Contents
JUNE 2021
on the
cover
Official publication of the Auto Body Association of Texas
DOWN BUT NEVER OUT:
ABAT BOARD OF DIRECTORS
Why the Appraisal Clause Will Always Matter by Joel Gausten
14
DEPARTMENTS
4
6 7 8 9 10 18 20
PRESIDENT’S MESSAGE by Burl Richards We Still Won EXECUTIVE DIRECTOR’S MESSAGE by Jill Tuggle The 2021 Texas Auto Body Trade Show: All about the Hotel 2021 TEXAS AUTO BODY TRADE SHOW: SAVE THE DATE!
EDITOR’S MESSAGE by Joel Gausten Your Voice Was Heard ABAT MEMBERSHIP APPLICATION
President Burl Richards Burl's Collision Center burl@burlscollision.com (903) 657-8082
Vice President Eric McKenzie Park Place Dealerships emckenzie@parkplace.com (214) 443-8250
Chairman of the Board Corey Pigg S&W Expert Collision Repair coreyp@swcollision.com (936) 634-8361
Treasurer David Osburn Paint Works davidosburn@paintworkstyler.com (817) 648-5797
Executive Director Jill Tuggle jill@abat.us (817) 899-0554
ABAT BOARD MEMBERS Bobby Beason DeMontrond Collision Center bobby.beason@demontrond.com (936) 577-2747
Robert McDorman Auto Claim Specialists rmcdorman@autoclaimspecialists.com (817) 756-5482
Larry Cernosek Deer Park Paint & Body lcwrecker@comcast.net (281) 930-1539
Chad Neal Innovative Collision Equipment Chadwneal@yahoo.com (817) 527-2143
Kevin Ellison Westway Ford kellison@vtaig.com (972) 584-9033
Logan Payne Payne & Sons Paint & Body logan@paynescollision.com (214) 321-4362
Chad Kiffe Berli's Body & Fine Finishes chadk@berlisbody.com (512) 251-6136
Manuel Rubio Miracle Body & Paint manuelr@miraclebp.com (210) 843-9564
John Kopriva Kopriva Body Works jtkopriva@gmail.com (713) 923-4412
Darrell Smith McDaniel’s Quality Body Works Inc darrell-mcdaniels@sbcglobal.net (903) 753-5391
Greg Luther Helfman Collision gluther@helfman.com (713) 574-5060
Mike Williams All Star Collision Center sales@allstarcollision.us (903) 589-3160
Published by: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963 PUBLISHER Thomas Greco / thomas@grecopublishing.com
ABAT JUNE MEETING NOTICE: OVERCOMING OBJECTIONS TO PAYMENT FOR NEEDED REPAIR PROCEDURES
SALES DIRECTOR Alicia Figurelli / alicia@grecopublishing.com EDITORIAL DIRECTOR Joel Gausten / joel@grecopublishing.com
ASK THE EXPERT by Robert L. McDorman What Did the Appraisal Clause Bill Hearing Reveal?
EDITORIAL/CREATIVE COORDINATOR Alana Bonillo / alana@grecopublishing.com
INDUSTRY ADVICE: ASK MIKE Why Aren’t People Pulling OEM Procedures?
PRODUCTION COORDINATOR Joe Greco / joe@grecopublishing.com
OFFICE MANAGER Donna Greco / donna@grecopublishing.com
ADVERTISERS’ INDEX 300 Advantage..................................................... 4
Paint Works Dallas............................................... IFC
Auto Claim Specialists........................................ 17
PPG.......................................................................... 5
Beacon Equipment Resources......................... 21
Reliable Automotive Equipment....................... 12-13
CAR-O-LINER Southwest................................... 16
Sherwin-Williams.................................................. OBC
Charles Maund Toyota....................................... 11
Spanesi................................................................... 22
Ecotech................................................................... IBC
Tasco Auto Color................................................. 11
FindPigtails.com.................................................... 19
USI North America............................................... 15 3 JUNE 2021 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 © 2021 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
We still won Burl Richards ABAT President
A
At the time I write this message, it appears that our Appraisal Clause legislation – House Bill 2534 – will not be moving forward during this current legislative session. Additionally, House Bill 1131 – which would have required any part used in a repair to meet OEM standards – is officially off the table for another two years. There’s good news and bad news with this, and the bad news is pretty obvious. When we started this session, we knew it would be extremely difficult to get either bill passed. There is a lot going on in Texas at the moment, and the Legislature got slammed with bills that were highly controversial. Ultimately, it was too easy for House Bill 2534 – a simple and straightforward consumer-protection tool – to get lost in the fray. Here’s the good news: We are far from throwing in the towel
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in promoting the Appraisal Clause. If you take a look at our industry’s national media, you’ll see several news pieces discussing our efforts with this bill and the critical points we’ve raised in regard to the need for the Right of Appraisal to exist in all automotive insurance policies in Texas. We have received tremendous support and encouragement from several other collision repair associations, and we have heard feedback from consumers who are now very aware of their right to invoke appraisal in situations where they would otherwise feel backed into a corner. This is an incredible step forward for our industry here in Texas and across the country. Every person who owns a body shop in America should serve as a consumer advocate, and I know that vehicle owners and policyholders are more educated now than they were a year ago as a result of ABAT’s efforts. We should all be proud of that. Although our chances of success in this session have come to an end, don’t think that our work is over for the next two years. Now more than ever, we need our members to get involved in the legislative arena. Now is the time to get to know your local representatives and leaders. You are constituents, taxpayers and citizens, and our politicians need to know who we are and what is on our minds. We don’t have tons of money, but we have businesses and votes. It’s too late to convince a legislator to support our causes when a vote is over; we need to reach out to these folks as early in the process as possible. We’re one of many industries hoping to achieve things politically, but every legislator in our respective districts is ultimately accountable to us. Let’s work to make sure they do the right thing for our consumers and all Texas citizens. I’d like to give special thanks to Representative Travis Clardy, who sponsored our bills and is a true champion of our industry. He has sponsored bills for us for three sessions now, and his unwavering support is greatly appreciated. I’d also like to thank our lobbyist, Jacob Smith, for always working hard on our behalf and getting us this far. Rest assured that the Texas Legislature knows ABAT and is familiar with our goals on behalf of our customers. I have no doubt that this will lead us to great victories in the future.
burl@burlscollision.com
4 JUNE 2021 Texas Automotive
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Executive Director’s Message The 2021 Texas Auto Body Trade Show: All about the HOTEl
W
When January comes around, people often set goals and resolutions or just simply have a “word” for the year. When plans started to take shape for the 2021 Texas Auto Body Trade Show, I had one word in mind: “Destination.” I have kept that word in mind throughout the entire planning process. What does everyone love about the big shows? The locations – just look at SEMA in Las Vegas. Shining lights, the ringing of slot machines, shows, great food… and a hefty price tag. The show is absolutely amazing, but what if I told you that you could get some of the same great education and cleverly themed accommodations AND see all the newest tools and equipment RIGHT HERE in Texas? Oh, yeah, and a fun-filled weekend that won’t break the bank? Well, you can – and it is all at the Texas Auto Body Trade Show. For the next few months, my messages to you will be showcentric, giving you the highlights of what you can expect at the biggest trade show of its kind in the south. This month, it is all about the hotel.
Texican Court is a boutique hotel literally steps away from the Irving Convention Center, where the show is taking place. As we say here in Texas, “You could throw a rock and hit it.” Like its name, the theme is Texas-meets-Mexico – casual and very cool. You will feel like you’re stepping onto the set of a retro ’70s cowboy movie where the perfectly curated décor is both swanky and western.
Rooms are laid out motel-style, Jill Tuggle with the doors on the exterior, and the ABAT Executive Director circular pool is surrounded by cacti of many varieties. Once inside, you will find concrete floors, pennytiled bathrooms and a full-size retro refrigerator completely stocked with beer, liquor and a variety of non-alcoholic drinks. The coffee table is stocked with snacks and candy as well. Mid-century modern furnishings are finished off with Mexican sarape blankets and Egyptian cotton linens, which add a luxurious touch to this amazing space. The rooms have all the ingredients for a fun time without that hefty price tag!
To lock in the on-site fun, Two Mules Cantina and Salt Tequila Bar feature live music, handcrafted cocktails and amazing food. The hotel grounds feature four acres of grassy areas, fire pits (with s’mores), cornhole, horseshoes and more! You can borrow one of the hotel’s bikes for a fun way to get to the shops across the street or take advantage of its free parking. So, yes, she is all that and a bag of chips – and for the incredible rate of $119/night! Bring your spouse or a friend and enjoy a FUN weekend at the Texas Auto Body Trade Show and Texican Court! Book online at abat.us events/2021tradeshow. jill@abat.com TXA Photos courtesy of Texican Court
6 JUNE 2021 Texas Automotive
7 JUNE 2021 Texas Automotive
Editor’s Message
YOUR VOICE WAS HEARD
A
As we were putting together this issue of Texas Automotive, word came down that neither of ABAT’s current bills would be moving forward in this two-year legislative session. Although it’s hard not to think of this development as a disappointment, I’d like to share some thoughts that I hope will provide a positive perspective on things. As a professional journalist, I learned decades ago that the world doesn’t stop spinning when 5pm rolls around. News can happen at any hour, so being ready to stay on top of things regardless of the time comes with the job. For three days, I followed the live stream of the Texas House of Representatives as it discussed and voted on a seemingly endless list of bills. In fact, the second day’s session ran about 12 hours. To say this was the most grueling and intense legislative process I’ve ever witnessed would be an understatement. You don’t need me to tell you that these past 15 months have been challenging for everyone, but this reality was brought home as House members debated a slew of highly contentious pieces of legislation. From COVID-19 to education to civil rights, the topics brought to the floor presented snapshots of the critical issues that Texas and every other state in our country is grappling with right now. Then, toward the end of the third evening, House Bill 2534 – often referred to as “the Appraisal Clause Bill” – was heard. (ABAT’s other legislation, House Bill 1131, didn’t move beyond the House Committee on Insurance.) Representative Travis Clardy, a longtime supporter of ABAT and the collision repair industry, offered a succinct declaration of the bill’s intent: “House Bill 2534 has to do with the Right of Appraisal. This is a longstanding tradition in the Insurance Code, but this will make it mandatory and allow everybody – both the insurance companies and the consumers – to elect the appraiser to make sure they get fair value with their vehicles.”
Joel Gausten Editor
And then it passed in a flash. The whole thing took about 20 seconds. Really. Unlike several bills heard that day, there was no point of order, no histrionics, no heated 45-minute-back-and-forth, no controversy – just the quick acknowledgement and acceptance of a reasonable consumer-protection bill that earned a positive vote from the majority of the room. It was refreshing to see the bill move forward so rapidly based on the fact that it just made sense. If you sat through even one day of the House proceedings that week, you know that this swift vote alone was a massive victory. Unfortunately, the Senate didn’t run with the ball; there were just too many other things going on in this session. That’s a reflection of the state of American politics – not an indicator that House Bill 2534 didn’t matter. On the contrary, I’ve never seen a bill earn so much clear interest from a House committee. If you saw the live stream of that Committee hearing, you saw representatives taking the insurance industry to task over its gross under-indemnification of Texas consumers. It was clear that the Committee understands why the Appraisal Clause needs to be in every automotive insurance policy in this state. Here is something important to keep in mind: House Bill 2534 had its moment to be heard on the House floor, and it received a favorable review from the Committee on Insurance. ABAT has become a known consumer-advocacy force in the Legislature. There’s a lot of strength and momentum to come from that. The association’s bills are paused for now, but ABAT’s standing in the political arena is not in dispute. It will be very interesting to see what will happen once our world truly gets back to normal and many of the issues that are clogging this current session are addressed and off the table. Please read this month’s Ask the Expert by Robert L. McDorman and our cover story for more insight into ABAT’s efforts in this session on behalf of Texas consumers. joel@grecopublishing.com
ATTN ABAT MEMBERS:
TXA
GIVE YOUR CONSUMERS A VOICE!
If you have customers who’ve had issues with their insurance companies (under-indemnification, total loss disputes, etc.) while their vehicles were at your shop, Texas Automotive magazine wants to hear their stories! Contact Texas Automotive Editorial Director Joel Gausten at (603) 680-4324 or joel@grecopublishing.com to discuss having their story featured in our newest series, “The Consumer’s Voice”! 8 JUNE 2021 Texas Automotive
9 JUNE 2021 Texas Automotive
Meeting AABAT BAT M eeting June 15, 2021 Jun e 15, 2021 5:00 - 8:00 pm
5:00 - 8:00 pm Overcoming Objections to Payment Overcoming Objections to Payment for Needed Procedures for NeededRepair Repair Procedures Presented International Trainer Ronak Presented byby International TrainerTim Tim Ronak Overcoming Objections to Payment for Needed Repair Procedures Along with the rapidly evolving construction, safety and ADAS technology imbedded within modern cars, new operations often need unheard-of new procedures which is confusing the billing process. This increased technology is requiring more time and tooling to restore and confirm that the consumer's vehicle functions the same in the next collision event as it did in the one that created the loss. In an environment of cost containment, these new procedures are getting significant push back from those that reimburse consumers for their loss. How do you overcome those objections?
Presentation Highlights:
SAVE THE DATE! June 15, 2021 5:00 PM For regional location information & RSVP please contact: Jill Tuggle
1. What are typical Insurers required to do to settle a loss?
817-899-0554
2. Insurer objections when requesting rates or procedures
jill@abat.us
3. The general Categories of Insurer Objections 4. Dispute Resolution-What are my customers’ options? Tim Ronak, Senior Services Consultant, AkzoNobel
Tim Ronak grew up in the collision repair industry beginning at age 14 working within his family’s business in Calgary Alberta, Canada. Through his high school years and at the age of 17 became the youngest interprovincially-certified Autobody Technician in Canada. After completing a degree in Economics and Management at the University of Calgary and achieving Canadian Securities accreditation in 1993, he began working for the Canadian Federal Government administering and developing advanced training programs for the automotive industry within Alberta. This opportunity led into a management position with a large GM dealer in Calgary. In 1995, Tim joined AkzoNobel and has since developed numerous seminars focused on operational improvements in the collision center. In 2000, AkzoNobel relocated Tim to Southern California where he continued his passion of providing value to the collision repair industry. His contributions to the industry include: assistance in revising the Alberta Apprenticeship program; frequent speaker at state trade associations and national conferences including NACE, CCIF, and the RDE at SEMA; performance group facilitation; industryrelated articles in national trade publications; and actively continues to develop business tools used by collision professionals throughout the industry. Over his 24 years with AkzoNobel, Tim has enthusiastically been a shop advocate in two countries and consulted with more than 1,000 collision repair businesses to improve their overall operational performance.
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Cover Story
by Joel Gausten
Down but never out:
Why the appraisal clause will always matter For years, ABAT has championed the Appraisal Clause as a means for Texas consumers to receive the full value of the vehicles when loss disputes arise with their auto insurers. Unfortunately, not all carriers in the Lone Star State provide this option, leaving some insureds without the financial protection they deserve. Earlier this year, the association endorsed House Bill 2534, which aimed to mandate the Appraisal Clause across the board in all policies. Despite gaining tremendous attention and momentum, the legislation was not heard in the Senate during this legislative session. However, there is still much to celebrate when you consider just how far the bill went in a few short months. “This was the first time this bill had been introduced into the Legislature,” ABAT Lobbyist Jacob Smith explains. “Typically, it takes three or four sessions to get something passed. For us to go as far as we did – through the House Committee on Insurance and out of the House with a major vote and over to the Senate – was a great step forward.” The House’s positive vote for House Bill 2534 followed an incredibly favorable hearing and review by the Committee on Insurance. However, the bill had to fight for attention while surrounded by dozens upon dozens of highly polarizing pieces of legislation that not only required considerable time but represented the fractured and overburdened state of our country’s current political system. “There are so many things going on in the Legislature right now that we cannot control as far as timing goes,” Smith says. “The process has slowed down, sped up and slowed down again. With the politics and other huge issues, there are only so many things you can control. Really, 70 to 80 percent of it is up to the members.” Although the bill’s journey in this session has come to an end, Smith is confident that its goals have a future in the Texas Legislature and beyond. “It is a fair bill for any party. The same right that the consumer has is the same right that the insurance company has. It’s just a fair and level playing field given to the consumer that they typically don’t have. Insurance is not a free market; it’s a mandate. We don’t get to negotiate what’s in those contracts; we get to choose from various levels we’re offered. Consumers don’t have many tools in their toolbox, and no one wants to go into litigation – especially over a few thousand dollars. But those few thousand could mean a part on the vehicle that impacts an
individual’s safety. That’s the main point of this bill; if we can ensure safety and a level playing field for the consumer, then we’ve done our jobs.” It’s one thing for ABAT and House members to understand the importance of the Appraisal Clause, but it’s another thing for consumers to gain knowledge of this option. Thankfully, that is exactly what happened during this session. In addition to testifying before the Committee on Insurance, ABAT Board member Robert L. McDorman (Auto Claim Specialists) undertook an extensive text campaign to contact every customer in his database and encourage them to reach out to their legislators in support of House Bill 2534 via the “No More Games” online portal (texaswatch.org/no-more-games) created by the consumer-advocacy group Texas Watch. McDorman was aided in this effort by his daughters, Alla and Victoria, who are both licensed public adjusters with Auto Claim Specialists. The contacts resulted in massive feedback from customers who supported the Appraisal Clause and pledged to do what they could to convince their area representatives to support the bill. As of late May, more than 800 Texas citizens had filled out the “No More Games” form and contacted a local lawmaker. (In one very inspiring case, a past Auto Claim Specialists customer replied to McDorman’s text by informing him that he was pursuing his public insurance adjuster license to help others the way he had been helped.) McDorman was honored to have the opportunity to appear before the Committee on Insurance in support of House Bill 2534 and back up his position with true data. “Education is evolution. It was very important to me to look those Committee members in the eye and represent the insureds in Texas and their rights. The reception I got from them was real, understanding and compassionate.” Despite the current fate of ABAT’s push for the Appraisal Clause, McDorman isn’t about to walk away in defeat. “There’s absolutely no wind taken out of my sail. I’m proud of where we got to, and I’m proud of the reception we have from the Committee, the questions they asked and the respect they gave us. I’m very confident about the future. We just have to keep educating and doing the right thing. “Columbus didn’t get to America on his first try,” he adds. “That means that when we get to where we’re going, we’ll celebrate just like he did.” continued on pg. 21
14 JUNE 2021 Texas Automotive
Russell & Smith Logging Big Paint Hours with USI Booths & Prep Station Buying a paint booth is a huge investment, and there are many factors to carefully consider before selecting one. Will the booth work well in a region where there’s a ton of humidity and with drastic changes in the weather? How long do you think the booth will last and will it require a lot of maintenance? Will your painters be comfortable using it every day and finally, will the company making the booth provide solid training and reliable customer service? To answer these questions before acquiring two Chronotech spray booths and a prep deck from USI ITALIA back in 2004, Collision Center Manager Kevin McIllveen at Russell & Smith Body Shop in Houston, TX spent six months studying the market. He was looking for the best booths that matched his needs to use in a brand-new 36,000 sq. ft. facility that the company built from the ground up. Mcllveen, age 56, entered the industry more than three decades ago as an estimator and has worked for Russell & Smith Body Shop since 1993. His goal with his new spray booths was to improve the efficiencies in his paint department and to accommodate his production, he said, while simultaneously saving time and energy if possible. The vetting process was arduous but worth it in the end. "We did our research so that we could make an educated decision," he said. "I went to NACE two years in a row and talked to literally everyone and asked a lot of questions. We knew that this was going to be a very significant investment, so we took the time to perform our due diligence to cover all our bases. We invested in their prep stations as well, which was another good decision, because my guys can work so much faster and effectively with five different places where we can spray. We put a curtain up in the prep booth that provides us two additional spaces that are heated and properly ventilated. So, when we are really jammed, we can handle the workload and maintain our cycle time without interrupting or slowing down our production." After using them for a very short time, Mcllveen could clearly see that his Chronotechs were more than capable as they quickly became a centerpiece in his new, high-end, modern shop. "We have four paint teams here, consisting of a painter and a painter’s helper and we consistently log approximately 600-700 paint hours weekly,” he said. “We switched to waterborne paint when we opened this facility because we want to provide a healthier climate for our employees and the community as a whole.” Why was Mcllveen able to improve his numbers by simply adding two USI booths? “In the end, it all comes down to their airflow because we never need blowers or additional air to cure these vehicles. The fans in these Chronotechs are exceptional because they feature variable speeds, so we can switch depending on the parameters of each job. Our painters are producing an impressive product day after day, so these booths are saving us both time and money. We paint an average of 400 cars every month, so
we push these booths and they never let us down.” Any issues that Russell & Smith Body Shop have encountered with their USI ITALIA booths have been rare and far between. But Mcllveen feels good knowing that if called upon, the company will respond and find solutions promptly. “If you do your scheduled maintenance and keep everything clean, these booths will last you 30 years and maybe even longer. The issues that we have encountered with the Chronotechs have been minor and quickly solved, which is impressive when you think that we have been using these booths daily for the last 16 years. I tell people that these booths will be here long after I’ve retired!” After training provided by USI ITALIA, Mcllveen’s painters were able to start spraying after one day, he said. "The Chronotechs are designed to work with waterborne paint, which makes it easier for our painters to do their work. After a very short time, all of our guys were comfortable and the results were consistently exceptional.” Mcllveen is also impressed by the Chronotech's sturdy construction and durability. "Some booths are just a box, but these are wellbuilt," he said. “I know, because I've seen them all and there isn't anything like a USI ITALIA booth." His career in collision repair industry has been a great experience and products like his USI ITALIA spray booths and prep station are a part of that, he said. “We haven’t had to furlough anybody here and that’s because we value our people and, in the end, our Chronotechs are part of the team.”
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Ask The Expert
WHAt did the appraisal clause bill hearing reveal? Dear Mr. McDorman: I operate a collision facility in Southeast Texas. I listened to your testimony last month before the Committee on Insurance in support of House Bill 2534. During your testimony, you stated that your average negotiated increase in total loss settlements for your clients is $3,600 and that the increased settlement often leads to vehicles being repaired. Also, as I understood from your testimony, your average settlement increase on repair procedure under-indemnification claims is over 35 percent. At the end of the hearing, Committee Chairman Oliverson asked about data supporting your surprising statements. I heard Joe Woods of the American Property Casualty Insurance Association testify that the Appraisal Clause was designed for the appraisers and the umpire to come up with a deal that makes the parties happy, and that the valuation difference is only between $500 and $700 in most cases. From our experience, I found his testimony to be completely off the mark. What information did you supply the Committee on Insurance, and what did it reveal about your testimony and the support of House Bill 2534? This is a great observation of the hearing and an excellent question. It was an honor for me to be allowed to speak before the Committee on Insurance in April in regard to House Bill 2534 and the idea of a mandatory Right of Appraisal for motor vehicle insurance policies. I was a little surprised when I heard Mr. Woods’ testimony claiming that the Appraisal Clause was designed for the appraisers and the umpire to “come up with a deal that makes the parties happy.” This could not be further from the truth. The appraisers are required to issue loss statements and exchange and discuss them. Only if they cannot agree on a value are their loss statements turned over to an umpire. In my extensive experience, there has rarely been a need for an umpire. Should an umpire be called into play, the agreement becomes binding on the parties upon any two of the three agreeing on the loss. In response to Mr. Woods’ claim that the valuation difference is only between $500 and $700 in most cases, your observation is absolutely on point. This too could not be further from the truth. After my testimony, I went back and revised our numbers based upon claims from Texas only, which is something I had not looked at before. Our average settlement increase over the carrier’s final offer for Texas claims is $3,523, and we have increased settlement values in some cases by $20,000 to $30,000. These calculations are Robert is a recognized Public Insurance Adjuster and Certified Vehicle Value Expert specializing in motor vehicle-related insurance claim resolution. Robert can be reached at (800) 736-6816, (817) 756-5482 or via email at AskTheExpert@autoclaimspecialists.com.
from our database for 758 total loss claims we have settled in Texas over the past several years. (This constitutes ALL worked claims over this period, not picking and choosing them.) Committee member Ramon Romero stated that he would be concerned if the average settlement increase was as I stated. Committee Chairman Tom Oliverson echoed this sentiment, stating that if the majority were off by $3,600, “that’s significant to me, too.” When asked by Representative Romero if he found it concerning that insurers were off by an average of $3,600, Jon Schnautz of the National Association of Mutual Insurance Companies (NAMIC) replied that he did. The information supporting my testimony on total loss claims was supplied to the Committee on Insurance on or about April 29. During my testimony, I also stated that the average negotiated increase in repair procedure dispute claims that we have handled is more than 35 percent, and that we often uncover unsafe repair procedures in the insurance carriers’ discounted repair estimates. By nature, I am always conservative in my projections. Unlike the total loss and inherent diminished value claims we handle (where we can generate a report showing the settlement details of each at the stroke of a key), the repair procedure dispute claim types require me to manually go through our database to retrieve the data. These types of claims are very technical and require a great deal of experience to handle. At the end of our audit of these types of claims from Texas insureds only, we found the average under-indemnification to be an astonishing 90 percent! The information supporting my testimony on repair procedure claims was supplied to the Committee on Insurance on or about May 10.
18 JUNE 2021 Texas Automotive
by Robert L. McDorman
House Bill 2534 was created to detour this type of underindemnification and the potentially unsafe discounted repair plans issued by the inexperienced insurance appraiser. Please note that State Farm has restricted its insureds from invoking the Right of Appraisal in contest of loss disputes on repairs regardless of whether the written repair estimate constitutes an unsafe repair. Thus, the 90 percent settlement increase we see does not include State Farm insureds who have disputes over the repair methodology used by that company. Since State Farm insureds have no recourse, we can only imagine the magnitude of their under-indemnification. Bill 2534 was designed to correct this by requiring State Farm’s policy to allow the parties to invoke the Right of Appraisal when a loss dispute arises over the repair methodology of the covered vehicle. I would also like to comment on the task assigned to the insurers’ counsel to determine the percent of claimants who invoke appraisal. I am sure that this is a very small percent, but that in no way reflects upon the importance of this bill. What it does reflect upon – and very poorly, I may add – is the lack of
candor between the insurers and their policyholders in regard to those policyholders’ rights in loss disputes. I have talked to thousands of insureds over the years, and I have yet to hear from a single one who was told by their carrier about their right to invoke appraisal. The percent of insureds who request appraisal is currently small because hardly anyone knows about this right. This is something that publicity from this bill can hopefully help to change. On April 27, the House Insurance Committee voted 5-4 in favor of this legislation. 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. Sincerely, Robert L. McDorman TXA
19 JUNE 2021 Texas Automotive
Industry Advice: Ask Mike
Why aren’t people pulling oem procedures? This month, we “ASK MIKE” to share his thoughts on the industry’s lack of adherence to OEM repair procedures. We at Texas Automotive hope you find this following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industryrelated matter that he can answer in a subsequent issue. Texas Automotive: Obviously, vehicle technology is not going to stop advancing. As a result, repairers need to stay on top of what’s going on with these cars, and pulling the OEM repair procedures is the main part of that. I’ve heard feedback from some shops that are still not enforcing this; they tell me, ‘Our technicians know what to do.’ I’d imagine you’ve been encountering similar statements. How do you respond to that mindset?
for an ‘easy’ button. You can’t just say, ‘I’ve fixed 20 of these cars; I know them inside and out and don’t have to pull the procedures.’ Things change. I’ve seen sectioning procedures change, and I’ve seen something was a one-time-use part one day but wasn’t the next day. We just can’t assume that because we fixed 20 cars last week that we don’t have to research them today. TXA: Of course, we have a huge elephant in the room. I’ve had readers tell me that if they don’t get paid for something, they won’t do it.
MA: That’s insane! How would you like it if a doctor, a surgeon or someone who works on an airplane said, ‘I don’t get paid for it, so I’m not going to do it’? Don’t forget that the consumer signs an authorization for us to fix their car. If we take that car in under a Mike Anderson: You’re right – most people are not pulling OEM premise that there’s a signed authorization, we’re saying, ‘You can repair procedures, and I’m very concerned about that. trust me to do a safe and proper repair.’ You’re liable for that vehicle Let me start by sharing a short story. My friend’s son went into even if it changes ownership. You’d like to believe that the John the Marines several years ago. He got off the bus at Parris Island, Eagle case was a wake-up call, but obviously it wasn’t. People just and the drill instructor ran up and started delivering shock and think they’re too smart for their own good. awe. He yelled, ‘Single file! Single file!’ Then, he said, ‘Pick up your I teach factory training for OEMs, and I still research every suitcase! Put it down! Pick it up! Put it down!’ All of a sudden, my single vehicle that I write an estimate on. If you’re saying you don’t friend’s son laughed. That is the worst thing you can do on your first have the time, then you need to have a conversation with your boss. day of boot camp with a Marine drill instructor! The drill inspector If you’re saying you don’t know how to use the websites – gosh, grabbed my son’s friend by the ear and pulled him in front of a man, we have free webinars and videos on my website that teach mirror. He made him point at the mirror and say, ‘I’m not stupid!’ people how to do it. If you’re a Nissan/Infiniti-certified shop, you Then, the drill instructor made him point the finger back at his own actually have free access – free access – to Nissan/Infiniti’s TechInfo. chest in front the mirror and say, ‘You’re stupid.’ I’m not saying Toyota offers free access to its OEM procedures to its certified that collision repairers are stupid, but this isn’t a joke – it all starts shops. There are resources available; people just need to want to use with us. We all have to take personal responsibility. them. The two percent who are actually doing it right get pushback When somebody doesn’t pull the OEM procedures, it’s usually from third-party payers who say, ‘You’re the only one.’ Well, they due to a few things. One, they don’t have access to them. In that are the only one! case, shame on the shop owner or manager. Number two, they think they’re smarter than an engineer. Number three, they say they TXA: What do you think it’s going to take to get that number up don’t have the time because the company they work for chooses to a respectable amount? We’ve already had the John Eagle case, to be a DRP and says they have to upload an estimate within two and there have already been multiple conversations on this topic. hours. That’s just ludicrous. It’s being stressed at the Collision Industry Conference (CIC) I do training for several OEMs as well as training through and elsewhere. What else needs to be done here? Collision Advice. We show people photos of a vehicle that needs a quarter panel replaced and say, ‘We want you to write an estimate MA: Education, number one. We need to educate people on how to on this.’ I understand it’s a photo, but it’s done as an exercise to see navigate the OEM websites, because they’re all different. Number how well they can identify the OEM repair procedures as well as two, people need to have the time to do it. The days of expecting not-included operations. When we do that, we have 385 lines on an estimator to handle x amount of sales volume every month are our estimate, but the top 10 percent of trainees might have 190 to over. The expectations need to be lowered. There’s no way they can 200 lines on their estimate. The average shop has fewer than 100 achieve that and be thorough in what they’re doing. Body shop lines. I can tell you that just for that one estimate – just replacing owners and managers need to give their employees the right amount a quarter panel on a Toyota – we had 133 pages of information to of time to do it. Also, insurance companies need to recognize that research, pull, review and read. It’s very, very time-consuming. This they’re part of the problem, especially when they want an estimate wasn’t a 30-minute process – it was a five-hour process. I realize uploaded in two hours. That’s not realistic. Technicians need time, there are some challenges, but to not do it is unacceptable. training and the access to resources. The other thing that troubles me is that everybody is looking Somebody asked me, ‘Why don’t all the OEMs standardize 20 JUNE 2021 Texas Automotive
Cover Story their websites?’ Well, they all think their way is the best way. You have a better chance of finding world peace than you do getting three different cultures from five different OEMs to agree. I read somewhere that it takes the average human being five to seven minutes to read a one-page technical document. Just to replace that quarter panel I mentioned earlier, I had 133 pages of OEM documents that I had to review and read. There was also the time it took me to find them. There are nuances to a repair; there are multiple pieces to this. Again, there’s no ‘easy’ button. You just have to take the time and quit complaining about it. Mike Anderson is an Accredited Automotive Manager (AAM) and the former owner of Wagonwork Collision Centers, two highly acclaimed shops located in Alexandria, VA. He has served as a member of many industry organizations throughout his career, including the WMABA Board of Directors, the Mitchell Advisory Board, the MOTOR Advisory Board, the ASE Test Review Committee, the National Auto Body Council, the Collision Industry Conference and the Society of Collision Repair Specialists. Additionally, he is a past Virginia SkillsUSA chairman, serves as a facilitator for Axalta Coating Systems’ highly recognized Business Council 20 Groups in both the US and Canada and facilitates numerous courses for Axalta Coating Systems’ Educational Series. He currently offers expert industry consulting via his latest venture, Collision Advice (collisionadvice.com). TXA
continued from pg. 14 Smith and McDorman are quick to express their appreciation to Ware Wendell, executive director of Texas Watch, for his diligent dedication in support of consumers. “Ware has stood by us and all Texas motorists,” McDorman says. “His input and hard work were a huge part of what we were able to accomplish.” “Texas Watch is a critical ally,” Smith adds. “Having a consumer advocacy group working so closely with ABAT speaks volumes on how critical the Appraisal Clause truly is.” For now, there is the next legislative session to think about. Although two years seems like a long time away, Smith insists that ABAT’s work for the next go-around has already begun – and members need to get involved today. “If you truly believe in safety and helping folks, then you have to keep fighting. We’ve built a process around this country, and it’s supposed to work. In order for that to happen, you have to go to your elected officials. That’s what they’ve been elected for. The way to do your part is to form a relationship with your state representative. They have to know about your issues. If you don’t tell them about them, then they’ll never know.” TXA
21 JUNE 2021 Texas Automotive
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