more than 50 percent year-over-year increase in claims processed using deep learning.” The company also stated that more than five million unique claims had already been processed “using a CCC deep learning AI solution, and the number of claims using two or more of its AI applications has more than doubled year over year.” Additionally, CCC shared that more than 75 auto insurers were already “actively applying CCC’s advanced AI to power claims decisions and improve policyholder experiences.”

And some people still view the unibody as a revolutionary idea!

The EV Surge

Amidst the media frenzy of last year’s Presidential election, thenSenate Minority Leader Chuck Schumer dropped a not-so-subtle hint in regard to how a Democratic federal government would impact the US auto market. In an opinion piece published in the New York Times last October, Schumer announced a 10-year/$454 billion proposal to “rapidly phase out gaspowered vehicles and replace them with zero-emission, or ‘clean,’ vehicles like electric cars” by 2040. He also expressed optimism that the number of gas-powered vehicles on American roadways could be reduced by 63 million by 2030. Less than a week after being sworn in, President Biden said in a statement that he planned to eventually switch the roughly 650,000 vehicles in the US Government’s fleet to “clean electric vehicles made right here in America, by American workers.” Naturally, automakers are working to embrace this cultural change and join the American public in jumping on the electric vehicle (EV) train. As one example, General Motors has driven home its commitment to EVs in an announcement posted on its consumerfacing website (gm.com/electric-vehicles.html) stating that it “is on its way to an all-electric future, with a commitment to 30 new global electric vehicles by 2025.”

While it is clear that electric vehicles will soon have a substantial presence in repair bays across America, the collision repair field’s current ability to catch up to reach escalating training and procedural demands is a growing concern. As of this writing, I-CAR is attempting to address this need by offering seven EV-related courses: Hybrid Vehicle Identification & Damage Analysis; Hybrid, Electric & Alternative Fuel Vehicle Service; Introduction to Electric Vehicles; Understanding High Voltage Safety; Electric Vehicle (EV) Initial Inspection & Handling, Electric Vehicle (EV) Damage Analysis; and Electric Vehicle (EV) Service Considerations. Course descriptions and additional information are available at rts.i-car.com. In this blink-and-you’ll-miss-it world, the topics covered in this feature are just a few that are worth taking the time to learn more about. Welcome to the new world of collision repair – ready or not.

NJA

Co-celebrating decades of creating chemistry between two industry leaders

Here’s to 235 years of combined service excellence

This year, as Albert Kemperle Inc. celebrates its 80th anniversary, BASF also celebrates its 155th anniversary. We are proud of our decades of partnership with BASF and years of serving the auto paint and body industry together. Kemperle’s founders would be proud of this relationship and the growth their company has experienced because of it.

Today, as we look forward to many more decades of service to our customers, we find ourselves filled with gratitude. The creativity, hard work, and sense of responsibility of the people working for our two companies have made us what we are today.

Thank you for your many years of loyalty.

626 E. Elizabeth Ave., Linden, NJ 07036 Phone: (908) 925-6133 Fax: (908) 925-4344 414-416 Madison Ave., Paterson, NJ 07524 Phone: (973) 279-8300 Fax: (973) 279-9030 631 Clifton Ave., Toms River, NJ 08753 Phone: (732) 797-3942 Fax: (732) 797-0774 100 Melrich Road, Cranbury, NJ 08512 Phone: (609) 860-2800 Fax: (609) 860-2801

4 Emery Ave., Randolph NJ 07869 Phone: (862) 244-4818 Fax: (862) 244-4822 www.kemperle.com

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Are You Being Offered the Actual Cash Value of Your “Total Loss” Vehicle?

If you or one of your customers are facing the unfortunate circumstance of a vehicle (owned or leased) possibly being considered “totaled,” then you can expect a call from the insurer in due time possibly offering you a cash settlement. The insurer will do so if the cost of repairing the vehicle is either greater than the actual cash value (ACV) of the vehicle or if the cost of repair makes up a significant enough percentage of the ACV as to not warrant repair. New Jersey law does not dictate this decision; it is left solely to the discretion of the insurer. That being the case, every auto insurance customer should be diligent in making sure that once an offer is made, it is done in accord with New Jersey law so that you receive an accurate ACV of your vehicle. This adjustment process is found specifically at N.J.A.C. 11:3-10.4 and requires the insurer to try to select one of three prescribed methods for use in the settlement of this type of claim:

• Taking the average of the retail values of substantially similar vehicles as listed in the current editions of The Automobile Red Book (or “older car red book”) published by Penton Media and the NADA Official Used Car Guide (or NADA Official Older Car Guide) published by the National Automobile Dealers Used Car Company. • Using a quote obtained by the insurer for a substantially similar vehicle available for you to purchase from a dealership within 25 miles of where your car is normally garaged. • Utilizing the services of an approved source, including computerized databases that produce fair market values of substantially similar vehicles. Audatex, Mitchell International, CCC, Vehicle Valuation Services Inc. and CARFAX are approved at this time for use in determining fair market values.

What constitutes the actual ACV of your vehicle can be a negotiable matter between you and the insurer. It should not come as a surprise that while one of these methods may result in the maximum return to the customer, another method might result in a savings to the insurer. Upon being presented with such an offer, take the time to review the offer and the documents supporting it. We recommend doing so because we have seen, for example, offers made using unauthorized book values, such as using the “black book” to justify an ACV under the first option above. This would not result in an accurate ACV.

This can be a frustrating process, especially in light of the underlying circumstances that have led up to a vehicle possibly being totaled. If you have questions or concerns about your rights in a situation like this, please see our ad and contact information on the facing page, and reach out to us for a free consultation.

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