Contents
JULY 2021
on the
cover
Official publication of the Auto Body Association of Texas
CELEBRATION & EDUCATION:
ABAT BOARD OF DIRECTORS
A First Look at the 2021 Texas Auto Body Trade Show
14
by Joel Gausten
DEPARTMENTS
4 5
PRESIDENT’S MESSAGE by Burl Richards Six Years That Could Save Your Business ABAT MEMBERSHIP APPLICATION
6 7
EXECUTIVE DIRECTOR’S MESSAGE by Jill Tuggle
10
ABAT FEATURE by Joel Gausten
16
ASK THE EXPERT by Robert L. McDorman
20
The 2021 Texas Auto Body Trade Show: All about the Education
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
2021 TEXAS AUTO BODY TRADE SHOW: SAVE THE DATE! Published by: Thomas Greco Publishing, Inc. 244 Chestnut Street, Suite 202, Nutley, NJ 07110 Corporate: (973) 667-6922 / FAX: (973) 235-1963
Overcoming Insurer Objections: An ABAT Statewide Meeting Recap
How Can a Diminished Value Claim Help a Consumer?
PUBLISHER Thomas Greco / thomas@grecopublishing.com SALES DIRECTOR Alicia Figurelli / alicia@grecopublishing.com EDITORIAL DIRECTOR Joel Gausten / joel@grecopublishing.com EDITORIAL/CREATIVE COORDINATOR Alana Bonillo / alana@grecopublishing.com
JUST FOR FUN by Alana Bonillo What’s the Most Memorable Job You’ve Ever Had?
OFFICE MANAGER Donna Greco / donna@grecopublishing.com PRODUCTION COORDINATOR Joe Greco / joe@grecopublishing.com
ADVERTISERS’ INDEX 300 Advantage..................................................... 18
Paint Works Dallas............................................... IFC
Auto Claim Specialists........................................ 17
PPG.......................................................................... 5
Beacon Equipment Resources......................... 9
Reliable Automotive Equipment....................... 12-13
CAR-O-LINER Southwest................................... 19
Sherwin-Williams.................................................. OBC
Ecotech................................................................... IBC
Spanesi................................................................... 22
English Color & Supply....................................... 9
Tasco Auto Color................................................. 21
FindPigtails.com.................................................... 21
USI North America............................................... 8 3 JULY 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
Six years that could save your business Burl Richards ABAT President
L
Let’s go way back in time to…2015. I know that’s really not too far in the past, but it really feels like a lifetime ago when you think about where our industry was back then. I remember all the talk about the Ford F-150 and the rise of aluminum. I also remember hearing about a self-piercing rivet gun and thinking, “What the heck is that?” The technology back then was mind-blowing, but it was nothing compared to what we’re seeing today. The past few years have seen our industry hit with everything from scanning to ADAS. In the last 18 months alone, we’ve seen insurers amp up their demands for photo estimating and remote appraisals – and all the administrative burdens these things have placed on us. Do you think that’s going to stop now that COVID19 is finally slowing down? Not likely. Now, with electric vehicles (EVs) starting to hit the streets in higher numbers, we’re about to face another major revolution in training and procedures. For better or worse, we’ve all experienced a massive leap in the past six years. Where will we be six years from now? Honestly, I don’t think there’s any way we’re going to be able to properly run our businesses in 2027 the way we’re running them today. Just as we had different costs in 2015 compared to today, we’re definitely going to have greater expenses to cover in the near future. Now is
ATTN ABAT MEMBERS:
the time to really sit down, see where your finances are and make plans to stay ahead of what’s to come. So, how do we do this? Well, for one thing, I think our survival in this industry will come down to each and every shop figuring out – on its own – what its costs are and what its charges should be. Otherwise, we’re going to put our fate in the hands of whatever the insurance industry decides is the “prevailing practice” in terms of rates and procedures. Insurers are great at predicting the future; after all, they’re in business to assess risk and plan ahead. That’s exactly what we need to do. None of us can afford to keep measuring our success with benchmarks created by an outside party based on other shops that don’t have our individual investments, overhead and costs. Another major thing you can do to keep your business strong is attend this year’s Texas Auto Body Trade Show. We’re working hard to put together the most informative educational program you’ll find anywhere in the industry. Please check out this month’s cover story and Executive Director’s Message to learn more.
burl@burlscollision.com
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”! 4 JULY 2021 Texas Automotive
5 JULY 2021 Texas Automotive
Executive Director’s Message
The 2021 Texas Auto Body Trade Show:
All about the EDUCATION Jill Tuggle
E
ABAT Executive Director
Education. It’s where it all started for the Texas Auto Body Trade Show, and it has been the foundation of the show since its inception. The ABAT meeting guarantee applies here more than anywhere. You will learn something that will make you more money the day you get back from the show – we guarantee it. The future has arrived, and we have the education that you absolutely cannot afford to miss. Seminar after seminar over the past four to five years has drilled into us one major common message: Electric and ADASequipped vehicles will soon be king. Well, that king has taken his throne. If you haven’t been preparing your shop, you just might be left in the Dark Ages. Don’t fret – the Texas Auto Body Trade Show can help! Nationally recognized speakers who grace the SEMA Show lineup are slated to be in Irving on September 17 and 18 to deliver this paramount information to the attendees of the Texas Auto Body Trade Show. We will be offering classes to suit owners, managers, estimators and technicians.
The celebrity appearances are only beginning! AkzoNobel is bringing in Dave Kindig from the hit TV show Bitchin’ Rides. Dave is much more than a master at restoration, and he will be there to share his incredible story with Texas Auto Body Trade Show attendees. He will be signing autographs on Friday, so be sure to get there early! Seminars will be running from Friday morning until Saturday afternoon. Presenters have some amazing topics prepared. Below are just a few:
You can expect to hear from speakers like Mark Olson of VECO Experts, Nick Dominato of adasThink, Frank Terlep with Auto Techcelerators, LLC and many more, including (but not limited to) the industry’s favorite speaker, Mike Anderson. Mike always delivers a powerful and inspiring message filled with facts and research-based techniques to elevate your business and sharpen your negotiating game. His technical knowledge is only surpassed by his own ability to overcome challenges and inspire the entire industry. Go out and find someone who doesn’t LOVE Mike… I’ll wait.
We can’t wait to tell you everything we have planned, so stay tuned for updates on classes and times by following ABAT at facebook.com/abat.us, subscribing to our email list (text ABAT to 22828) and by visiting abat.us. Providing this level of education is what sets us apart from the rest. Taking the time to attend this level of education is what sets you apart.
• DRP and OEM certified repair networks – the differences and what the future holds for each. • The year 2035 & seven steps you must take to survive in the future. • “Cyber Insecurity” – the threats to businesses from outside sources that can do major damage to a company through hacking, ransomware, spyware and more.
6 JULY 2021 Texas
Automotive
jill@abat.com
TXA
7 JULY 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.”
USI of North America | 565 Commerce Street Franklin Lakes, NJ 07417 | 201-405-7761 | s.moretto@usius.com | www.usius.com 8 JULY 2021 Texas Automotive
9 JULY 2021 Texas Automotive
ABAT Feature
Overcoming Insurer Objections:
An ABAT Statewide Meeting Recap
June 15 was the day ABAT returned to face-to-face meetings – and delivered one of the most powerful and engaging presentations in the association’s history. Broadcast simultaneously at nine locations throughout the state, the meeting welcomed AkzoNobel Senior Services Consultant Tim Ronak for “Overcoming Objections to Payment for Needed Procedures.” The seminar’s intriguing title was matched by content that provided fresh perspectives on some of the industry’s longestrunning issues. Ronak began his presentation by offering a clear explanation of exactly what insurers are required to do for their policyholders. “In the US, an insurer is required to follow the policy that it issues. Technically, somewhere within that policy language, is the intent to fully indemnify an ‘insured’ – a covered person – for a covered and demonstrated loss. ‘Indemnify’ means to compensate for damage for loss sustained, any expenses incurred [and] to guard against or secure an anticipated loss and give security against future damage or liability. An insurer, in indemnifying, is protecting that insured from some future cost outlay that they might have because something happens that their particular contracted policy covers. “‘Covered’ is the amount of risk or liability that is covered for an individual or entity by way of those insurance services […] They’re going to cover you based on an amount they set in place, or they’re going to say, ‘Our insurance package is going to cover you for any loss you’re going to incur because of that risk.’ The ‘demonstrated’ part is simply documented proof of the steps and resources quantified by cost to restore the damaged property or parts thereof to their pre-accident, operational safety, function and appearance.” In the case of first-party claims, insurers have three choices when contacted by a policyholder who has been in a collision: Pay for the loss in money, repair the vehicle or replace the damaged property. “In the payment of loss, they are required to have these [three options] mutually exclusive. They can’t say, ‘We’re going to repair it, but we’re going to limit the liability to this amount because we just think you could repair for that. We’ve ‘got a guy’ who would do it for this, so we’re going to hold you or limit you to what this other guy says it will cost.’ Guess what? That is not binding on you.” Naturally, insurers largely avoid repairing vehicles themselves, as doing so would make them liable for that work. According to Ronak, this is why “In 99 percent of the cases in our industry, they pay in money.” Unfortunately, this is also why many of the battles between shops and insurers currently exist. “They use all kinds of negotiation tactics to try and limit how much money they’re going to pay.”
Ronak shared several familiar examples of the “art of misdirection” that insurers employ to keep their costs down during the repair process. These included (but were not limited to) carriers telling the repair facility that the shop’s Labor Rate is not competitive in its market, some of the shop’s charges are just a part of doing business, that the OEM information the shop utilizes is only “recommended” and not “required,” the shop is applying too many hours to a particular procedure or even that the OEM parts the shop wants to use are unnecessary and remanufactured wheels have better warranties than new ones. In his mind, the only way for a collision shop to fight back against these common attempts to reduce payments is to research and fully document why everything performed during the repair is necessary to bring the vehicle back to pre-loss condition. “The reality is, everything needs to be substantiated as a business case […] If you have never read one of your insured’s contracts, then arguing about what you should or shouldn’t get paid for is basically moot, because you have no clue. You just simply think that just because the guy down the street gets paid something that you should, too. That’s not the way it works. If you’re going to be performing a repair, the only path for you to go through is the OEM repair procedures; that’s where you find out what it is you need to do along with the specific prescribed steps to do it.” Additionally, shops would do well to recognize that the insurer’s estimate is not the definitive word on a repair. “To be completely clear, insurer estimates are strictly internal insurer documents that have no place in the shop as part of the repair. Period. It is intended to substantiate an internal estimate cost of loss calculation to justify that insurance check payment they’re going to make to their client. It has no value in the collision shop; it’s not representative of what you need to do.” Not surprisingly, much of Ronak’s presentation explored the differences between what an insurer claims is the “prevailing” rate in a market area and what a facility shop needs to independently determine and charge as the rate needed to perform professional work. He stressed that a shop’s individual Labor Rate may be higher than an insurer’s rate in a local market area based on that individual repair business’ justified investment in training, facility and equipment to be capable of performing repairs. “By having a contracted rate in a marketplace and using it to blend into other rates to hold the ‘prevailing’ rate down, [insurers] are buying down the rate through agreements,” he said, later adding that “the deliberate use of any concessionary contracted or DRP rate in the calculation of a ‘prevailing market rate’ may be a violation of the Sherman Antitrust Act and may be described as purchaser price fixing.”
10 JULY 2021 Texas Automotive
by Joel Gausten
Of course, insurers are also notorious for attempting to play Let’s Make a Deal with shops by shifting the costs of one procedure to another in order to avoid setting a precedent for paying a certain procedure in a market area. While such practices of shifting costs may ensure that a repair facility ultimately gets paid the total amount of money the shop needs to complete a proper repair, Ronak cautioned that they could lead to “a slippery slope” of legal ramifications down the road. “After the fact, the repair shop paperwork is considered a legal document, and the shop is liable for both the documentation as well as the actual repairs performed. Deviations between the actual paperwork and what was actually performed on the vehicle cause huge fraud. It’s not just about being paid; you need to be paid for what you do exactly as you do it.” In terms of how DRP facilities address their frustrations over the Labor Rates they receive from insurance partners, Ronak made no attempt to mince his words.
“If you sign an agreement and agree to a rate, quit complaining. You signed a contract; you made a decision. If you don’t like the contract after you signed it? Well, shame on you. Exit that contract, but don’t complain that a particular provider is not paying you enough when you sign an agreement.” Perhaps the greatest takeaway from Ronak’s presentation was that auto body businesses are the true repair experts and insurers are there to pay for the work performed to the limits of the policies they sell. Anything that strays from or corrupts that simple formula is a recipe for conflict and disaster. “Any disputes are technically between the insured and the insurer. The shop is a service provider, and that’s it.” Video of “Overcoming Objections to Payment for Needed Procedures” is exclusively available to ABAT members at abat.us.
11 JULY 2021 Texas Automotive
TXA
Cover Story
CELEBRATION & EDUCATION: It’s almost time to get back to experiencing the Texas collision repair industry the way it’s meant to be – in person! On September 17 and 18, ABAT will present the 2021 Texas Auto Body Trade Show at an exciting new location, the Irving Convention Center. In addition to the Toyota Music Factory, great restaurants and other attractions that have made this year’s event a must-see destination, the Trade Show itself will give attendees two jam-packed days of networking opportunities, vendor exhibits of the industry’s best products and services and extensive education and training that will bring nationally known presenters directly to the Lone Star State. With the industry in a state of accelerated change, ABAT is currently hard at work developing a weekend of seminars and other events that will aim to provide technicians, owners and managers fresh perspectives and new directions. With ADAS a major issue impacting repairers in and out of Texas, the association has enlisted Nick Dominato, founder of adasThink and senior vice president of asTech, to give a special presentation on what he calls the “industry’s blind spot” on this critical topic. “We have found that ADAS calibrations are being missed at a rate of about 85 to 88 percent,” he reveals. To help Texas technicians do their part to reverse this national trend, Dominato will provide an extensive overview of “where we are, where we’re going and what to do about it.” He will use adasThink data and statistics to showcase the calibration needs in various makes and models, common sensors that require calibrations and how often these operations should be performed in even the most seemingly rudimentary repairs. The presentation will also feature real-world case studies that demonstrate what happens when calibrations are not performed.
As a way for attendees to get the most out of his upcoming discussion, he encourages shops to review past jobs to see how often they have been performing calibrations to better establish where they are in terms of embracing these procedures compared to the industrywide figures he will present. Of course, Dominato plans to also make the most out of the great opportunity to finally give a hands-on, physical presentation after such a long wait. He plans to bring in a radar sensor for the audience to enable them to actually see what it means for a sensor to be misaligned in real time. “It’s been nice doing Zoom presentations, but it just doesn’t capture that real live and in-person experience.” While there are plenty of things that require industry members’ attention in the here and now, the Trade Show will shine a light on what collision repair will look like down the road. During his can’tmiss presentation, Frank Terlep of Auto Techcelerators, LLC will take showgoers on a journey to the year 2035, which he predicts will have a drastically different collision repair landscape than the one we see today. “By presenting what I think the industry will look like in 14 years, I hope to educate the industry on new technologies and trends they will ultimately need to learn about, understand and implement into their businesses,” he says. “A couple of technologies that will change industry practices dramatically in 14 years are telematics and Artificial Intelligence [AI]. Telematics will change everything from first notice of loss [FNOL] to how recalls are handled. AI, which is already making its way into the industry, will change the way estimates are written, the way hail damage is estimated, the way total losses are managed and much more. AI will affect all aspects of the industry!”
14 JULY 2021 Texas Automotive
by Joel Gausten
A FIRST LOOK AT THE 2021 TEXAS AUTO BODY TRADE SHOW To better acquaint attendees with the topic he’ll discuss, Terlep has provided this checklist for them to complete before making their way to his course: ■ “Take 30 minutes, go online and do a little research on the future of telematics, Artificial Intelligence and virtual reality. These are three technologies that will change our industry dramatically.” ■ “Take a look at their business, identify one technology or trend they feel they need help with and develop a question I might be able to answer.” ■ “Invite many of their industry associates to my session so they share ideas during and after my presentation.” Although he has presented virtually in recent times, Terlep believes that a class of this nature will truly thrive in the live structure available at this year’s Trade Show. “In-person formats always have more energy; the presenter and the audience are more energetic. Also, in a live environment, attendees can get together right after the presentation to discuss what they heard and learned.” Adding to the exciting offerings this September, the Trade Show will feature legendary industry speaker and consultant Mike Anderson of Collision Advice, who is in the process of creating content that will speak directly to the needs of the ABAT community. One of the field’s most engaging and passionate
presenters, he looks forward to traveling to Texas and contributing to an unforgettable weekend. “I’m really excited to be attending the show while we come out of COVID-19. It will be great to see everybody in person. Of course, Texas also has a great association – one of the best in the country. I’m looking forward to wearing my cowboy boots while I’m down there!” Anderson asks ABAT members who have any questions or concerns at their business that he could help address during his Trade Show appearance to contact him at mike@collisionadvice. com (and copy his assistant, Tiffany Driggers, at tiffany@ collisionadvice.com). In addition to the insights delivered in the seminar rooms, the Texas Auto Body Trade Show will feature exhibits from industryleading vendors that are committed to helping repair professionals thrive and build stronger businesses in 2021 and beyond. As a treat to attendees, AkzoNobel has confirmed that it will be bringing in the legendary Dave Kindig, best known from the hit TV show Bitchin’ Rides, for a special guest appearance and autograph session on September 17! More updates on this and other exhibitor-related activities will be featured in next month’s Texas Automotive. After months of being away, ABAT is anxious to shake off the “Zoom Gloom” of the pandemic and hit the Irving Convention Center to celebrate everything that’s great about the Texas automotive industry. Make your plans now to be a part of the event we’ve all been waiting for! Registration information and more is available at abat.us/events/2021tradeshow. TXA
15 JULY 2021 Texas Automotive
Ask The Expert
by Robert L. McDorman
How Can a Diminished Value Claim Help a Consumer? Dear Mr. McDorman:
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 25 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 handson 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-ofthe-art, comprehensive, accurate, unbiased and up-to-date 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.
It’s Greg Luther at Helman Collision Center. A few months back, we referred a client, Steve Huggins, to you who had a 2019 Ford F-350. The claim started as a GEICO claim, but due to a policy limit issue, he had to file one with his own carrier, State Farm. We have completed the repair, and our final invoice was $45,318.81. In the May 2021 Texas Automotive Consumer’s Voice article entitled “A Nightmare Made Worse: A Former State Farm Insured Tells All,” he explained his frustration with his insurer throughout the claim process. Can you explain to the readers how he was ultimately made whole for a safe and proper repair? Also, he mentioned he would be seeking a diminished value claim. Can you explain to me and the readers how he was able to seek diminished value through his carrier? What was the outcome of that diminished value claim? Thank you for your question, and we appreciate the referral of your clients. When you first referred Mr. Huggins to us, State Farm had issued a repair estimate for $3,858.06 after first performing a virtual estimate of around $2,000. After several supplements and many discussions, State Farm finally agreed to your final repair plan of $45,318.81 to return the truck to its pre-loss condition. Fortunately for him, State Farm did ultimately approve the Helfman proper repair plan with no out-of-pocket expense other than his applicable deductible. Many times per month when State Farm clients come to us, we see this is not the case. As I’ve previously written about, State Farm’s policy has limited the Right to Appraisal to actual cash value disputes only.
Reading the May Consumer’s Voice piece, we clearly can see the absolute harm to the insured when the Right to Appraisal is limited to only certain elements of the covered loss. Mr. Huggins’ date of loss was September 19, 2020. Before he was finally referred to Helfman Collision Center on or about December 8, 2020, four different collision facilities had inspected the truck and issued repair estimates ranging from $2,000 to $3,800. Mr. Huggins first spoke to us on Wednesday, December 16 and retained our services the following day. His repair was not completed until the week of February 15, 2021. If State Farm had not removed the Right to Appraisal from their policy to dispute repair procedures, he could have invoked this right in contest of the loss and immediately turned the claim over to an experienced independent appraiser. This would have saved him from going through the many hardships he wrote about, including suffering the nearly five-month time span from the date of loss until the repair was finally completed. Mr. Huggins’ case is nothing new for us and is only one of many examples of atrocities resulting from the carrier removing the Right to Appraisal for repair losses. As I have documented time and time again, a motor vehicle policy with limited or restricted appraisal rights leaves continued on pg. 18
16 JULY 2021 Texas Automotive
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Ask The Expert continued from pg. 16
insureds facing similar frustrating situations (such as this claim) more times than not. The biased, manipulative and overly profit-minded insurance carrier should never be given the absolute right over the liquidity of the insured’s loss. Protection of the party’s appraisal rights should be mandatory on all elements of the covered loss. As for Mr. Huggins being able to file an inherent diminished value claim with State Farm, most carriers in Texas do recognize inherent diminished value claims when the insured files the claim under the underinsured/uninsured motorist side of their policy. He had such coverage; however, toward the end of the repair procedure dispute, State Farm sent him a letter stating it would hold off on subrogation with GEICO until we settled the inherent diminished value claim. Shortly after we filed our inherent diminished value claim with GEICO on March 19, it notified us that it would not recognize this claim due to State Farm’s subrogation rights. After several discussions with GEICO and State Farm on March 29, we filed the inherent diminished value claim with State Farm for $9,700. State Farm agreed with our inherent diminished value loss valuation and subsequently paid.
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The underindemnification in total loss and repair procedure claims in Texas is rampant. In further support of this editorial and the absolute critical need for the Right to Appraisal to encompass every element of the covered loss, I would like to share a statement that I recently provided to Chairman Oliverson of the Texas House Insurance Committee. I had provided the Committee several years of documented evidence of the alarming degree of under-indemnification in repair procedure claims in Texas, and I concluded with the following: “Approval of House Bill 2534 [to require the Right to Appraisal in all Texas auto policies] would detour this type of under-indemnification and potentially unsafe discounted repair plans issued by the inexperienced insurance appraiser. Please note, State Farm has restricted its insureds from invoking the Right to 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 on repair dispute loss types does not include State Farm insureds who have disputes over the repair methodology used by State Farm. Approval of House Bill 2534 would require State Farm’s policy to allow the parties to invoke the Right to Appraisal when a loss dispute arises over the repair methodology of the covered vehicle.” The under-indemnification in total loss and repair procedure claims in Texas is rampant. Besides the higher settlements for total loss clients averaging 28 percent above the carrier’s undisputed loss statement, we have also reduced clients’ out-of-pocket expenses by an average of 90 percent on repair procedure disputes such as the example provided here. These under-indemnification percentages are staggering and harmful to Texas citizens.
But don’t just take our word for it... CALL 636-734-5470 EMAIL ryan@the300advantage.com To learn more! 18 JULY 2021 Texas Automotive
Sincerely, Robert L. McDorman TXA
19 JULY 2021 Texas Automotive
JUST FOR FUN
by Alana Bonillo
What’s the Most Memorable Job You’ve Ever Had? Whether they’ve been in the auto body business a few years or a few decades, every repairer has that one job – or that one vehicle – that was so memorable, they will never forget it no matter what!
Looking back at his former body shop managing days, ABAT Treasurer and Paint Works Business Development Manager David Osburn will never forget an owner of the Chevrolet Corvette ZR-1 telling him to test drive it the way he would – racecar style. ABAT Board member Larry Cernosek (Deer Park Paint & Body; Pasadena) will never forget the 1975 Chevrolet Caprice Classic Convertible that wound up putting his shop on the map by way of being featured in a national engine manufacturing company’s annual calendar. Back in 2010, Cernosek restored and repaired the Caprice owned by his children’s elementary school principal, Robert Garcia, PhD. The car had been used in parades and other events over the years. When its motor went out, Cernosek was called on to restore the entire vehicle, which included putting on a new top, repainting it and putting in a new motor. That is where Jasper Engines and Transmissions came in. The company approached Cernosek about featuring the vehicle in its annual calendar. He got permission from the owner, and soon the image of the restored vehicle and the name of his shop were gracing the walls of offices all around the country. Aside from never forgetting the vehicle and its repairs, he’ll always remember the reaction his shop received from being featured in the calendar. “We got so much business off that,” he says. “We got calls from outside of Texas wanting us to do jobs.” Some were even willing to ship their cars to his shop, but he didn’t have the operation set up to handle work on that big of a scale. Although it was more than a decade ago, a photo of the car still hangs on his office wall today. Photo by Larry Cernosek
“The owner of the vehicle said to me, ‘I want you to drive it like I drive it and test it out before y’all call me
and tell me the car is ready, because I don’t want any rattles or squeaks or anything.’ So, he explained to me how he drove it. I said, ‘There isn’t anywhere around here I can legally drive that car that fast.’ He said, ‘I don’t care. I want you to drive it like I drive it and make sure that it’s perfect before y’all call me.’”
For ABAT Board member Kevin Ellison (Westway Ford; Irving), the first thing that came to his mind when asked about his most memorable job involves putting the back of a Ford pick-up truck back together. Now, that may not sound like an unusual job at all, but it was the circumstances that led this Ford truck to his shop that makes it so memorable. The vehicle was not involved in a collision or any Act of God; it had been torn apart to free the arm of a little three-yearold girl! Ellison says the vehicle owner had put his young daughter in the back of the pick-up as a sort of playpen while he worked out in his front yard. “Somehow, she managed to get her hand stuck down in one of the holes in the top of the bedside and couldn’t get it out […] They wound up having to call the fire department, and they literally had to cut the back of that truck apart piece by piece just to free his daughter’s arm.”
So, what did Osburn do? “I took it out and acted like an idiot on the highway,” he says with a chuckle.
If you have any memorable stories you’d like to share with Texas Automotive, contact Editorial Director Joel Gausten at joel@grecopublishing.com. 20 JULY 2021 Texas Automotive
21 JULY 2021 Texas Automotive
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