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ABAT STRONG: Sales and Solutions in the Age of Coronavirus

Dissecting the

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The TDI FIGHT Isn’t Over

A LESSON From the LOCKDOWN

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Contents

May 2020

on the

cover

Official publication of the Auto Body Association of Texas

18

ABAT STRONG:

ABAT BOARD OF DIRECTORS Vice President Eric McKenzie

Sales and Solutions in the Age of Coronavirus

President Burl Richards Burl's Collision Center burl@burlscollision.com (903) 657-8082

Chairman of the Board Corey Pigg S&W Expert Collision Repair coreyp@swcollision.com (936) 634-8361

Park Place Dealerships emckenzie@parkplace.com (214) 443-8250

Treasurer David Osburn South West Collision Center dosburn@southwestautogroup.com (855) 395-2720 Executive Director Jill Tuggle jill@abat.us (817) 899-0554

ABAT BOARD MEMBERS

DEPARTMENTS

6 8 8 10 12 14 15 20

PRESIDENT’S MESSAGE By Burl Richards Surviving More Than This EXECUTIVE DIRECTOR’S MESSAGE By Jill Tuggle We Are Here 2020 TEXAS AUTO BODY TRADE SHOW ANNOUNCEMENT

Larry Cernosek Deer Park Paint & Body lcwrecker@comcast.net (281) 930-1539

Chad Neal Innovative Collision Equipment Chadwneal@yahoo.com (817) 527-2143

Chad Kiffe Berli's Body & Fine Finishes chadk@berlisbody.com (512) 251-6136

Manuel Rubio Miracle Body & Paint manuelr@miraclebp.com (210) 843-9564

Kevin Ellison Westway Ford kellison@vtaig.com (972) 584-9033

John Kopriva Kopriva Body Works jtkopriva@gmail.com (713) 923-4412

Greg Luther Helfman Collision gluther@helfman.com (713) 574-5060

Robert McDorman Auto Claim Specialists rmcdorman@autoclaimspecialists.com (817) 756-5482

EDITOR’S MESSAGE By Joel Gausten A Lesson from the Lockdown LOCAL NEWS By Alana Bonillo ABAT Offers Protective Face Masks to Texas Auto Body Community

Logan Payne Payne & Sons Paint & Body logan@payneandsons.net (214) 321-4362

Darrell Smith McDaniel’s Quality Body Works Inc darrell-mcdaniels@sbcglobal.net (903) 753-5391 Mike Williams All Star Collision Center sales@allstarcollision.us (903) 589-3160

PUBLISHER Thomas Greco / thomas@grecopublishing.com SALES DIRECTOR Alicia Figurelli / alicia@grecopublishing.com

LOCAL NEWS By Alana Bonillo ABAT Members Receive Economic Stimulus Bill Guidance from Lobbyist

GRAPHIC DESIGNER Lisa M. Cuthbert / lisa@grecopublishing.com EDITORIAL DIRECTOR Joel Gausten / joel@grecopublishing.com

MEMBERSHIP APPLICATION EDITORIAL/CREATIVE COORDINATOR Alana Bonillo / alana@grecopublishing.com

ASK THE EXPERT By Robert L. McDorman “How Will You Work to Get Your Clients Made Whole?”

OFFICE MANAGER Donna Greco / donna@grecopublishing.com Published by: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963

ADVERTISERS’ INDEX Axalta ......................................................................IFC

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Innovative Collision Equipment........................13

BASF........................................................................11

Park Place Dealerships ......................................9

Beacon Equipment Resources ........................12

Reliable Automotive Equipment ......................4

CAR-O-LINER Southwest ..................................7

Sherwin-Williams/Matrix ....................................17

Dallas Parts Distribution Center ......................OBC

Tasco Auto Color..................................................21

Ecotech ..................................................................IBC

Wheel Technologies............................................6 5 May 2020 Texas Automotive

www.grecopublishing.com TEXAS AUTOMOTIVE is published monthly and is sent to ABAT members free of charge. Subscriptions are $24 per year. TEXAS AUTOMOTIVE is published by Thomas Greco Publishing Inc., 244 Chestnut St., Nutley, NJ 07110. The editorial contents of TEXAS AUTOMOTIVE are copyright © 2020 by Thomas Greco Publishing Inc. and may not be reproduced in any manner, either in whole or in part, without written permission from the publisher and/or editor. Articles in this publication do not necessarily reflect the opinions of Thomas Greco Publishing Inc. Stock Images courtesy of www.istockphoto.com.

President’s Message

Surviving More Than This

T

ings in our industry – and our country – are a lot different now than they were a month ago.

It’s not a stretch to say that current events are reshaping how we do business.

With insurers not sending out appraisers for health and safety reasons, the use of photo estimating is increasing. is means more responsibilities placed on shops to go through the time and effort to get photos and information over to the carriers. We’re also seeing MSOs and other large, DRPdriven facilities not being able to depend on a high volume of work to cover low profits from individual jobs. ese trends could be reduced once our nation is freed from the current lockdown, but none of us should assume that they will just go away overnight – or at all.

ABAT is always working hard to stress the importance of industry education and

knowing your numbers, especially in the era of OEM certification programs and their associated costs. e coronavirus pandemic had made this an even greater necessity.

Could you survive another pandemic – or an unforeseen natural disaster – that takes work away from your shop for months? You need to have the knowledge, documentation and courage necessary to stand up for your business and get what you’re owed for the professionalism you provide. If something like COVID-19 happens down the road, you need to be able to breathe easy knowing that you have enough money in place to survive and take care of your employees. If you rely only on your typical volume and profit margins to stay alive, then your legs could be cut out from under you when you least expect it.

ABAT is here to help you avoid that.

Attend our seminars and presentations –

either through “virtual” means or, when the time comes, in person. Read the information we provide in this magazine.

Check out the programs and Burl Richards services from Mike ABAT President Anderson (Collision Advice) and other Texas Automotive contributors. Call or email us whenever you need assistance in your business, and we will do our best to steer you in the right direction. Together, we will weather this current storm and build a better industry for the future. TXA

burl@burlscollision.com

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7 May 2020 Texas Automotive

Executive Director’s Message

we are here

W

When all of this coronavirus stuff first started happening, I sat and wondered where ABAT would fit into all of it. I wondered if our members would even care about the usual information that we send them, the events we have coming up or paying their dues. I worried that the association they belonged to would be so insignificant in light of what they faced at work or at home that they wouldn’t want to hear from us. e reality was that our shops need us more now than ever before. ese are unusual times, so the usual business must change – not only for shops, but for ABAT as well.

I dug deep and tried to find ways to immediately help. We just started asking what our members needed and acted upon it. Our lobbyist worked tirelessly to analyze

the stimulus package to send out to our members in a readable form. We pumped out any and all information we could find (as limited as it was). Just two days before Dallas announced a mandatory face mask regulation, we closed up a bulk mask order for our members and followers. We placed an order for 660 reusable face masks, and we are keeping our options open for additional PPE and sanitization needs as supply chain issues continue to affect our shops.

I am mourning the fact that as this issue slides into your mailbox, ABAT members from all over the state should have been gathering to honor our late Board member and friend, Dean Griffin, at the newly named “Dean Griffin Memorial Skeet Shoot.” e event has been postponed, and

2020

we hope to host it later this year.

Plans are at a slow grind for the Texas Auto Body Trade Show. It is still on for September 18 and 19, but questions remain Jill Tuggle over what it may ABAT Executive Director look like. ABAT brought you our virtual meetings in February, and we are fully prepared to execute this Trade Show in a similar manner. We are exploring these options now. One thing is for sure; this virus will not stop us.

Continued on page 16

Irving Convention Center at Las Colinas 500 West Las Colinas Blvd., Irving, TX 75039

TEXAS AUTO BODY TRADE SHOW September 18 - 19 For more information, please contact

Host Hotel:

Texican Court 501 West Las Colinas Blvd., Irving, TX 75039

Jill Tuggle (ABAT executive director) at (817) 899-0554 or jill@abat.us 8 May 2020 Texas Automotive

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Editor’s Message

A Lesson from the Lockdown

I

I don’t need to provide an introductory paragraph here explaining what we are all going through right now. What I will add to the obvious is that I hope things are in a better place for our nation – and this industry – by the time this issue of Texas Automotive is in your hands.

Although it’s difficult to find a silver lining in all of this, I believe there is one.

Collision repair is a difficult profession, and shops’ need to deal with – and regularly battle – insurers over what’s proper and reimbursable during the repair process doesn’t make it easier. Meanwhile, insurance appraisers are given their marching orders to write for auto body work in the most costefficient way possible. It doesn’t take a financial analyst to see that this might cause a few arguments between the two parties – and the customer (who just wants their car back) is stuck in the middle. It’s hard for repairers and insurers to see eye to eye on just about

everything, but everyone can agree that these are trying and unsure times. And we’re all in them together.

When something as simple as toilet paper becomes as desirable in the marketplace as Beanie Babies were a few years ago, it makes you realize just how important the basic things in life truly are. ings like common decency. ings like caring for those around you – even strangers. ings like making society as a whole just a little bit better. I’m not a dreamer by any means, but I do try to be optimistic in rough times. (As a parent, I need to be.) If we don’t at least make a stronger commitment to doing more of the right thing in our daily lives, then this uncertain and stressful era in our history has been for nothing. Maybe this will be the turning point; maybe this will be what gets the inter-industry to truly realize that proper procedures matter, professional shops deserve to get paid, insurers are there

10 May 2020 Texas Automotive

Joel Gausten Editor to provide full protection to their customers and vehicle owners should never have to question whether a repair will keep them safe.

Where will we be a month from now?

I have no way of knowing as I type this.

We can keep our hands clean and stay away from group gatherings, but the fact remains that the future of this thing is not in our control. What is in our control is how we live our lives and treat those around us in the meantime. TXA

joel@grecopublishing.com

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Local News

By Alana Bonillo

ABAT Offers Protective Face Masks to Texas Auto Body Community Since the beginning of the coronavirus pandemic, the ABAT team has been pulling together to make sure members have as many resources as possible. Responding to the extreme need for personal protective equipment (PPE), the association saw an opportunity to help the Texas body shops and their customers stay safe.

“As an association, we always want to be there for our members,” shares ABAT Executive Director Jill Tuggle. “Part of the reason we exist is to help shops during hard times. As I was wracking my brain to come up with new ideas to help, I got an email from a promotional supplier we’ve used before and learned we could order reusable face masks.”

Soon after, ABAT sent out a member notice to gauge interest.

Before long, 660 orders were received. ere was no money to be made on the sale of the masks, as ABAT purchased them as a co-op.

Association members were able to purchase these reusable masks (up to 200 washes) quicker than if purchased from other suppliers. ese two-layered masks are infused with one layer of antimicrobial fabric (Milliken silver) and one layer of polyester, which will be customized with the Texas flag or the ABAT logo. Like most reusable masks on the market right now, they are not medical grade

A mockup of the protective masks available through ABAT

but include a pocket to add additional filtering for extra protection.

“We wanted to find something that was in between,” Tuggle says. “ese are better than something being made in someone’s living room.”

As this issue of Texas Automotive went to press, the shipment of masks was to arrive within days. TXA

12 May 2020 Texas Automotive

Local News

By Alana Bonillo

ABAT Members Receive Economic Stimulus Bill Guidance from Lobbyist In these uncertain times, feeling overwhelmed is an clients. I put my bill analysis skills to work, and that is where this understatement. came from.”

For body shops and other essential businesses, it can be difficult e Payroll Protection Program provides cash flow assistance to keep up with the ever-changing information coming out daily through 100 percent federally guaranteed loans to employers who in regard to the economic stimulus plan designed to maintain their payroll during this emergency. e loans help them stay afloat during the COVID-19 will be forgiven provided the employers maintain Smith’s pandemic shutdown. their payroll. document ankfully for the ABAT community, “Payroll is the number one thing for provides a brief guide association lobbyist Jacob Smith has shops. A lot of these people pay their to the details of the simplified things for members. Smith put technicians well; they put in so much time Paycheck Protection together a section-by-section analysis of and education and really care about their Program (PPP) loans and the the COVID-19 stimulus bill, reducing employees. ey want to keep them on Economic Injury Disaster the fine-tooth combing one would need even though things have slowed big time.”

Loans (EIDL) currently to do to find pertinent answers.

Another way to obtain funding to administered by the Small “I put together this information keep employees on the payroll is through Business packet that breaks down the stimulus the EIDL. ese grants provide an measures, and I also did a whole bill analysis emergency advance of up to $10,000 to small Administration so they don’t have to read through the entire businesses and private non-profits harmed by (SBA). thing,” explains Smith. “I think this will be most COVID-19. e advance does not need to be repaid helpful, as we focused on highlighting what would be best and may be used to keep employees on the payroll, provide for our clients to know.” sick leave, meet increased production costs due to supply chain Smith’s document provides a brief guide to the details of the interruptions or pay rent, mortgages, debts and other business Paycheck Protection Program (PPP) loans and the Economic Injury obligations. EIDLs are low interest rate loans of up to $2 million Disaster Loans (EIDL) currently administered by the Small Business (with principal and interest deferment at the administration’s Administration (SBA). It outlines what the loans are intended for discretion) available to cover payroll and other operating expenses. and the types (and sizes) of businesses and entities that are eligible.

At press time, there were reports that funding for the programs “Everyone is hurting right now, so I wanted to try to help my was exhausted. However, Smith believed the government was to contribute additional funding to the loan programs.

Another factor important for businesses to note is that the bill has relaxed affiliation rules, which means businesses controlled by a third party (such as a franchise) can be considered a small business and eligible for loans.

“One of the biggest things to note is that you have to apply through your bank. ey are doing a lot when it comes to determining who gets the loans. So, knowing your banker is important for those things, because you can get put towards the top of the list.”

ABAT President Burl Richards is thankful for Smith’s efforts to bring this vital information to members.

“If there are things in the industry we aren’t sure about, Jacob has great knowledge and a lot of contacts. It has absolutely been a great decision to bring him on.”

To receive a copy of Smith’s report, please contact ABAT Executive Director Jill Tuggle at (817) 899-0554 or jill@abat.us.

TXA 14 May 2020 Texas Automotive

Auto Body Association of Texas Membership Application Company Name:______________________________________________________________________ Primary Contact: _____________________________________________________________________ Position: ____________________________________________________________________________ Phone Number:________________________________ Direct Line/cell: ________________________ Email: _______________________________________________________________________________ Business address: ____________________________________________________________________

Years in Business: _____________ Website: _______________________________________________ Full 2019-2020 Dues $500 ² MSO $250 per additional shop 2019-2020 Affiliate (Vendor) Dues $500 Join online at www.abat.us OR send this form to the address below Credit card number________________________________________________________________ Exp _____________________

By signing below, you agree to pay the above amount and have your credit card put on file for auto renew each year in the amount of $500 to be charged 12 months after joining ABAT. You may cancel this auto renew at any time.

Signature:__________________________________________________________Date: ____________ OR pay online at http://www.abat.us/join-abat/ or make checks payable to ABAT Credit cards are preferred but if you must send a check please submit membership dues to ABAT 1207 N. Frisco St. Henderson, TX 75652

Questions? Please contact Jill Tuggle at 817-899-0554 / jill@abat.us

15 May 2020 Texas Automotive

Executive Director’s Message Continued from page 8

is ordeal is far from over. And while we have postponed events and even our normal day-to-day activities, we are as busy as ever trying to just be there for our members. We added a new member at the beginning of April; as shocked as I was, I

was also humbled to know that we are still very much needed – even to someone new who hasn’t even seen all we have to offer.

We must adapt in this climate, listen to the needs of the market and find opportunities. Abraham Maslow once said, “In any given moment, we have two options: To step forward into growth or to step back into safety.” ABAT will continue

16 May 2020 Texas Automotive

to grow and adapt and be a place shops can turn to in uncertainty.

If you have a need, please reach out to us. We are here, and we are waiting to be of service to our members and the entire collision community. TXA

jill@abat.com

A SYSTEM

R EBO OR N w it h e v er yt hing y ou u a s k ed f or in a r e f inish s y s t em – c olor c onsis t enc y and t ools .

M AV ER IC K AP P R OV ED .

R EQ UE S T A D EMO MO , V ISI T M AT AT R I X S Y S T E M . C O M

COVER STORY

ABAT STRONG:

Sales and Solutions in the Age of Coronavirus

Last month was ABAT Board member Larry Cernosek’s 45th anniversary as a collision repair shop owner. While celebrating such a milestone during a pandemic could have been a depressing experience, he actually saw one of his busiest times in recent memory. For him, staying strong during the current coronavirus shutdown has come as a result of his thriving towing business (Cernosek Wrecker Service; Pasadena), which currently serves over 50 facilities in the area. In fact, he’s giving serious thought to hiring another wrecker driver to keep up with his increasingly demanding schedule. ings are also busy at the auto body side of his operation, Deer Park Paint & Body.

“People who had a wreck but their car was drivable didn’t fix them [before this], but now they are because they have to stay at home and can’t go anywhere. ey’re bringing those cars in; we’re getting minor repairs, which are good [jobs].”

Cernosek’s story is not uncommon in the Lone Star State these days.

As an essential business, the Texas collision repair industry has largely succeeded in capturing work even as other parts of the country face considerable struggles. For ABAT Chairman of the Board Corey Pigg (S&W Expert Collision Repair; Lufkin and Nacogdoches), moving forward has meant stepping up the use of remote estimating and digital repair orders in addition to offering to pick up vehicles for homebound

18 May 2020 Texas Automotive

By Joel Gausten

customers. ankfully, he has been operating at full staff and is seeing plenty of jobs fill his days.

“Oddly enough, we’ve been consistent as far as business is concerned; it hasn’t let up. e foot traffic through the door has [decreased], but accidents are still happening. We’re glad we can still operate in the middle of all this.”

Early in the pandemic, Pigg donated several N95 masks to area law enforcement and healthcare personnel. Each vehicle that arrives at his facilities continues to be thoroughly sanitized to protect technicians and consumers alike.

Over in Henderson, ABAT President Burl Richards is maintaining a steady schedule at Burl’s Collision Center. Like many Texas shop owners, he took immediate action from the start to ensure the continued safety of his employees and customers. In addition to following extra steps to apply disinfectant to vehicles, he implemented a split morning/evening schedule for his staff. is way, if a team member in one shift contracts the virus, the other shift can still work at minimized risk.

“It was interesting doing that,” says Richards of the process.

“One of the biggest obstacles to overcome was the communication between the two shifts. I didn’t want the shifts running into each other. We might have had an estimator on the morning shift, but the technician working on the vehicle might have been working the evening shift. It took a week to really get the communication down well.”

Fortunately, the coronavirus’ presence in Richards’ market was still small as of mid-April.

“We’re in a rural area – 53,000 people in our county. We’ve had fewer than 40 people get it, so we made the decision to keep working while social distancing.”

As these unprecedented times carry on, ABAT has made adjustments to its schedule and operations. Both the Dean Griffin Memorial Skeet Shoot and Houston Member and Sponsor Appreciation Event have been postponed, while the association is investigating the possibility of making its upcoming Texas Auto Body Trade Show a virtual event if necessary. As this issue of Texas Automotive went to press, ABAT was days away from hosting special Zoom seminars – spread over three days and presented by John Niechwiadowicz of QLC, Inc. – on how repair facilities can better adapt to the current COVID-19 environment.

On the national front, I-CAR has made its Reparability Technical Support (RTS) Portal (rts.i-car.com) free to users through May 31. e RTS Portal provides comprehensive collision repair technical resources to technicians, appraisers, shop owners and managers, including reference tools for airbag and partial part replacements, OEM-specific repair information and access to realtime Ask I-CAR technical support. e Society of Collision Repair Specialists (SCRS) is actively providing critical content to the interindustry, including educational videos from the most recent SEMA

Show and other events available on the official SCRS Facebook page (facebook.com/SCRSCollision). SCRS has also created a special online directory of industry-related COVID-19 resources at scrs.com/covid19-resources.

In an effort to help shops feeling an economic sting, the Collision Industry Foundation (CIF) has created a specific fund to assist those industry members whose livelihoods have been greatly affected by recent events.

“Our hearts go out to all those impacted by this worldwide pandemic,” expressed Michael Quinn, CIF board president and senior vice president of business development at AirPro Diagnostics,

As an essential business, the Texas collision repair industry has largely succeeded in capturing work even as other parts of the country face considerable struggles.

in a statement. “e CIF is prepared to step forward with an initial commitment of $100,000 and encourages all stakeholders in the industry to contribute and support collision repair employees, technicians and their families in the face of this crisis.”

CIF had already received over 300 individual applications for assistance at press time. Additionally, the Fund was recently doubled

by CCC Information Services, who contributed an additional $100,000. Other contributors include AirPro Diagnostics and Spanesi Americas. (Tax deductible donations to the fund – or requests for support - can both be made at collisionindustryfoundation.org.)

While some automotive-related businesses will need time to recover from the current lockdown and regain their previous presence in the market, vocational schools may be the ones to face the hardest struggles of all. According to a national survey conducted by the Collision Repair Education Foundation (CREF), 65 percent of collision schools will see reductions in their budgets for the 2020-2021 school year, with 45 percent already seeing serious impacts to their budgets for this year. CREF has established the COVID-19 School Recovery Fund, which will identify schools that have been impacted by the pandemic and bring them to the level needed to produce the best entry-level employees. It will also work to connect students at those schools with industry employment in their areas. More information is available at collisioneducationfoundation.org.

Although the final word on this challenging time in history has yet to be written, the automotive community is working hard to overcome the difficulties ahead. If there’s one profession with the will to keep going while keeping customers safe and secure, it’s this one. TXA

19 May 2020 Texas Automotive

Ask the Expert

“How Will You Work to Get Your Clients Made Whole?”

Dear Mr. McDorman: I hope you and your family are remaining safe and healthy. I know that you and ABAT have been working on addressing issues with the Texas Department of Insurance (TDI) on behalf of consumers. What are you doing to push these things forward in light of the pandemic, and how will you work to get the TDI to act during and after our present lockdown?

Robert is a recognized Public Insurance Adjuster and Certified Vehicle Value Expert specializing in motor vehicle-related insurance claim resolution. As the general manager of Auto Claim Specialists, Robert expertly leads this National Public Insurance Adjuster Agency, which is currently licensed in over 22 different states and specializes in providing automotive-related claim liquidation techniques, strategies and motor vehicle valuation services to all parties, including individual consumers, body shops, auto dealers, repair facilities, towing and storage operations, lenders, finance companies, banks, legal professionals, governmental agencies and others. The firm’s consistent success can be attributed to Robert’s 35-plus years of automotive industry knowledge, practical hands-on experience and multiple certifications, including licensure by the Texas Department of Insurance as a Public Insurance Adjuster. Auto Claim Specialists clients can absolutely trust that they will be provided with analytical, sophisticated, state-of-the-art, comprehensive, accurate, unbiased and up-todate data and information that all parties can rely upon as both factual and objective. Robert can be reached at (800) 736-6816, (817) 756-5482 or AskTheExpert@autoclaimspecialists.com.

We are doing fine; thank you for asking. I hope you and your family are doing well, too. ank you for your question. Our work in this regard has not slowed down during the pandemic. We are proud to say that, if anything, the slowdown in the court system has allowed our clients’ legal teams time to focus on the causes of action and relief of such. I truly believe that justice is in sight!

On March 23, senior management with the Texas Department of Insurance called me seeking clarification on some previous information and further support I provided. I was assured that the unfair settlement practice scheme we have disclosed to the TDI (with supporting documents) was being taken seriously, and that many individuals inside the organization were working toward an action plan.

As a proud Texan and a staunch believer in democracy, I continue to remain optimistic that the TDI will punish these offenders of policyholder rights in due time. e evidence we turned over was so compelling that I see no way the Department cannot take action against these carriers who are boldly and blatantly denying policyholder rights at will. As of this writing, these carriers have not been held accountable for their unlawful actions. We understand and respect that the TDI has a process it must follow, and we have tried to remain patient while the evidence and facts are 20 May 2020 Texas Automotive

being examined. However, some of our clients’ statute of limitations for relief is drawing perilously close.

For our team of adjusters, appraisers and support staff, the interest of our clients and the proper indemnification of their loss are paramount. As a Public Insurance Adjuster and a steward of my clients’ rights, I have a fiduciary responsibility to watch after their interest and advise them of all legal remedies available.

Where necessary in the interest of time and to preserve our clients’ legal rights to relief, we have referred many of our clients to law firms familiar with insurance code violations, such as the ones contained in the unfair settlement practice right of appraisal scheme that we exposed to the TDI. Because of the delay in action by the Department, many of these clients who were wrongfully denied their right of appraisal are now seeking relief for their damages through the judicial process. We are diligently working with our clients’ law firms to educate them on the complex mechanics of the scheme being carried out by certain carriers in Texas and other states. e violations and damages are even bigger than I had first expected or would have known by not being a lawyer.

We have many clients who have invoked their policy right of appraisal, and their carriers have refused to honor this absolute right. On each of these claims where the carrier has underindemnified the insured and refused to honor their contractual right of appraisal, there have been additional finance charges, late fees, collection attempts, delinquent credit reporting and charge-offs as well. It continues to amaze me how these unscrupulous carriers can continue to get away with these blatant contract violations. For the life of me, I cannot figure out how the Superior Court can override the District Court when an appraisal is not granted, yet these unlawful carriers continue to be allowed to not honor the policy right of appraisal when the insured has invoked such

By Robert L. McDorman

right. Even the District Court cannot disallow this contractual right. In fact, a Texas Trial Court’s duty to compel appraisal is so strong that it has no discretion to deny it. Mandamus will be issued where the Trial Court fails to order appraisal. e Purpose of the Appraisal Provision Is to Conclusively Determine the Amount of Loss An Appraisal Clause binds the parties to have the extent or amount of the loss determined in a particular way. Either the insured or the insurer may demand appraisal; once a party has demanded appraisal, the demand is irrevocable and the other party must comply with the demand.

An insured can enforce the appraisal provision against an unwilling insurer, and

the Trial Court has the power to appoint an umpire when the parties’ appointed appraisers fail to do so. I have various legal cases on file that detail these facts; please contact me if you would like to receive them.

Once Invoked, Appraisal Is Mandatory and Must Be Enforced by the Court e Texas Supreme Court has confirmed the mandatory nature and enforceability of Appraisal Clauses, a principle that has been followed for over 100 years, by stating the following: Like any other contractual provision, Appraisal Clauses should be enforced. ere may be a few times when appraisal is so expensive and coverage is so unlikely that it is worth considering beforehand whether an

21 May 2020 Texas Automotive

appraisal is truly necessary. But unless the “amount of loss” will never be needed (a difficult prediction when litigation has yet to begin), appraisals should generally go forward without preemptive intervention by the courts.

Numerous carriers in Texas and several other states we are licensed in are acting in bad faith by picking and choosing when they either invoke the right of appraisal or deny the insured’s right of appraisal. ese carriers have twisted the appraisal process into something only they are allowed to use to their own expected advantage. is unlawful action is harming the insured policyholders of Texas and several other states. We are confident that courts in the counties where clients live, work and pay taxes will punish these carriers for the Continued on page 22

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damages and harm they have unlawfully inflicted upon their policyholders. e spirit of the Appraisal Clause is to resolve loss disputes fairly and in a timely and cost-effective manner. rough the Appraisal Clause, loss disputes can be resolved relatively quickly, economically, equitably and amicably by unbiased experienced independent third-party appraisers as opposed to costly and timeconsuming methods such as mediation, arbitration and litigation.

I hope I have reassured you we are still working as diligently as ever throughout this pandemic to minimize the setback for our clients and regain the unlawful loss of rights for all insureds of Texas.

However, you need not wait for us to fight this battle on our own.

Call or write to the TDI and your state representatives and let them know this is an issue that concerns and troubles you. Please call me should you have any questions relating to the policy or covered loss.

We have most insurance policies in our library. Always keep in mind a safe repair is a quality repair, and quality equates to value. I thank you for your question and look forward to any follow-up questions that may arise. TXA

To learn more!

55 Over ons ti Loca ve you r to se

Sincerely, Robert L. McDorman

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