How do direct repair programs work?

Submitted by AutoBody by Jake on Thu, 01/17/2008 - 14:36

Thought it best to start a new topic. Maybe there's people out there that have questions about DRP's and the shops that become one.

I've got quite a bit of experience with the direct repair program process and it's ups and downs, yes. There's a fair bit that goes on behind the scenes, and that's where I see some headaches.

Do you have any experience with them where you are? What do you think of them?

Posted: 18 Jan 2008 01:16 Post Subject:

Do you have any experience with them where you are? What do you think of them?

Oh yes, tons...I'm currently a direct repair program rep for a large insurance company...I've also been a shop manager (for a large shop) and have been on that side as well...

Like all things in life there are good ones and bad ones....I think it's always important to remember that as the vehicle owner you have the choice where to repair your vehicle...Are there 'perks' associated with using a drp darn right there are....are they ALWAYS the best choice, maybe not....with most direct repair programs, the shops have to meet certain standards, both with their equipment, insurance, and tech certifications...Most important to the consumer would be that the repairs are backed not only by the shop it's self but generally also by the carrier...Which is a hard thing to find...what other industry backs (in writing) another person/businesses work?

Posted: 19 Jan 2008 06:31 Post Subject:

Most important to the consumer would be that the repairs are backed not only by the shop it's self but generally also by the carrier...



Yeah, that's remained the greatest concern for any customer. I feel butterflies in my stomach whenever my car walks into a body shop for repairs. And i experience lack of sleep during the phase. I normally prefers the direct repair programs, because i don't have to take the pain of monitoring the repair works day in and day out. But I've also seen some of friends to feel comfortable going to their chosen body shops because they simply don't trust the enlisted repairers.

Posted: 19 Jan 2008 06:53 Post Subject:

Well I've experienced that the adjuster exerts some kind of pressure to enroll the customers under the direct repair program. And that makes me uneasy and skeptical about their true intention.

The body shops, under the direct repair programs are required to fix the car as cheaply as possible to save money for the insurer. The insurer and the body shops definite go hand in hand to low ball your claim and fix your car with below standard parts. What are my options if I feel that they are deliberately devaluing my claim ? The adjuster is definitely going to stick to the quote given by the bodyshop. :?

Posted: 19 Jan 2008 01:55 Post Subject:

Let me see if I can clear up a few things re: Direct repair programs

CarlosPererra----

And i experience lack of sleep during the phase. I normally prefers the DRPs, because i don't have to take the pain of monitoring the repair works day in and day out

Sorry you lose sleep over vehicle repair first of all, although it's a pain in anyone's butt when their vehicle is out of service and being repaired...you make a valid point in that it is not your responsiblity rather the adjusters to monitor the repair and keep it on track in a direct repair program (or should be :roll: ) thus removing this burden from you.

But I've also seen some of friends to feel comfortable going to their chosen body shops because they simply don't trust the enlisted repairers.

I heard this all the time, and if a person has another shop they prefer then that's fine, and they should certainly use the shop of their choice but to refuse one simply because it is a DRP I think is foolish. And in many cases they are cutting off their nose to spite their own faces...(if that's the only reason)..You should understand as well that the DRP shops have to meet pretty high standards...thus eliminating 'not so good' shops in some cases...(not all mind you, some companies will only allow a certain number of shops in an area, and I'm not saying in any way shape or form that if a shop isn't a DRP then they are a bad shop...so don't go there please... :wink: just that the DRP's go thru many steps-generally-to be considered a DRP)


Now, Aurther---

Well I've experienced that the adjuster exerts some kind of pressure to enroll the customers under the direct repair program. And that makes me uneasy and skeptical about their true intention

I can see how that could make you uneasy, and there is some pressure, but let me see if I can tell you what it truly is...rather than simple non-fact based assumptions and wide ranging allegations on your part...

First most companys that have DRP's their adjusters are to refer a certain percentage to these shops for alot of reasons, and one is cost BUT NOT THE WAY YOU ARE THINKING...it lowers the COST OF THE CLAIMS HANDLING...NOT NECESARILY THE COST OF THE REPAIR...allow me to explain...if you go to a DRP (depends on the company and how their programs are run, but this will be pretty darn close for all of them)...Let's assume this is the way the drp runs (most are this way, the company I work for however is not, and I'll explain that in a minute)....The vehicle is referred to the DRP...the shop (not an adjuster) writes the estimate and photos the vehicle, and either uploads it for approval or begins repairs...now, the company has already saved a couple of hundred dollars, by the shop doing this rather than an adjuster going out and doing it...The DRP shop is supposed to put these vehicles at the top of the repair list, meaning these cars are fixed first....now we've saved several hundred more dollars (presumeably) in rental car bills...The car after it's repaired has a problem...the ower goes back to the DRP and the shop resolves the issue, either gets authorization from the ins carrier or just does it...again, several hundred more dollars saved because the adjuster didnt' have to go back out..or hire and monitor an independent appraiser to do the same see? And if an independent is called in now, you have to add their fee to the claim.... Now mulitply that by thousands and thousands of claims...how much of a savings is that?

Now why does the adjuster want you to use the DRP so bad? As I said they are supposed to refer a certain percentage, (part of their goals) also (and this is the MAIN REASON I assure you)...because then the adjuster gets out of A LOT OF WORK! Once it's referred then either the DRP rep or the shop handles the rest! That is a no-brainer (I don't care who or what industry your in)...if the owner chooses a non-drp then the adjuster either has to go inspect and photo the vehicle write an estimate negotiate it with the shop go back to the shop if there is a supplement, then go back again if there is a re-work issue....does that make more sense?


The body shops, under the DR programs are required to fix the car as cheaply as possible to save money for the insurer

This ''might'' be true in a small percentage, but I would say that this is an uninformed statement without any proof to back it up..or if you do have proof, put it forth....All insurance companies have guidelines re: vehicle repair, and they are going to write or pay to repair that car the same at a DRP or non-DRP shop...and do you really think that all shops are crooks? The DRP shops are typcially top of the line shops, with great buisness ethics...Do you really think they are going to repair your vehicle to subpar standards? I'm not going to say that there may not be a dispute from time to time regarding a particular operation, there are, but there are in all shops.......frankly I think this is a bigger slap in the face of the shops than the insurer..do you really think there are that many shop out there that would sign up for a drp ''requiring'' them to fix cars the cheapest way possible, (the inferance you have made of course is sub-standard work, they are of course 'required' to repair it the most cost effect means, but wouldn't you require the same if you were paying the bill?)..

Some DRP shops give carriers a lower labor rate, or parts discount (the co i work for there is none), but that still doesn't mean the repairs are not completely properly...just because the bottom line is lower than ''billy bob's body shop'' down the street doesn't mean billy bob didn't inflate his sheet does it?


The insurer and the body shops definite go hand in hand to lowball your claim and fix your car with below standard parts.



Such a bold statement, prove it!!!!!!...again you are calling all shops (and carriers) crooks.....and I take personal offense at this statement...I NEVER have 'lowballed' a repair in my life...do I write after market, used, or reman parts to repair some vehicles if it meets the guideline, of course...do you buy/use generic medication or do you pay top dollar for OEM? Do you always buy name brand everything? Or the store brand if it's just as good? A/m parts have come a long long way in the past 20 years...and frankly CAPA certified parts (which are the only ones my company and I think all companies will use-and all companys have guidelines and restrictions regarding their use) carry a longer warranty that oem! You need to do some research before you make such statements and paint two entire industrys with one paint brush!


What are my options if I feel that they are deliberately devaluing my claim ?

Are you fixing the car? If you are what difference does the final cost make as long as it is fixed properly? explain that! I promise you that all shops are using the EXACT same parts...if you find a shop that tells you they NEVER use a/m, reman, or lkq/used parts..you've found a shop that is lying to you....

The adjuster is definitely going to stick to the quote given by the bodyshop.

That's not true either! For one think I am a drp rep-for an insurance company I WRITE ALL THE ESTIMATES....NOT THE BODY SHOP!

Your response with data/proof to back up your statement are greatly anticipated.

Posted: 20 Jan 2008 02:32 Post Subject:

If I had one in my area, I would use it, just because the insurance company would be really familiar with them too and I would trust that they would work together to get my vehicle back on the road as soon as possible, I did not understand the term at first, but I get it now, It just makes sense to use them if they are in the area. But of course it is always good to have the choice of where to go.

Posted: 21 Jan 2008 01:34 Post Subject:

Insurance companies try to steer(which is illegal) their customers to DRP shops because the company will save money if you go to that shop. They save money because they convince the shop that if they give them a discount on everything they will make up for it in volume. There are many, many things that the insurer whats from the shop, even the shop to pay tow bills and rentals. Insurers have basically ruined the collision business with DRP programs. They went from being a easy, convenient option for customers to being a way for insurers to totaly control a repair. The collision business has been invaded so badly by insurers that if a shop does not have a few Direct repair programs they stand little chance of staying in business. If they have no DRP's most work will be steered away from them anyway when the customer turns their claim in. It makes me sick that companies who lie and cheat anyone possible have ruined what used to be a good well paying profesion. The average NY autobody hourly rate is $44. This is absolutely ridiculous in todays world and what things cost. A spray booth is $60,000-$80,000, a frame machine with a measuring system is $40,000, basecoat is at least $30 a pint, clear is $100-$200 a gallon, a box of sand paper is $75 dollars, pay your staff, insurance, rent, all other utilities and that $44 a hour does not go too far. Not to mention that your techs have at least $10,000 in their own tools, but they haven't gotten a raise in 5 years because the labor rate hasn't gone up. What happens if you tell a insurer your rates are now $55? You get told some one down the street only charges $44 and they won't pay that rate. Collision techs are making less money now then they did 20 years ago. So next time all you people are cutting time off some guys estimate and telling him this is included and we don't pay for this or that, look at his toolbox that costs more than your company car and think about why this innocent guy gets screwed on every job, because of you and your companies policies. Also, what gives a adjuster who has never repaired a car in his life the right to tell some one who has years and years of experience and training how to repair something and how long it takes. Nothing, he has no right at all. I don't care how many ICAR classes you take if you have never done the work you don't tell me how to do my job.

Posted: 21 Jan 2008 02:21 Post Subject:

Insurance companies try to steer(which is illegal) their customers to DRP shops because the company will save money if you go to that shop. They save money because they convince the shop that if they give them a discount on everything they will make up for it in volume.



I can't speak for all companies, but I can speak in general for one company. This company recommends a direct repair program shop but if the customer mentions another shop they'd like to use, then the direct repair program is no longer pushed. Steering IS illegal, you are right, and we don't practice it. The direct repair program shops are setup for customer convenience, where a customer can get in and get an estimate written right away, put them in a rental if needed, and get the repairs underway.

There are many, many things that the insurer whats from the shop, even the shop to pay tow bills and rentals. Insurers have basically ruined the collision business with DRP programs. They went from being a easy, convenient option for customers to being a way for insurers to totaly control a repair.



You cannot paint all insurance companies with one brush, as much as this topic is very volatile. There are a lot of insurance companies that do not request any discounts, they pay their own tow bills and they pay their own rentals. This would be like saying all body shops are going to rip a customer off. You know as well as I do that that is not true. And neither is the fact that all insurance companies are out to ruin all body shops.

The collision business has been invaded so badly by insurers that if a shop does not have a few DRP's they stand little chance of staying in business. If they have no DRP's most work will be steered away from them anyway when the customer turns their claim in. It makes me sick that companies who lie and cheat anyone possible have ruined what used to be a good well paying profesion.



I know several shops that do not have any Direct repair programs and they do very well. They are in a market where there is a lot of work though. And guess who pays the bill on the repairs? The insurance company. As far as good well paying profession, it still is. I work with many million dollar+ shops. If there was no money left in the industry, then where are these guys making a profit?

The average NY autobody hourly rate is $44. This is absolutely ridiculous in todays world and what things cost. A spray booth is $60,000-$80,000, a frame machine with a measuring system is $40,000, basecoat is at least $30 a pint, clear is $100-$200 a gallon, a box of sand paper is $75 dollars, pay your staff, insurance, rent, all other utilities and that $44 a hour does not go too far. Not to mention that your techs have at least $10,000 in their own tools, but they haven't gotten a raise in 5 years because the labor rate hasn't gone up. What happens if you tell a insurer your rates are now $55? You get told some one down the street only charges $44 and they won't pay that rate. Collision techs are making less money now then they did 20 years ago.



I feel your pain here. I haven't had a decent raise in years either. The insurance companies are making billions of dollars a year, and getting tight everywhere. Bonuses? Ha! Wish I knew what that was. With that being said, it isn't the insurance company that sets the rates. It's the auto body shops. If you look at some states compared to others, where the metropolitan area is not as big as others, yet they make more, it is because the body shops in that state copied one another and raised prices across the board.

If you feel that that labor rate is not fair, correct me if I am wrong, but is there not a way all the body shops in that region can do the same thing by raising prices across the board? If Joe Doe has a shop in Podunk and charges $42, but Mike Blank in Metroville charges $48, then someone needs to change! Because unless Podunk raises it's prices, when the insurance company does its survey, the insurance company is going to average those two shops and whammo! Your're stuck in the middle.

So next time all you people are cutting time off some guys estimate and telling him this is included and we don't pay for this or that, look at his toolbox that costs more than your company car and think about why this innocent guy gets screwed on every job, because of you and your companies policies.



First of all, we don't look at the guy's toolbox. We don't look at the car he drives or whether or not he lives in a half million home. We write the estimate per the estimating systems. Some things are included and others aren't. It's your job to show the tech what is included, instead of blaming the insurance company all the time. If it is not an included operation and you can show this to the adjuster then he's going to allow it. If he is not allowing it, he is doing himself and the insurance company a disservice because it's his job to bring the car back to pre-loss condition.

On the flip side, I know there are insurance companies that have outlandish objectives for their DRPs to make where a shop will feel that they are being squeezed.

Also, what gives a adjuster who has never repaired a car in his life the right to tell someone who has years and years of experience and training how to repair something and how long it takes. Nothing, he has no right at all. I don't care how many ICAR classes you take if you have never done the work you don't tell me how to do my job.



In the same respect, what gives the body shop estimator the right to write an estimate when he has never repaired a car? I've seen shop estimators that have never turned a wrench, never repaired a car and yet they are writing sheets on vehicles. Where are their qualifications? How can this particular person relate to the tech and know whether or not the tech is telling the truth.

Yes, I will agree with you that there are insurance adjusters who should not be out in the field writing but it works both ways.

Posted: 21 Jan 2008 02:23 Post Subject:

Let me see if I can clear up a few things re: DRP's...



Lori, just wanted to say fantastic answer! I wish I had something to add to it!

Posted: 21 Jan 2008 02:52 Post Subject:

I know there are a few good companies out there. State Farm is about the only company I have some respect for. I have had just about every company try to stick it to me one time or another. The company that really gets to me is Progressive and the companies that hire ex Progressive staff to learn their slimy ways. I personally was insured with them and had to file a claim. It was the biggest nightmare I ever dealt with. I have been around this both business' my whole life. I have seen companies do things that are just plain wrong and even illegal. You can act like it doesn't happen, and be a company man, but we both know what really goes on. Why do most companies want preliminary estimates as low as possible and everything supplemented. Because there is a chance that the customer will take the check and not repair the damage, thus short changing the customer. What about this USAA estimate I have sitting right next to me. '07 Mazda 3, bumper cracked needs replacement, adjuster deducted 1 hour from paint time for UPD scratches on opposite side of damage that was claimed. This bumper was damaged from the accident beyond repair and needs to be replaced, so why does it even matter if the other side had a scratch. Maybe we should just paint the new bumper drag it across the floor, and tell the customer thats the way it looked before the accident. I bet they would be happy with that. I can see deducting paint time on a repair panel for UPD, but not a replacement. I I don't have to worry about being fired from a insurance company so I do whatever I can to let people know how crooked the inusrance business is. There are some estimators that have never fixed a car, but most are guys that just wanted to get off the floor. A good shop wants a writer who knows what to do and how to get paid for everything.

Posted: 21 Jan 2008 06:58 Post Subject:

Hi, I meant no offense Lori, what I said is the general idea. You as an adjuster yourself may know the story behind the screen…………..but common people (like me) don't understand all this intricacies. I know about people, who are expressing their rues over the work done by the body shops. Well, that may be only few instances (accepting your view that it is not the normal practice :) ) . You personally might not have lowballed any claim in your entire life …..but it's unfortunate that not all the professionals are like you.

Insurance companies try to steer(which is illegal) their customers to DRP shops because the company will save money if you go to that shop. They save money because they convince the shop that if they give them a discount on everything they will make up for it in volume.



Well, it seems that I'm not the only one who has something to say against a direct repair program and I guess I preserve the right to have my own opinion. :D

Posted: 21 Jan 2008 07:02 Post Subject:

What are my options if I feel that they are deliberately devaluing my claim ?
Are you fixing the car? If you are what difference does the final cost make as long as it is fixed properly?



No! just inquisitive to know about my options :) You never know when you are required to encounter with such situations. :) My insurance rate is already pretty high because of my age and an accident is the last thing that I want in the coming three years (at least).

Posted: 21 Jan 2008 01:00 Post Subject:

Hi, I meant no offense Lori, what I said is the general idea.

No offense at all taken by your remarks Aurther...I could tell you were seaching information which I tried to explain to you....no worries, I understood immediately the HUGE difference in yours and Bodybyfischer..

You personally might not have lowballed any claim in your entire life …..but it's unfortunate that not all the professionals are like you.

agreed...just as it is not all body shops that deliver vehicles back to the owners with subpar work on their part, runs, dirt, fisheyes in the paint, washers and shims to level up panels, filler and paint on frame rails,...delivering vehicles after dark, hiding from customers when they have legitmate complaints regarding workmenship...

Well, it seems that I'm not the only one who has something to say against the drp programs and I guess I preserve the right to have my own opinion.

You do indeed, I just ask that it be an educated informed opinion and not one based on unsubstantiated rantings..with zero documentation to back it up....that's all....oh, and that we don't sterotype an entire industry...I mean truthfully, (not saying you did), isn't that ALWAYS a statement of ignorance?


Steering is illegal, no argument here, but so is price fixing, charging for things/repairs that have not been completed, doctoring invoices, etc.!

It is not steering to give a person all the information and let them make their own EDUCATED decision....

They save money because they convince the shop that if they give them a discount on everything they will make up for it in volume. There are many, many things that the insurer whats from the shop, even the shop to pay tow bills and rentals

I wish you could learn to use the words, 'some' all companies don't do this...the one I work for (for instance and certainly not the only ones!) do not have any discounts, certainly pay the tows and rentals...unless of course a shop drops the ball and due to their own negligence or shotty repairs a vehicle has to come back for re-work then the shop may be on the hook for the rental, but shouldn't they?

Insurers have basically ruined the collision business with Direct repair programs

Another hysterical statement...they have also made many many more shops rich!

insurers to totaly control a repair

And shouldn't they to some degree? Who's paying the bill? If there was no control, and you must admit this is right, there are shops out there that would be charging ten hours on a two hour dent...or replacing a bumper cover for 600 bucks that has a scratch....

The collision business has been invaded so badly by insurers

again this is so funny...who is paying ALL OF YOUR BILLS? How many (percentage wise) customer pays do you do?

It makes me sick that companies who lie and cheat anyone possible have ruined what used to be a good well paying profesion


I'm sorry if your shop isn't doing well..sounds like you are in a huge market, and clearly have trouble getting along, so that would have a lot to do with your income I'm sure..But here in the midwest, the 'average' body tech makes more than 60k per year....and the larger shops over 100k...no problem here...it's still a good paying profession...

The average NY autobody hourly rate is $44

Apparently you are in a flooded market, because the rates in the midwest are 46, and getting ready to move again.....who's fault is this? It's the market you're in! geeeeeeeeeeze is that so hard to see? Some areas are still as low as 28.00 why? Talk with your fellow body shop owners for that question, they are the ones cutting your throat not the carriers. you said it yourself...

You get told some one down the street only charges $44

And if they quality is near the same, what do you think the average Joe would do if there were no insurance payments and he is paying out of his own pocket? I'll tell you, you would have zero work...

Also, what gives a adjuster who has never repaired a car in his life the right to tell some one who has years and years of experience and training how to repair something and how long it takes

You don't have to be a chicken to know a bad egg when you see it....fyi, I was both a tech and body shop manager for a very large shop for several years, so 'I" do know what I'm talking about....

telling him this is included and we don't pay for this or that, look at his toolbox that costs more than your company car and think about why this innocent guy gets screwed on every job, because of you and your companies policies.

GEEZE, you and I both know that insurance companies don't make these rules...they are pre-set by the estimating system..which one do you use? Do you not know your own system well enough to know what is and is not an included operation? Or, if they adjuster does make the mistake, and pays you twice for an operation, I'm sure you will immediately bring this to his/her attention right?

A spray booth is $60,000-$80,000, a frame machine with a measuring system is $40,000, basecoat is at least $30 a pint, clear is $100-$200 a gallon, a box of sand paper is $75 dollars, pay your staff, insurance, rent, all other utilities

This is the cost of doing business that you chose! Period...Do I look to see how much the plumber has invested in his equipment? Or maybe the corner deli, I go back and check out his ice boxes, and stoves? Please...it's called overhead, and for those that don't know this IT IS ALL WRITTEN OFF EITHER DEPRECIATED FROM YOUR INCOME TAXES AND ON THE TECH LEVEL THEY TOO GET A DEDUCTION FOR THEIR TOOLS, IF THEY DON'T THEY NEED TO FIND A BETTER TAX PREPARER OR ACCOUNTANT!


I know there are a few good companies out there. State Farm is about the only company I have some respect for.

Ok, here's the deal, I hear this across this great country and it appears to be a regional thing...in one area the shops hate state farm, and love progressive, go a state over and it reverses...it has more to do with the way things are handled or managed in that particular area, and down to the adjuster...you ought to know that...

I have had just about every company try to stick it to me one time or another

Really? I've had about every shop I go into for the first time try and stick it to me too! Petite little gal comes in surely she don't know much, here you go, ''honey'' this car has all kinds of unibody trouble, just look at this hood gaps, we are going to need about six hours frame time'' then i ask for tram gauges, and they about puken themselves...so don't tell me that insurance companies are the only ones that do this!

I have been around this both business' my whole life.

me too....

I have seen companies do things that are just plain wrong and even illegal

again me too, and I've see shops do the same...My point is why can't you admit (as I can about shops) that they ALL DON'T...THAT NOT EVEN A HIGH PERCENTAGE DO....if you saw something 'illegal'' it was your responsibility to report it..did you?

Why do most companies want preliminary estimates as low as possible and everything supplemented.

They don't...if you are talking about an adjuster looking at a car prior to any tear down, at an owners home....or you just can't tear it down...what are we to do...''assume'' something is damaged and pay it? NOT...nor would you if you yourself were paying it...tell you what next time, you or one of your techs damages anothers vehicle in some incident that you yourself would be paying it...lets say a rear cover is hit, lets not tear it down, and pay the guy for a cover, absorber, rebar, and repair the rear body panel while we're at it....

What about this USAA estimate I have sitting right next to me. '07 Mazda 3, bumper cracked needs replacement, adjuster deducted 1 hour from paint time for UPD scratches on opposite side of damage that was claimed. This bumper was damaged from the accident beyond repair and needs to be replaced, so why does it even matter if the other side had a scratch.

This is incorrect in anyones book, and the adjuster has made a mistake, if the panel required replacement due to this loss, their should not be any betterment charged....and you should bring this to the adjusters attention...

Maybe we should just paint the new bumper drag it across the floor, and tell the customer thats the way it looked before the accident.

pretty cute analogy though, i have heard it before, it does make sense, you or the customer should talk to the adjuster or his/her supervisor regarding this particular case...come on, you make no mistakes? and besides that if he were charging betterment it shouldn't just be on the refinish side, he should've charged some repair time as well.....

I don't have to worry about being fired from a insurance company so I do whatever I can to let people know how crooked the inusrance business is

And you should if there is a particular problem, but i'd be mighty careful if I were you when you generalize like this...

There are some estimators that have never fixed a car, but most are guys that just wanted to get off the floor. A good shop wants a writer who knows what to do and how to get paid for everything.

that they do! and not to be paid for things they don't do right?

What about the shops that charge (for instance) to detrim a door, and I make an unannounced drop in the vehicle is in the booth, or just been sprayed and the idiots taped everything off? huh? what about them? Is this not lying and theiving? of course it is...but I"M NOT MAINTAINING THAT ALL SHOPS ARE THAT WAY! But there are some that are...I suppose you are going to say that's it's ok, since the big bad ins company ALWAYS screws the poor body shop right? Two wrongs make a right? If that is your stance that is unethical and you know it.....You are owed for what you do, and no more!

All I would like to see you admit, is that there are some/many damn good adjusters out there, that pay a fair price for the work the shop does. I'm sorry but, if you can only find one company in the entire state of NY that you can get along with, this has to be a problem with you, and your shop...think about it....can everyone always be wrong and you are right? Can EVERYONE be a crook but you? Frankly with statefarms new drp guidelines I'm surprised you get along with them, or maybe it hasn't made it to you yet....I think their coming in and going thru all your claims to make sure you are giving them the lowest rate is unethical, but you get along with them.....interesting.....

For the record, I would jump to the defense of your industry (or any other for that matter) were these broad rangeing stereotypcial remarks made against it as well....why not just say ALL GREEN EYED PEOPLE ARE CROOKS!...... makes about as much sense, and yes, I have green eyes.........

Lori, just wanted to say fantastic answer! I wish I had something to add to it!

Thanks Jake, you did and I appreciate it...this one sided non-sense is ridiculous...

Posted: 21 Jan 2008 05:49 Post Subject:

I know there are a few good companies out there.


You must have missed this sentence. Go back and read it again. I never said ALL adjusters were crooks or EVERY company was. Just like when MOST adjusters read a supplement they read what THEY want to read and ignore the rest. Just to let you people know my father is a adjuster and has been for thirty years. I know alot of adjusters his age who are honest guys, and work with shops. I see you like to put words in my mouth so I'll specify the kind of adjusters I refer to. The people that Progressive and the Progressive wanna be companies that hire people straight out of college with no background in any automotive field, they then send them to a few weeks training and then they are out in the field writing half ass estimate. I know a Progressive adjuster who's only job was working in a Thom McCann shoe store prior to working at Progressive. Jake and Lori you are obviously offended when true facts are stated. I'm also not so ignorant that I do not know there are hack shops doing things wrong. Keep denying my facts if it makes you happy. Should I post some Pics to defend myself?

Posted: 21 Jan 2008 06:18 Post Subject:

Jake and Lori you are obviously offended when true facts are stated



Woah there tiger. Back up a second. Point out where I was offended by the statement of a "true" fact? I'm not offended in the least.

Now I AM passionate about this business, from all angles, as I have replied. Don't mistake my passion for being offended. :) I don't know you, I can't possibly be offended by our discussion unless of course you called me some inappropriate name. :D Your father and I might see eye to eye, and I prefer to think of myself as an honest guy too and I do my best to work with all my shops. Heck, I'm probably the same age as your dad, how old is he? :)

Lori and I also seem to be cut from the same thread and prefer to do our jobs with integrity.

Now I have not had a chance to answer your other posts, and am in the middle of my work day, but later this evening when I've had a chance to relax from the cold, I'll digest what has been said in this thread so far and attempt to be as objective as possible. Which up to now, I believe I have been.

Posted: 22 Jan 2008 03:07 Post Subject:

I guess it is ultimately up to the customer and the customer will have to do the research to make an informed choice. I know around where I live there are a few shops that have really good reputations and that is where pretty much everyone goes, I don't know if they are a DRP or not, I know they are getting really good word of mouth advertising out here in deer country.

Posted: 22 Jan 2008 11:54 Post Subject:

I never said ALL adjusters were crooks or EVERY company was.

These statement you've made seem to differ.....

I know there are a few good companies out there.

I didn't miss this, then you followed it with

State Farm is about the only company I have some respect for. I have had just about every company try to stick it to me one time or another

Dad work for State Farm does he? You have clearly stated that with the apparent sole exception of state farm

I do whatever I can to let people know how crooked the inusrance business is


It makes me sick that companies who lie and cheat anyone


And apparently clearly you have the biggest trouble with Progressive...

The company that really gets to me is Progressive and the companies that hire ex Progressive staff to learn their slimy ways

I'll specify the kind of adjusters I refer to. The people that Progressive and the Progressive wanna be companies that hire people straight out of college

So that I am not putting words in your mouth are you saying that ALL adjusters that work for progressive, are ''slimy'' ?

The people that Progressive and the Progressive wanna be companies that hire people straight out of college with no background in any automotive field, they then send them to a few weeks training and then they are out in the field writing half ass estimate. I know a Progressive adjuster who's only job was working in a Thom McCann shoe store prior to working at Progressive

Do you think that Progressive is the only company that hires kids out of college, or that worked in a shoe store prior to coming to work for them? This is silly....what did anyone working in your shop do prior to working for you? Do you really think that all body techs have ALWAYS worked in the autobody repair field? Do you not hire young people starting out in life, and train them? What did your dad do prior to being an adjuster? Do you think all airplane pilots for example worked for only airlines? Seriously that statement does no good for your argument, people change fields/professions all the time, did you work while in school? I don't understand what on earth that statement has to do with this AT ALL! So what? Let's see I too worked at Thom McAn (in about 1975 or 76), I've also worked at a battery factory, owned and operated a bait and tackle shop, trained dogs, was a life guard, I'm an old broad so I could go on and on...so what? I see no point here...

Jake and Lori you are obviously offended when true facts are stated

I have no problem, nor am I offended when true facts are stated...I am however, offended when you label an entire industry this way....I agree whole heartedly that there are bad adjusters and companies out there, but I do not think that it is the majority as you state, (you even only have ''some'' respect for ONE)

Keep denying my facts if it makes you happy.

What ''facts'' are we denying?

Should I post some Pics to defend myself?

Against what? Slimy, lying adjusters like Jake and I? You know I've got just as many of crappy body work...so what? What photo's do you think will prove your point? Let me remind you what your point was:

You didn't address one point that I or Jake made, you just keep throwing random examples out there...none of which are proving your point that:

they convince the shop that if they give them a discount on everything

Insurers have basically ruined the collision business with DRP programs.

Collision techs are making less money now then they did 20 years ago.

I have seen companies do things that are just plain wrong and even illegal



Look, all I would like to see you say (and you have kind of with this statement FINALLY),

I know alot of adjusters his age who are honest guys, and work with shops.

Do 'chick' adjusters figure into that too? :roll: And must they be of a ''certain'' age? You'd be hard pressed to find one single shop within a 100 miles sweep of my town that would say one disparaging word against me or my ablility. All I'd like to see from you is to admit that there are many (majority) damn good adjusters out there...we are not all crooks, and liars, most are good hard working people that want to complete their jobs with integrity and an honest work ethic....that's all, oh, and stay on track.

Honestly, although I don't mind the back and forth, I have to wonder, with your clear contempt for insurance companies why did you want to even come to this site? I don't want you to leave, so don't go there, I think you are a good poster...I'm just curious about your motivation?

You of course are 100% correct Erb...

I guess it is ultimately up to the customer and the customer will have to do the research to make an informed choice.



Heck, I'm probably the same age as your dad, how old is he?

:lol: Me too! or I may be older than all of you! :roll:

Posted: 23 Jan 2008 12:24 Post Subject:

Great answer again Lori. Not too much I can add to your replies.

I know that shops here have had problems with Progressive and in the state I live in, they do have the concierge program, but the shops that are on the program volunteer to be one.

I have heard of quite a few problems between the shops and Progressive more than once.

Again though, the shop can get off the Concierge program any time they feel that they are being abused. They are not required to be a Progressive Concierge shop.

Like any DRP everything is explained to the shop up front. The rules, the procedures, etc. The insurance company doesn't spring the requirements on the shop the first day they are on the program after they sign the contract. You know all this stuff right up front.

My question would be if these shops' owners are good businessmen, why would they continue to be part of a program that they are losing money on?

There was so much said in the posts I've read, that if I missed a direct question, let me know and I'll answer it.

Posted: 23 Jan 2008 10:57 Post Subject:

My question would be if these shops' owners are good businessmen, why would they continue to be part of a program that they are losing money on?

Great point! and all shops can 'stop' or 'drop' from any program of their own free will (course they can get fired too!)....

RE: Progressives Concierge program let's not forget it is a type of 'hy-bred' of a drp...and many many 'different' things associated with this unique program.

My understanding that they (progressive) still run a regular drp in many many areas as well...No problem in my area with them...As I said though you can go area to area, and find state farm or progressive is loved in one area, go a state over and they are dispised...has a lot to do with the adjusters handling the area.

Posted: 10 Feb 2008 03:09 Post Subject:

About the labor rate issue being low....What do you think would happen if the area shops would get together and decide to increase the labor rates? Price fixing! Insurance companies would try to sue or put someone in jail!

Low labor times??? Who do you think CCC, Mitchel, ect. work for? Their biggest customers are the insurance industry! They catter to the insurance industry. You can't deney that. If I was in buisness I would catter to my biggest and best customer too.

How many ex shoe salesmen start in a bodyshop, work a month, then do a structural repair on a vehicle? We who work in a bodyshop learn, but not overnight. That's why it irritates us that a pimple faced ex shoe salesmen can come into a shop and tell someone who has been working on frames for 20 years.... It doesn't need this or that.

I work for a DRP shop and I tell people all the time DON'T take it to a DRP shop. It's a conflict of interest for someone to take it to the place that is basicly footing the bill. The insurance industry has brain washed the bodyshop industry that they are the customer because they are paying. They are paying because they are legally responsible to the insured bought a policy for their vehicle to be repaired to pre-loss condition. The customer is the owner of the vehicle. How come the insurance companies want to use junk yard, aftermarket, ect? It saves them money on substandard parts! It was an OEM part on the car before the accident wasn't it? It should be afterwards too.

I make a good living in this industry but I'm getting sick of the money that I have been cheated out of. Blend with-in is the last straw for me, I'm about to do just that. With the clear not the color:) Why do techs shortcut? Why do adjuster short an estimate? To make more money! But we are the bad guys and have the bad reputation?

Posted: 10 Feb 2008 01:02 Post Subject:

Welcome painterguy to the community.....couple of things here I'd like to point out...first since you are doing this.......

I work for a DRP shop and I tell people all the time DON'T take it to a DRP shop.

I certainly understand how this is happening...

I'm getting sick of the money that I have been cheated out of.

and don't understand how you can do this....

I make a good living in this industry



About the labor rate issue being low....What do you think would happen if the area shops would get together and decide to increase the labor rates? Price fixing! Insurance companies would try to sue or put someone in jail!

Only part about this that is price fixing is this part...

area shops would get together and decide to increase the labor rates?

Just like ins. companies can't get togather and raise the rates, independently the shops can, and should..you should know that the way rates are increased (ins. wise) is through shop surveys...every year or so they do a survey..now if only 2 out of 20 are charging 50 an hour and other 18 are still at 48...what do you expect? Also if you've been in the business any length of time you and I both know that shops get together and agree on what they will 'tell'' the surveyors...happens all the time..and really I (personally) have no problem with this....

Low labor times??? Who do you think CCC, Mitchel, ect. work for? Their biggest customers are the insurance industry! They catter to the insurance industry. You can't deney that. If I was in buisness I would catter to my biggest and best customer too

I agree with you that ccc, mitchell, audatex etc largest companies are likely the insurance carriers, but I also know that they all do time studies in body shops...and more importantly send surveys to the shops...so that's your 'side' of the industry filling those out, not the ins part...really I think the bigger problem is that many reps (and body shop estimators) don't actually know how to use the systems, what's included what is not and must be added...I have to come along after other adjusters all the time, and write supplements to add certain labor operations, because they didn't take the time to check the p pages or whatever...MOST times neither did the shop! I WAY more times than not find this missing labor and add it without the shop manager even recognizing it or asking for it...so there is a lack of education on both sides...The person reading/accepting the estimate needs to have a complete understanding of the system that sheet was written on...but do they want to take the time to do it? Many times no they don't...you're right (before you say it) so should the adjuster that wrote the estimate! Most times (believe it or not) it's simply not knowing, I can tell you that if I was a shop owner/manager/whomever that goes over the estimates I would damn well know how to read one and what I might need to ask for that was overlooked...again before you go there I was a body shop manager and DID do exactly what I am preachin'.... :wink:

That's why it irritates us that a pimple faced ex shoe salesmen can come into a shop and tell someone who has been working on frames for 20 years.... It doesn't need this or that.

I'll agree with you to an extent on that statement...but again...If your shop manager had a good understanding about included operations and could enlighten/educate and show mr.pimply faced adjuster in black and white USING HIS OWN SYSTEM. Then it's a win/win...

It's a conflict of interest for someone to take it to the place that is basicly footing the bill

I'm not getting any sense out of this statement the DRP shop isn't footing the bill and that's what you have said.
I'm sure you meant it differently, so please explain..

The insurance industry has brain washed the bodyshop industry

That's not a very complimentary statement about your own industry is it?

that they are the customer because they are paying.

They are the ones footing the bill (ins carrier),

They are paying because they are legally responsible to the insured bought a policy for their vehicle to be repaired to pre-loss condition. The customer is the owner of the vehicle.

You are correct subject to the policy conditions which lay out EXACTLY how the vehicle can be repaired...as a side note (and this thrills me to pieces) some companies have now started offering an endorcement (costs more of course) for NEW OEM parts only, I wish all companies offered this..then there is no arguement ever....because although the policy clearly lays out the repair options most people don't ever read it...

Ok, you've made some errors here....

How come the insurance companies want to use junk yard, aftermarket, ect? It saves them money on substandard parts!

Yes, it saves money you are correct...so does generic prescriptions over 'oem', but I'm sure you always tell the pharmacist...'''no no, I don't want the generic for 10 bucks I want the OEM for 50 bucks instead!" come on!

It was an OEM part on the car before the accident wasn't it? It should be afterwards too.

Here's where you really messed up...what you are calling

junk yard

parts are OEM!!!! For pete's sake I'd think you'd know that!

It was an OEM part on the car before the accident wasn't it? It should be afterwards too.

Well, it is when LKQ, used or 'junk yard' parts are used, so that argument is out the window...and what it has on it before the wreck is a 2-5-8 year old part (depending on the year), and all companies I am aware of require that any LKQ part be same year (mileage on some parts) or newer...so there goes that arguement....I've been around a long long time, and I'd have agreed with you re: a/m parts years ago, but the past oh, 7 years or so they have gotten really really good, and rarely do I have a part that is what I would call 'substandard' when one surfaces, back it goes...period.......

Just another little foot note here....in the past year, all the US manufactors (parts vendors) on almost all the estimates I been writing are price matching the OEM for the shops! (selling oem parts for what I've writen the a/m price) Now, what does that tell you about their markup? Talk about stealing! If they can afford to match the prices on the a/m and still make a profit, (which they HAVE to be or wouldn't do this)....how long have they been gouging the body shops and insurance companies with ridiculous markups? If for no other reason....the aftermarket industry has put a halt to most of that! You have to agree, that is extremely fishy!

Blend with-in is the last straw for me, I'm about to do just that. With the clear not the color:)

Well, I'll agree again and you have to understand that the adjuster writing that sheet has ZERO control over these decisions...I've personally fought and fought and fought this particular fight to no avail...these decisions are made way high up by some suit in a tower that has less knowledge than your pimply faced adjuster! Partial refinish has always been an issue, and the biggest issue (which really doesn't affect you unless you're the owner) is in material cost...I can see partial refinish with FULL CLEAR, on say the front edge of a door damaged by the fender getting into it....and I think you would/should agree with the same...however it's the material on this partial that hurts the shop...I heard a rumor just last week that the company I work for (which is HUGE), is going to do away with partial refinish soon...couldn't make you any happier than it does me let me tell you!

Why do techs shortcut? Why do adjuster short an estimate? To make more money!

Depends on what you mean by a tech short cutting, a tech can endanger a life shortcutting or butchin' a repair, an adjuster cannot!

But we are the bad guys and have the bad reputation?

According to whom? You think a body shop tech has a tougher time defending their profession than an adjuster? NOT!

I've enjoyed your post, and want you to know (for what it's worth) I found it very intelligent and you got your point accross eleoquently without being personally insulting....something I wish others in your profession would also do...in lends much more credibility to your post....I'm very thankful....

Posted: 10 Feb 2008 03:53 Post Subject: Challenge to defenders

I'm going to make a simple statement: Insurance company DRP programs are undisclosed side agreements to defraud the policyholder and claimant during the settlement of their claim.

I have heard the argument from the local hack to the Chairwoman of ASA that there are " good DRP's and bad DRP's" ... OK, please name the "good DRP". Name that one "good one" and I will even supply a copy of the agreement to disect here.

We can discuss if it violates any local, state and federal laws. We can debate its' effect on the ideal of insurance code and conduct.

So how about it? give me the "good one"

Posted: 11 Feb 2008 04:34 Post Subject:

You are correct subject to the policy conditions which lay out EXACTLY how the vehicle can be repaired...


I have read every paper I have ever received from my insurance company and have never seen anything regarding parts usage and repair procedures. I get a little sick of hearing the "you signed your policy" from the insurance side. If I never got any papers in my policy mentioning non OEM parts how can you tell me it's part of my policy? I recommend that if anyone wants to argue this point they better find some documention from a policy stating what parts can be used, because I have never seen such a thing.

parts are OEM!!!! For pete's sake I'd think you'd know that!


Let me explain something, a car ends up in a salvage yard because it was totaled. Meaning it was damaged beyond repair. So this vehicle has been hit hard enough that is not repairable. When a car is in a collison the whole car takes the force of the impact, not just the damaged area. That is why we pre pull things proir to disassembly. To get the car back in tolerance and square. This doesn't happen in junkyards. Do you know how many times techs go to install a LKQ door or fender and they don't fit because they are so tweaked out of shape from when the car they came off got hit by a train. This isn't always the case but it happens alot. I love when adjusters tell the customer LKQ parts can't have any dents or damage? Why do they pay LKQ clean up then? I have yet to see a LKQ part that can be scuffed and painted. What do you think a customer would think if they saw the process of a LKQ quarter being used? From the 16 year old kid in the "junkyard" hacking the side of a car off with a gas powered demo saw, to the poor tech trying to separate the quarter from the "LKQ cut" without completely destroying it, then seeing the LKQ P.O.S on the car covered in filler because they can't be taken off without being damaged. Nothing pisses me off more then someone writing a used quarter. You don't recycle weld on panels. Have a little common sense. You can defend yourselves all you want, but if you write a LKQ quarter and honestly think it is a good repair and that is what the customer should get, you have let yourself get brainwashed by the pennypinching company you work for.
By the way Lori, my father doesn't work for State Farm and never has. I don't even like the company he works for because I hear all the "policies" they have. I know you think I hate all insurance people no matter what the facts are, but I know plenty of good adjusters, a few are even females. The problem is when a good adjuster writes a good honest estimate and works with the shop without a hassle, it seems he always has a reinspector right on his tail asking why he wrote this or why he wrote that. So I know there are good adjusters out there who are honest people, unfortunetly most of them work for companies who only care about saving as much money as possible and they get harassed for everything they do by the company.

Posted: 11 Feb 2008 12:37 Post Subject:

I'm going to make a simple statement: Insurance company DRP programs are undisclosed side agreements to defraud the policyholder and claimant during the settlement of their claim.

WOW wouldn't call that 'simple' at all, and where do you come up with the ''undisclosed'' non-sense...the owners know that the shops are on their DRP program and that an agreement exsists.......what side agreement defrauds the policyholder? Who by the way is the only one with a contract...not the claimant.....so lets get that part staight. If you are talking about the DRP conract, I've got one right in front of me, (granted they are not all the same, I can only speak of this one myself)....I doubt you've read them all...I can find nothing at all in this contract that you could even find wrong with! Explain please the ACTUAL parts of a DRP contract that you think 'defraud' the policy holder....

I have heard the argument from the local hack to the Chairwoman of ASA that there are " good DRP's and bad DRP's" ... OK, please name the "good DRP". Name that one "good one" and I will even supply a copy of the agreement to disect here.

That's awesome! You go right ahead, type in the exact agreement of the three or four top auto carriers, and let's do that...discet them...you show me where they are asking or demanding that you do anything that isn't right to fix a car! I'm from MO, ''show me''....I do agree though there are good and bad...meaning some that require of the shops (in my opinion) way too much of their time and work, from totalling cars, to AA's etc...I don't think that is a shops job, I personally think the shops job is to fix the car! PERIOD....but you all sign these agreements...you scan and post those agreements....lets see...

We can discuss if it violates any local, state and federal laws. We can debate its' effect on the ideal of insurance code and conduct

I can't see how they could violate any local, state or fed. law, and be so prevelant...seriously what laws could be violated? And surely there would be suits all over the place if there was one...meaning your ascertion about DRP agreements....really what laws?

So how about it? give me the "good one"


I think you have to understand and agree, if you have any contact with shops outside your area thru a shop group, nace, whatever, that truly it's regional as I've stated before, one area loves state farms program, the next hates it...and so on...now if in your area you cannot find one good drp program and you are a drp for all of them...hmmmmmmmm....reminds me of the kid that 'everyone hates me'....it is my understanding that their are two large companies who's drp programs, the adjuster still comes and writes the sheet, (not asking the shop to do so) they locate and verify the parts, contact owners etc, and reach an agreed price with the shop BEFORE repairs begin...they follow up with the shop and owners throughout the process etc...so this one the shop really isn't doing anything but fixing the car...which (again in my opinion) is what they should do...now what's wrong with THAT one?

I have read every paper I have ever received from my insurance company and have never seen anything regarding parts usage and repair procedures.

I'd say you've missed reading your entire policy, or maybe your state doesn't mandate it be in there I don't know what state are you in provide that information and I'll check...

I get a little sick of hearing the "you signed your policy" from the insurance side. If I never got any papers in my policy mentioning non OEM parts how can you tell me it's part of my policy? I recommend that if anyone wants to argue this point they better find some documention from a policy stating what parts can be used, because I have never seen such a thing.

Seriously regardless of what you think of me and my profession do you REALLY think I'd say something like that without proof? really? I don't just 'throw' stuff out there without knowing what I'm talking about....here you go direct from a standard Missouri auto policy form a-20.5-a:

Under Part V-auto physical damage coverage, coverage f-collision, coverage g-comprehensive coverage....ADDITIONAL AND REPLACEMENT DEFINITIONS USED IN PART V



REPAIR means, the restoration of form and function by restoring existing parts or by using REPLACEMENT PARTS if needed. Repair does not mean the restoration of pre-damage value nor does it include compensation for the diminution of value the accident caused.
REPLACEMENT PARTS means new or previously used parts, made by any manufacturer whether or not that manufacturer made the orginal part or vehicle.

Pretty clear....again, let me know your state and I'll research it for you...maybe your state doesn't require this in the policy but I sincerely doubt it...

For the sake of space I'm not copying your next paragraph...See you go straight from what I said to talking about quarter replacement! I agree with you 150% on used weld on parts...and only write same, if the vehicle would otherwise total, and the shop and owner are in total agreement to save the car.......I disagree however with your statement about other parts far from impact being damaged or not fitting ALOT...rarely have I ever had this come up...meaning a used door that looks fine, but won't fit due to the tweek the body took....you and I both know that 90% of the time, that a vehicle totals from a front end hit, and in 99.9999% of the time there is not one thing wrong with that used deck lid, bumper etc....Now I'll agree with you that there are times when a yard sends a door (mostly) decklid, fender that is just beat to crap to the shop...now when does this happen? In transit mostly...you have to understand that when I call a yard for a part it is ''supposed'' to meet a certain standard. In my area 'ins. quality' now when that part arrives if it's not, my guys call me I go and look at the part and then I get that vendor on the phone and chew his butt! Because HE not I was the one that misrepresented that part....You and I know all too well about this problem (parts/vendors etc..we could have a thread three times this long about that problem int he industry).....re: clean up, don't know how it works in your area, but I no longer pay clean up, the salvage yard takes it right off the price of the part...for instance, if I bid a door for 500 bucks (plus markup) and it comes in with 2 hours of damage on it, the shop calls the yard, and 90 bucks comes off the price of that part....If I have to get involved then I do...but only 'clean up' I pay now is again in the rare occurance I used a weld on part for cut/trim/fit.

but if you write a LKQ quarter and honestly think it is a good repair and that is what the customer should get, you have let yourself get brainwashed by the pennypinching company you work for.

I've already explained my postion on used weld on parts and the only time I use them...would my employer prefer I write used? maybe...but the 'tite' with my company is I only have to even source them if I'm also replacing the entire inner structure...another thing that I touched on earlier...so many times these adjusters and shop foremen/managers don't take the time to fully understand the systems these sheets are written in...by the time you add everything that isn't included, you generally arent' that far away from new oem...

I know you think I hate all insurance people no matter what the facts are, but I know plenty of good adjusters, a few are even females.

Glad to hear that, maybe I'm one :roll: :wink:

The problem is when a good adjuster writes a good honest estimate and works with the shop without a hassle, it seems he always has a reinspector right on his tail asking why he wrote this or why he wrote that.

FINALLY something else we can agree on! ha ha...

So I know there are good adjusters out there who are honest people, unfortunetly most of them work for companies who only care about saving as much money as possible and they get harassed for everything they do by the company.

Let's be honest about something here...I don't know if you are a tech/manager/owner, regardless, you are in business to make money...right? everyone is in business to make money....NOT at the expense of the integrity of the vehicle or worker however....Let me throw something else out here in case there is ever any question...the way I write estimates is the EXACT way I'd want one of my vehicles repaired....now, are there times when I don't agree with certain things that I have zero control over? such as partial refinish (except for my prior example) damn straight there are....but never about non-oem parts...truly..not in the last 7-9 or so years....I have never insisted that a 'bad' part be put on a car...I won't write certain parts that I know from experience aren't fitting right (yet) like most of the splash shield for example...I talk to the shop when a 'new' part pops up, or like the splash shield, 'you havin' trouble with these?' yes, ? ok, I won't use it...simply really...also my pay has absolutely nothing to do with my sheets, the cost of them the number of non-oem parts I use etc....(i just wanted to get that out there before someone brought that up too)....Also would like to say that your last few posts came across much better, I have no problem with debate, trying to see the others perspective etc...it's just when you color all with the same cloth or get personal, that I get a little ragged... :D

Posted: 11 Feb 2008 09:17 Post Subject: Being ripped off by big brother

You Insurance people amaze me. As long as you can justify everything it's all roses? Why shoul I have to work for what the hack shop down the street charges?? I have $50,000.00 worth of tools but get paid the same as the $10,000.00 guy. I have 30 years experience and have never been sued and have had less than 1% come backs always. I work on Vettes, Mercedes and $250,000.00 drag cars but I can't get payed or charge more than the back yard boy's charge.
Give it a rest with your we don't steer customers. I get steered against because I follow OEM procedures and do what I charge for and charge for what I do!!
If I sand and buff nearly every job because I want it right, you just don't pay for it!
Whatever makes you sleep at night hunny, But I don't care if your a boy, girl, blue eyes, no eyes. If you try to rip off my customers with junk parts and a short sheet we will meet in court.

Posted: 12 Feb 2008 12:54 Post Subject: on the topic of generic parts, drps, and adjusters

Lori,

I have read about four to six hours worth of your posts and advice to come to the conclusion that you really truly believe you are helping people and I believe you have a good heart with good intent. However, I believe that you are living in a Polly anna world in which you believe insurers are incapable of some of the things we are telling you we see regularly by most all insurers. If you choose to operate your business independently without coercion from the insurer to bow down to their criteria, you are a target. If all adjusters did their job with the sincereness and dedication you seem to possess, we wouldn't see the things we see and read about,
such as the "we'll pay that claim when Pigs Fly" fiasco in Colorado by one company and the recent Groebner case in Illinois where an adjuster was extorting shops so they could remain on the prefered list or drp programs.

I also live in missouri, and you'll have to show me some of those a/m generic parts that are equal to oem, because I have yet to see any. The plastic parts are definately more brittle and less pliable. Even the capa parts do not have the galvanized protection on them, nor are they always constructed with the same thickness and weight of metal or possess the correct spot welds. They never have the sharpness of distinction that a true oem part possesses. Even state farm, in the Avery vs State Farm trial, admitted in email presented that they knew that generic parts were not equivalent. This not to say that generic parts have not improved. They have improved somewhat but they don't hold a candle to the original parts.
Most shops, whether DRP or non drp, are part of the go along to get along crowd. Because it makes no difference to them and for fear of intensified steering abuse, they comply with their use but would prefer to use oem.

If I read the state statutes accurately in the Missouri Unfair Claims Practiced Code of State Regulations, it states that if an insurer prepares an estimate with the use of an alternative, aftermarket, or generic part, that it must meet the definition of like, kind, and quality and must perform as the original. In my 35 years plus of experience in owning and operating a collision business, I have yet to see any non oem part that matches this criteria made by a non oem manufacturer for external body parts useage.

I too, have been heavily steered against because of my proactive stance on educating consumers when they are being abused by both first and third party insurers. I have had customers sign affidavits that state that the regional claims manager of one of Missouri's largest insurers told her agent that the reason they did not want her to bring her vehicle to my business was because I was a crook and that they were building a case against me. A few more of these affidavits and this claims manager is toast for tortiously interfering with my business and slandering me personally. I even have this adjuster on tape telling me that I have to cost shift to match his final bill. This is not personal problem between me and this adjuster, I truly believe he has been instructed to operate in this manner.

I believe that there are still some older adjusters around that try to do the right thing, but the pressure for you guys to perform ethically is so radical that I know of two local adjuster in recent years that have had heart bypass brought on by stress of performing under the pressure exerted on them by the company.

I also wrote the post about diminished value. You make it clear that an insurer is not required to restore the value to a car, but this is in conflict with the fact that you are servicing an actual cash value policy. You still have to retore the vehicle to pre loss condition and value. You do not have to pay for any perceived loss of value, but you can not restore the vehicle in anyway that lowers the post loss value of that car.

I know you believe in loss of value or diminished value although you may feel you do not have to pay for the loss on first party claims. I say this because I read a post that you stated that you would lower the value of the total loss settlement for pre-existing damage that was unrelated to to the current claim. Is this not the same thing. You are only paying for the current market value based on the cars history and conditon on the total loss.

Others may come to this site to monitor it as I have to present our side of the equation to challenge possibly some of your own beliefs. It's not our intent to demean your good will but we feel that our viewpoints must be represented as well as our experiences with the insurance industry.

Mike of the Ozarks

Posted: 12 Feb 2008 12:54 Post Subject:

Good morning Mike

...in which you believe insurers are incapable of some of the things we are telling you we see regularly by most all insurers.

No, Mike your incorrect, I know and believe many carriers and some adjusters for that matter are very capable of the things your are saying, (remember I was a large body shop manager too for several years :wink: ).....re

:Missouri Unfair Claims Practiced Code of State Regulations, it states that if an insurer prepares an estimate with the use of an alternative, aftermarket, or generic part, that it must meet the definition of like, kind, and quality and must perform as the original


If memory serves it also says they must be clearly identified as well on the sheet...

I too, have been heavily steered against because of my proactive stance on educating consumers when they are being abused by both first and third party insurers

I'm with you on total education and the customers right to know all information re: their vehicle repair, choices etc....Are you saying Mike, that you and/or your shop have actually been targetting (''steered against") by a carrier(s)?

I have had customers sign affidavits that state that the regional claims manager of one of Missouri's largest insurers told her agent that the reason they did not want her to bring her vehicle to my business was because I was a crook and that they were building a case against me

Seriously? (not saying it didn't happen just shocked), are you saying the manager told the agent who told your customer this? Or do you have it straight from the agent? If this is true and proveable I think you have no choice but to sue...of course...what is this 'case' they are alleging?

building a case against me

for what?

I even have this adjuster on tape telling me that I have to cost shift to match his final bill.

Is this a DRP Mike? ''Cost shift'' is way different than saying, 'hey guy this is all I can do' you see what I mean? He can't ask you to change things that are or are not done to meet at the bottom line...

I believe that there are still some older adjusters around that try to do the right thing, but the pressure for you guys to perform ethically is so radical that I know of two local adjuster in recent years that have had heart bypass brought on by stress of performing under the pressure exerted on them by the company.

Tell me about it! I am an 'older' adjuster (forty-eight) and been at this since 1987....there is no question, that there are many 'rules' that we have to follow, ie, non-oem parts on certain year/mileage vehicles, partial refinish, (which i also don't agree with totally and have addressed) used weld on parts, and we won't even go into clipping..which fortunately is seeing it's way out...there are things like this Mike, a good adjuster knows how to fix the car correctly and how to write the sheet to 'justify' what he/she needs to do for the auditor as well, and still come to a conclusion with the shop that is win/win for shop/adjuster/owner....the problems arrise when you have an adjuster with little experience, who either thinks he knows it all or a shop that won't take the time to teach...now on that topic....You seem to me to be a very intelligent, caring person, who wants to fix the car, the correct way...let me ask you something...when a new adjuster comes to your shop do you (or your foreman whomever) actually try and help this kid, or is there an automatic standoff? You know what I mean? I have to say that bein' a chick in a mans world (especially when I started) has of course it's con's but also it's pro's when I was a shop manager (and now) there isn't nearly the 'chest bumping' going on well cause I'm a chick....and have found it easier for me to educate rather than 'guy to guy'...do you understand what I'm saying? I guess I'm asking is there a sincere effort to work together or a brick wall thrown up? When I have to go to a shop because three other adjusters have running crying from it because of the horrible treatment they've received (without having even been to that shop before)...we as partners in repairing our mutal customers vehicles have a huge problem....

You make it clear that an insurer is not required to restore the value to a car, but this is in conflict with the fact that you are servicing an actual cash value policy.

I'm not understanding this statement, are we talking about a repaired vehicle? An insurer is required to return a vehicle to pre-loss condition post accident..I'm not getting this one Mike is your point that by using a/m reman used parts the vehicle is not returned to pre-loss condition?

You do not have to pay for any perceived loss of value, but you can not restore the vehicle in anyway that lowers the post loss value of that car

agreed............

I know you believe in loss of value or diminished value although you may feel you do not have to pay for the loss on first party claims.

Yes, and no, first, it's MO who says that there is no diminished value on first party claims not Lori....I do not feel that a vehicle that has been correctly repaired has suffered a loss of value...if that's the case Mike every vehicle you repair would have diminished value, I'm saying that simply by fact that a vehicle was in an accident and repaired does not in an of it's self result in a diminished value, if the shop did it's job....

I say this because I read a post that you stated that you would lower the value of the total loss settlement for pre-existing damage that was unrelated to to the current claim. Is this not the same thing. You are only paying for the current market value based on the cars history and conditon on the total loss.

No, I don't see this as the same...we have two 98 explorers on a lot for sale, everything is identical, right down to mileage/options etc...but one has a ten hour dent in the quarter, other one does not...that vehicle isn't worth what the other one is......that is what the pre-existing ''damage'' is about....now, let's say we repaired both of those vehicles six months ago, and lets say for the sake of argument one of them was repaired with capa a/m cover, lamps, fender, header, even a hood...and for some reason the other one was with all new oem parts.....(i know this because we insured them both and I have to look at the prior claims etc)....again both vehicles being equal, one is not of less value than the other when I am determining the ACV (because they are now totaled) because one has a/m and other has new oem parts...they will be the same....on the other hand, I have while determining ACV on total losses, seen and deducted some value for poor prior work, not what parts are used, if I have a vehicle that I can clearly see is full of dirt, fisheyes, sand scratches, just a mess of a job, that vehicle is going to be worth less...not because it was repaired, but because of the quality (or lack of quality) repair....

Others may come to this site to monitor it as I have to present our side of the equation to challenge possibly some of your own beliefs. It's not our intent to demean your good will but we feel that our viewpoints must be represented as well as our experiences with the insurance industry.

I'm totally with you here Mike and welcome your contributions, as I'm sure all do....It is not your intent to demean, but rather to have an open honest exchange of ideas and experiences, that is what this is all about....however when it becomes hostile and a personal attack or when posters label and entire profession, that is when I take exception, as well I should...much like Mastertech clear hostility because (amoung other things) he feels he has to

If I sand and buff nearly every job because I want it right, you just don't pay for it!

well, Mike we both know what that means....... :roll:

I sincerly hope you stay around and we can exchange ideas openly....I work 100% of my day in body shops...you'd be hard pressed to fine one tech/manager/owner to say a harsh word against me or my work product...are there crappy adjusters/companies out there? you bet there are same as there are bad shops....I truly belive that the answer lies in open communication and education on both sides without hostility...

Posted: 13 Feb 2008 06:29 Post Subject:

Part of Lori's Post:

Posted: Mon Jan 21, 2008 1:00 pm Post subject: Direct Repair Programs ...

.What about the shops that charge (for instance) to detrim a door, and I make an unannounced drop in the vehicle is in the booth, or just been sprayed and the idiots taped everything off? huh? what about them? Is this not lying and theiving? of course it is...but I"M NOT MAINTAINING THAT ALL SHOPS ARE THAT WAY! But there are some that are...I suppose you are going to say that's it's ok, since the big bad ins company ALWAYS screws the poor body shop right? Two wrongs make a right? If that is your stance that is unethical and you know it.....You are owed for what you do, and no more!



I'm sure there are some Shop's and Insurer's that cheat the consumer whenever they get the chance. But.

I have two questions. In this situation...

Do you ask to see the Final bill from the Repair Shop?

Do you ask if the consumer Authorized a complete repair?

(since a consumer isn't required to repair any of the damage, they could have demanded the repairer Not perform those tasks. Lowering the final cost of repairs to the consumer.)

Just wondering,

FK

Posted: 14 Feb 2008 12:33 Post Subject:

I'm sure there are some Shop's and Insurer's that cheat the consumer whenever they get the chance.

I agree there are bad apples on both sides of this fence...I preferred to think/know there are far and away more good than bad, (on both sides).......


Do you ask to see the Final bill from the Repair Shop?

Who is the 'you' that you are referring to in this statement?

Do you ask if the consumer Authorized a complete repair?

I'm guessing that you mean the adjuster here, does the adjuster ask to see the auth for repair? If that's your question...in DRP shops which is what this thread pertains to, there is an authorization for repair signed yes and in the file...

(since a consumer isn't required to repair any of the damage,

You are correct they are not required to repair any of their damages, however, they cannot pocket this money if a leinholder is present (on first party claims) unless the lein holder (mistakenly) signs off on the draft...

since a consumer isn't required to repair any of the damage, they could have demanded the repairer Not perform those tasks. Lowering the final cost of repairs to the consumer.)

This is not correct in first party claims with a leinholder present...as an example....Ins. damages vehicle goes to the shop to have it repaired, insurance adjuster writes the sheet, or agrees with the shops sheet and pays for the repairs minus the deductible to the shop and insured, based on that estimate...Then (in your example lets say) the vehicle owner says to the shop, 'hey, I don't want you to do 500.00 worth of the repairs written' to 'cover' the deductible or get most of the money back themselves...well we got us a lot of trouble here...First of all in a DRP it will be in the contract that they actually do what is written on the est=FRAUD....If the insured has a lein holder they are also an equal insured under the contract and must be protected...so any work that is not done, would go to the insured with the leinholder protected...now on the other hand if this is a claimant and the draft has been made ONLY to them...go for it...or (still) if a claimant and the draft is made to them and the shop (NOT a DRP that would be voiding their contract by commiting fraud)...and that shop is silly enough to pay the income taxes on the full repair and not getting all the money...(all companies imput the tax id # on the draft when made to a provider like a shop and this generates a w2 for the shop)...well that's just stupid...

Posted: 15 Feb 2008 06:54 Post Subject: Not sure about a few things.

If I have no contract with and insurer, and I have not reached an agreed price, as it is not my contractual obligation to do so, but I have a contract with the vehicle owner and the insurer pays the shop direct ir shop and vehicle owner on the draft, and if I work from my own repair plan in agreement with the other contracted party and my final invoice is based on what either the first or third party requests of their property, then how can I be a party to fraud or why would I be liable for any federal income taxes on services not provided.

I believe that insurers are indemnifying policy holders and independent shops are not subcontractors to insurers unless they sign an agreement or arrangement to do so. A shop is not a subcontractor by virtue of any implied contract of adhesion by using the insurer funds paid to the policy holder for their loss to pay my invoice of repairs.

It's the leinholder and vehicle owner's property. If the leinholder waives and signs the insurance draft and tells the property owner fix what you want then would you consider that fraud or evasion of paying taxes?

Should I have to hire a private detective to chase down every person who has forged my name to an insurance draft to cash or deposit into their account because I am liable for earned income from a payment received from someone I did not have a contract with? If Uncle Joe paid 2000 dollars to have his nieces vehicle repaired, is he required to send a 1099 in to the government for that payment even though he did not contract the repair?

I'll grant you that my invoices had better be in order to prove my earned income but I can not be held liable for taxes on income not earned regardless of how many 1099's I receive.

This is the advice I have been given in the past by an attorney which insurers routinely hired to consult with.

Posted: 16 Feb 2008 12:32 Post Subject:

Mike,

If I have no contract with and insurer,

First of all in a DRP it will be in the contract that they actually do what is written on the est=FRAUD--in DRP shops which is what this thread pertains to

why would I be liable for any federal income taxes on services not provided.

All companies that I am aware of (within the last few years many much longer) have to include (per the IRS) your fed.tax id number (usually starts with 43-something) on all draft payments that include a company or vendor whatever you want to call them that is completing work...(including contractors etc on homeowner claims) now for awhile we got away with not doing this if the company was incorporated, why? I don't know don't ask me I have no idea what the difference is...What I do know however is that every draft (in the company I work for which is one of the top three auto insurers) that has a body shops name on it has a fed.tax number which reports this total amount of the estimate to the IRS. What you do about it is your deal...if you want to pay taxes on money that you didn't get (because you didn't do all the repairs and either gave money back to the owner or covered the deductible that way) I guess you can but doesn't sound like a very good business practice to me....

then how can I be a party to fraud

again, the thread is about DRP's, but another problem can arrise for the insured when they have another claim six months from now and that bumper cover wasn't repaired, and they want the ins company to pay for it again...not happening Mike...

It's the leinholder and vehicle owner's property. If the leinholder waives and signs the insurance draft and tells the property owner fix what you want then would you consider that fraud or evasion of paying taxes?

(NEVER EVER have I heard of a leinholder saying, 'fix what you want'-not saying it hasn't happened, will say in 22 years I've never heard it..if they did say that of course then you are correct, aside from that) NO and here's why, if the leinholder and insured are on the draft (no shop) and that leinholder is silly enough to just sign that draft over without making sure those repairs are made....I'm off the hook (an an insurance company) on the other hand....By putting the shop on the draft, if the shop doesn't do the repairs that were paid for and that vehicle is repopped, then it's the shop and the insured that will be held liable and have to pay that amount to the lein holder not the insurance company...and yes I 've seen it happen both ways....as an example...the young adjuster issued payment only to the owner of the vehicle 1k in damages, the owner blew the money on everything BUT the repair, that vehicle is repo'd the leinholder gets the car back and there is 1k in damage on it, they come to the insurance company and say, 'what's up with this?" ins company says, 'oh crap' because we didn't protect that leinholder we (as an insurance company) will have to pay that claim AGAIN...now, same scenerio only the adjuster put the shop and owner on the draft to 'insure' repairs are made...again vehicle is repo-d, but only 500 in damages are repaired, leinholder calls ins company who says, we paid Mike of the Ozarks based on our estimate to fix all 1k of the damages, he never contacted us with any different information, he knows what we were paying for....so now the leinholder calls you (and the insured) and says, 'hey were you paid among other things to fix this bumper?' yes, mr. leinholder I was, but the insured didn't want to so I just gave him his money back' ok, now we can go to the insured and he will have that added to his debt....or when the leinholder calls Mike, you say, 'well it's like this, the guy was more concerned about us putting new wheels on the car, so instead of replacing that bumper cover we used that money for new wheels'' ain't gonna go over Mike...in ''our'' state that is.....I'll have to be honest and can't say that I know the outcome of these, many with insureds, but can remember only three where body shops were brought into the action...I honestly don't know the outcomes, if the shops got out of it or ending up having to pay all or a portion....I'll try and remember the names/shops though, and talk to the owners (if I can remember) and see what did happen...
Also if the insured and leinholder are the only ones on the draft then there wouldn't be a tax number on the draft (not always on the draft by the way but is in the computer)....then if the insured pays you a portion to do whatever actual repairs you did do then that is between you and the IRS and no different what so ever than a 'customer pay' job.

Should I have to hire a private detective to chase down every person who has forged my name to an insurance draft to cash or deposit into their account because I am liable for earned income from a payment received from someone I did not have a contract with?

No but you'd better bet if it happened to me I'd be getting a copy of that draft from the insurance company and heading straight to the prosecutors office on the double...why would you want to pay taxes on money you didn't get? You should be furious about that! And yes, I have seen a couple of those cases successfully prosecuted...

If Uncle Joe paid 2000 dollars to have his nieces vehicle repaired, is he required to send a 1099 in to the government for that payment even though he did not contract the repair?

nope...

I'll grant you that my invoices had better be in order to prove my earned income but I can not be held liable for taxes on income not earned regardless of how many 1099's I receive.

No but you sure can be held responsible for the taxes on payments issued to your for a job, based on that job...and what a mess to have to sort that out....I'm not saying that you might not be able to (hopefully) prove to the IRS if you are audited that yeah, I got a 1099 for 3k from blah blah insurance company, but I only really got 1k ...again as you said you'd better have your files in order, and I'm sure ''you'' do....and personally if I were in your shoes and routinely doing this...I'd have those ready as they come...do you go thru every single 1099 and put it with the J.O.? and change it to the actual amount of work you did? You'd have to, in order to make sure that your not paying taxes on more than you should....

Posted: 17 Feb 2008 11:18 Post Subject: Just some clarification.

I am a sole proprietor, I have both a federal ID and a SS. I pay taxes as a sole proprietor based on income not what 1099's say I have earned, but I do pay taxes with my SS based on what my invoices say I have earned on my schedule C.

I agree with you if a policy holder has been paid for damaged parts and they did not fix them, you do not owe the entire cost of replacement again in a subsequent wreck unless they can prove they were replaced. This has no bearing on what the shop did or did not do if they invoiced the vehicle owner. Again the DRP arrangement is different I agree. I know of shops that are on all three of Missouri's top insurers programs and routinely abuse this invoicing. They have been caught and yet they remain on preferred programs. Parts dealers from another state confide in me that some DRP shops routinely order oem part for invoices and ship them back, show the invoice for oem or new parts to the vehicle owner if questioned and substitute cheaper a/m parts to comply with a parts useage requirement to keep their csi report card in order. There are just so many of these types of fraudulent practices going on that I question myself, why would I want to be a party to an arrangement that created the potential for corruption.

If a customer comes to me with an insurance draft and my invoice is less than the amount the insurer estimated, my name isn't on the draft and I do not have a contract with the insurer, any overpayment goes back to the policy holder. If the leinholder, as they often do, feels their collateral is sufficiently protected by virtue of the vehicle owner having subtantial equity in the vehicle, and the repairs the consumer wishes to make are different than the insurer estimate, the leinholder often allows the consumer to make the choice of repair. Indemnification does not require repair of the property but for does require payment of the value of the loss on an acv. The insurer may be beholding to the leinholder and state but the non drp repairer is not beholding to the insurer or the leinholder who may elect to that right or protection.

If my shop name is on an insurance draft, that does not obligate me to repair as the insurer estimated. It also tells me that the vehicle most likely has a lein on it. I tell the customer up front, if you have a lein on your property, and you want to fix it differently than you have been compensated to protect your leinholder, then have your leinholders name placed on the check, take mine off, and I'll fix it according to my estimate and invoice if your leinholder puts that in writing or allows you to cash the check. Afterall the purpose of naming the repairing party or leinholder on a check is not to force the vehicle owner to repair the car, it's to protect the leinholders securtiy in the car. Many times banks have homes, boats, cars, businesses secured by collateral and they really don't care whether the vehicle owner puts barn siding on their car or plywood as long as they pay their notes and are not upside down in their finances.

Not legal but my opinion based on interpetation and consultation by an attorney.

Posted: 21 Feb 2008 04:18 Post Subject: DRP

I was a DRP for a major insurance company. I was told by my DRP Co-ordinator that I was to repair vehicles the insurnance company way, not my way. I was told to blend the clearcoat into a sail panel. I provided documentation from: Dupont, Glasurit, RM Sherwin Williams and other paint manufacturers, documentation from Nissan, Toyota, Ford, Gm and other vehicle manufacturers that a blended sail panel will fail. I was told to blend or get off the program. I have an extreme dislike for Taiwanese parts. They have proven over and over to not be the same in both form or function. I told my Co-ordinator that I could not tell the vehicle owner that these parts were any good. I was told to lie. I was told to keep my opinion to myself and to say "these parts are guaranteed by the insurance company". You need to get out of your Ivory Tower and into bodyshops, find out the truth about DRP's. It is only about the money, not quality OR safety.

Posted: 22 Feb 2008 02:21 Post Subject: DV is a fact of life.

Lori you state

I'm saying that simply by fact that a vehicle was in an accident and repaired does not in an of it's self result in a diminished value, if the shop did it's job....


Actually you are wrong there. I have managed a new car dealership for over 10 years. If a customer knows that a used vehicle they are thinking of buying has been in an accident, (no matter how light, whether or not they can tell it has been repaired) then that vehcile is automatically worth less in their mind. Let me say that again AUTOMATICALLY WORTH LESS in their mind.

That fact is the very definition of diminished value.

You body shop folks and insurance folks may debate the existence of DV all day long, from whatever motivated position you hold. But if you want to know the truth, ask someone in the used car appraisal/sales business.

We ALL know it. We ALL appraise clean original vehicles for more money than one that has been hit and repaired. We have to, because 99 percent of our cutsomers do (I say 99 percent because I suppose a few of them will be shop guys or insurance people pretending not to care)

Posted: 22 Feb 2008 02:55 Post Subject:

Dealer Guy, you have answered your own query and made my point exactly,

then that vehcile is automatically worth less in their mind. Let me say that again AUTOMATICALLY WORTH LESS in their mind.

"in their mind", does not make it so !!

Posted: 22 Feb 2008 04:12 Post Subject: That is the very concept of inherent diminishment of value

The public perception that a vehicle that has been repaired is not worth as much as one that has never been wrecked, drives the market value of those vehicles. The mere existence of Carfax is for consumers to guard themselves from purchasing previous train wrecks if a consumer or dealer does not disclose the damage history intentionally or by their ignorance of the unknown facts. By the way, the government has ignored a law that was passed in the early nineties, to build a federal database for consumers to have this information freely. There is currently a lawsuit aimed at rectifying this failure to implement the program.

If a customer had a choice of buying a 2004 bmw that has no accident history, and carfax verifies that, or buying one that had 10,000 dollars worth of damage and repaired by a certified dealer, the customer will not give as much for the damaged vehicle. That's the facts Jack! The newer the vehicle and the lower the mileage, the dimishment is greater.

Of course if there are repair related flaws and defects, or the insurer refused to pay to remove the engine and work a buckle down on the frame rail or they insisted on the use of aftermarket parts, that too will drive the value down even further.

Sadly the industry average on the quality of repairs are bad. Too many shortcuts taken to make up for time not paid to do the job right because too many shops refuse to look at who's name is on the front of their business and who their customer is, choose the path of least resistence and work for what the insurer feels is adequate.

Oh that bmw, by the way, by my calculations and inspection and appraisal, has a value or less than two thirds what it should sell for without any damage.

While I am not using the program that T said was a joke, I am using a software program to organize the preloss values determined by recognized appraisal data along with comparable available vehicles for sale in that market, with a visual inspection assessing the severity of the repaired and non repaired damage, to arrive at a post loss value.

The diminishment in value is not a figure a program spits out, it is based on an investigation and assessment based on ove 30 years experience of repairing, selling, and appraising vehicles. DV is calculated by simply subtracting the postloss value from the preloss value. Those are your damages due to the negligence of the party that caused the loss. And in virtually every state in this country, you can collect for those damages once you have proven them. You do not have to sell your car and the shop that repaired your vehicle is not liable if it was repaired to your satisfaction.

Posted: 28 Feb 2008 06:43 Post Subject:

If a customer had a choice of buying a 2004 bmw that has no accident history, and carfax verifies that, or buying one that had 10,000 dollars worth of damage and repaired by a certified dealer, the customer will not give as much for the damaged vehicle. That's the facts Jack! The newer the vehicle and the lower the mileage, the dimishment is greater.

I hear this a lot. But can you site any cases where two identical cars were sale side by side and one was known to be damaged and the other not? Truth is, it does not happen. So your _still_ stuck convincing people that every pays less for a vehicle that has been damaged and completely repaired to exactly like it was before (example: fender was dented and replaced with a brand new OEM fender). Your also stuck telling us that vehicles that have been repaired never sell for the same price as vehicles with no damages. Do you have anything to back _that_ up?

I've traded in _many_ vehicles and I've _never_ (never) had a dealer ask me if the vehicle had been damaged and repaired. Perhaps this is not normal but it's never happened to me.

While I am not using the program that T said was a joke, I am using a software program to organize the preloss values determined by recognized appraisal data along with comparable available vehicles for sale in that market, with a visual inspection assessing the severity of the repaired and non repaired damage, to arrive at a post loss value.

Does that translate into English in anyway? Your saying insurance companies pull figures out of the air but you see no problem with your statement above? If I understand your above quote correctly, your saying you looked at the vehicle and made a judgement call as to what it was worth after the accident. Did I miss anything? Was this "software" called a "calculator"?

DV is calculated by simply subtracting the postloss value from the preloss value.

Who determines the post loss value? Sure it's simple... you use one value based on unknown data used by a company such as NADA (were any of those vehicles damaged and repaired?) and then make up the other piece of data.

virtually every state in this country, you can collect for those damages once you have proven them.

Out of 50 states, how many is "virtually every state"?49, 48? I can probably name 3 or 4 off the top of my head that don't recognize DV. You really want to stick with "virtually every state" or do you perhaps want to modify that statement?

It is a little funny to hear a repair person complain that using anything but OEM parts is not putting the vehicle back in the same condition but then also stating that even when using OEM parts, people don't perceive the vehicle to be in the same condition. It's pretty much a no win situation for the insurance company, huh? I take my car into the dealership and they tell me the only way the vehicle can be put back in the same condition is to use their parts. I turn around and want to trade it in and the same dealer tells me that it's _not_ in the same condition.

I guess to be fair the insurance companies could just all use OEM parts, pay whatever any shop wants, pay for DV and then raise every one's rates to 5x what they are being charged. Perhaps everyone would be happy then. You okay with that?

Personally I live in the real world. I know there are two sides to every story.

Posted: 28 Feb 2008 12:37 Post Subject:

I've traded in _many_ vehicles and I've _never_ (never) had a dealer ask me if the vehicle had been damaged and repaired. Perhaps this is not normal but it's never happened to me.

Me either tcope and the reason behind this is, 'don't ask don't tell', if the dealer KNOWS there is prior damage over a certain amount (state dependent of course) then they are required to disclose this....if they don't know they can't disclose it right? I see cars all the time, that have prior poor repairs, when I ask the owners , you know this vehicle has been repaired before right (for a variety of reasons) they more times than not have no idea, ''I just bought it two months ago and the dealer never said that" or more common, the prior repair sure does hurt the owner on the 'trade in' value, but go look at that car on the front line a week later and see if the new buyer is both told about it, and if they receive this huge discount of diminished value...NOT!

I have never understood how a body shop owner/tech/whatever, could say, (in effect) "yep, we fixed that car back to pre-loss condition, she's perfect now! But it's not worth near what it was before WE FIXED IT!" How aburd! So you don't do near the quality repair you thought I guess? Never have I been able to understand anyone in the collision industry agreeing with this logic...keep that up and we will come to a point of NEVER repairing ANYTHING! Why should ins carriers do that? If after paying for this quality repair you then have to pay diminished value as well? Why not total 'em all? :?

RE:

virtually every state in this country, you can collect for those damages once you have proven them.

I can tell you one that doesn't and excludes it right in the policy for first party claims Mike and that's your own state!

(Mo policy A-20.5-A) "Repair does not mean the restoration of pre-damage value nor does it include compensation for the diminution of value the accident caused..."



Actually to the contrary all the research I have just done (took me about ten minutes) tells me that MOST (all but eight or nine) states do NOT allow it

Except in Georgia, coverage has traditionally provided for repair of damages. Eight other states allow for diminished-value coverage

,

States That Allow Diminished-Value Coverage

Delaware Yes Delledonne vs.
State Farm (1992)
Iowa Yes Hawkeye Motors
vs. McDowell (1995

Mississippi Yes Potomac Insurance Co.
vs. Wilkinson (1952)


North Dakota Yes Sullivan vs.
Pulkrabek (2000)

Ohio Yes Allstate Insurance Co.
vs. Reep (1982)
Tennessee Yes Senter vs. Tennessee
Farmers Mutual (1985)

WITH CONDITIONS:

Delaware Diminished value for flood damage
is covered. If policy language is
ambiguous, however, payment for
diminished value is required.

Holds policy does not obligate
insurer to pay for diminished
value.

Georgia Court recognizes diminished value
as an element of loss covered
under State Farm's policy
language.

Iowa Court affirmed that proper measure
of damages is the difference
between the car's market value
before the accident and its market
value after the accident.

Kansas When insurer attempts to repair or
rebuild under a "repair, restore
or replace clause," insurer is
obligated to return the damaged
property to substantially its
original condition so it is as
valuable as it was before damage
occurred.

Under Wausau's promise to "repair
or replace the damaged property
with material of like kind and
quality," the general coverage of
the policy extended not only to
the cost of repairs but also to
the diminution in value of the
repaired vehicles.

Mississippi Held that if, despite repairs,
there remains "a loss in actual
market value, estimated as of the
collision date, such deficiency is
to be added to the cost of
repairs."

North Dakota Third-party diminished value claim.


Ohio Third-party diminished value claim.
Court held that the owner of a
damaged vehicle may prove and
recover the reasonable cost of
repairs provided that the cost of
the repairs does not exceed the
diminution in market value or the
fair market value of the vehicle
before the damage was sustained.

South Dakota Diminished value applies only when
vehicle is damaged beyond repair.

Tennessee If after repair, auto is restored
to function and appearance but not
to fair market price, the insured
can recover for the difference.

Source: National Association of Independent Insurers
Total Auto, Top Writers

Posted: 29 Feb 2008 01:33 Post Subject: I thought the subject was third party DV

I have to say that I am a little disappointed in both you guys in regards to disclosure of vehicles that have previously repaired damage when you consider trading them in. Sounds a lot like "Buyer Beware". Every car that I have ever repaired and sold or had an accident history, I have fully disclosed that fact and let the chips fall where they may with regard to market value. As a professional in the service industry and anyone as a professional employed in property casualty should have concern that the potential buyers have full knowledge of pre-existing accident histories before they lay down hard earned money or extend their debt to purchase junk.

Didn't State Farm Insurance run to every state's attorney general to make a sweetheart deal to cover their tracks in regard to consumers in every state buying previously totaled state farm salvage? Seems like the bean counters realized they could get more salvage value from vehicles that did not possess a salvage titles at auction. I inspected some of these cars for an attorney that worked to get information released to those consumers to let them know that vehicles they were driving had severe accident histories and known previous damage and that they should have a reputable shop inspect the vehicle for defects? Even though those victims received a compensation from that settlement, it was no where near enough to repair the damage on them to make them safe to drive. State farm should have had to buy these cars back if the consumers had an option, but the attorney generals thought the insurers were good ole boys for bringing up their sins and rewarded them by accepting the settlement offer.

I will agree with you both that only three states pay first party DV. I thought that the subject was over third party DV. While I believe that first party DV exists, I understand that insurers have been able to have it written out of the policies.

In one huge case the last couple of years a collector of a fine piece of art, insured that work for diminishment of value because it was undergoing a cleaning. In the process the work of art got punctured and a claim was filed for first party DV. The insurer refused to recognize that there was any loss of value, but a jury agreed that the work of art was no longer pristene and was simply not worth as much as before it was restored. The settlement was to the tune of over 100 million dollars and the painting was previously valued at 56,000,000. There is a long case history for recognizing loss of value. After all, a cash value policy promises to repair, replace, or pay for the total loss of a piece of insured property. The language of the policy promises pre loss which in and of itself is usually unattainable I'll agree in most cases. Hey, I didn't promise pre-loss the policy does. The insurance industry has been able to successfully remove payment for first party loss of value by the getting all but three departments of insurance to allow insurers to exempt it from policies.

I bet you both have seen the Antiques Roadshow. If you have, I'll bet you have seen the appraiser inform the holder of the object that the value of the object is not worth what it could be, because of flaws, defects, or repairs that compromise what otherwise would have been a pristene undamaged artifact, vase, painting, piece of furniture or whatever.

The previous discussion was dealing with third party loss of value. If anyone can prove a loss of value due to the negligence of the tort feasor (at fault driver) or your insured, the insurer must pay for that loss of value due to the fact that they insure that negligent driver with liability coverage. Virtually in all 50 states according to the re-statement of torts. It has nothing to do with the contract of insurance because the third party is only limited to the amount of liability coverage in that policy as to how much the insurer is on the hook for. A third party claimant in not bound by policy language of exemption of payment for loss of value in a liability claim or any other terms and conditions to a contract that they are not a party to.
We'll have to agree to disagree on whether, you as adjusters and appraisers, believe any loss of value exists. If it didn't, why would juries award it, and with insurer's huge checkbooks and legal staffs, why would they pay any loss in value to anyone. You could out litigate just about everybody in the country. The fact is that most insurers negotiate the settlement or they force the party all the way to the court house steps to make sure the expenses will be huge for the damaged party, pick a jury, go through depositions, and then settle before going to trial because they know they would lose in court on any third party claim regarding loss of value.

I have written over ten appraisals for loss of value last year, and some insurers even agreed to arbitration, rather than litigate, and lost. But after some negotiating by an attorney who works on contingency for the loss in value only, all recieved substantial diminished value settlements.
I have even written diminished value appraisals for insurers that have been directed by a Kansas state department of insurance to pay for any claims owed by Missouri insurance companies when presented with claims by Kansas vehicle owners

The sad fact is, that repairs can never restore the value or eliminate the accident history. It is the accident history that is the mitigating factor that determines a car that has been damaged and repaired is not worth what a vehicle is that has never been in an accident.

If you had an actual cash value policy on a diamond ring, and that diamond was damaged or stolen, the payment for loss would be on the value of that diamond at the time of loss or damage. Using insurer logic that a generic diamond or zirconium diamond looks just like a diamond to the untrained eye, it cuts just like a diamond, it may even fit the ring like the original diamond , but it would not be equal to the diamond that was lost. However the insurer might say that all we owe you for zirconium.

Just like that zirconium in my example, generic parts are similar. They may look similar, might even occassionally fit but will definately lower the value of a vehicle when the customer knows the repairs were made with inferior parts. A part made from taiwan with metal that is not as pure as american standards; not the same thickness; made from imitiation molds formed from reverse engineering; no galvanized rust protection, are not just like the original parts and will lessen the value of that repair or the value of the car and will not place the vehicle owner in pre-accident condition. That is, unless he had a generic fender on there from a previous accident.

Posted: 29 Feb 2008 01:12 Post Subject:

I have to say that I am a little disappointed in both you guys in regards to disclosure of vehicles that have previously repaired damage when you consider trading them in. Sounds a lot like "Buyer Beware". Every car that I have ever repaired and sold or had an accident history, I have fully disclosed that fact and let the chips fall where they may with regard to market value. As a professional in the service industry and anyone as a professional employed in property casualty should have concern that the potential buyers have full knowledge of pre-existing accident histories before they lay down hard earned money or extend their debt to purchase junk.

I don't know where you got that I don't think there should be full disclosure Mike I never said that, I think there should be full disclosure, I just don't think/buy into there being an automatic, (in fact I think it is extremely rare) diminished value of the ACV simply because it has been repaired....period...that's my point....that the mere fact a vehicle has been in a collision does not in and of it's self cause a diminishment of the value, assuming of course the vehicle was repaired correctly.


Now Mike we are not talking about rebuilders here, so that arguement is of no use to this thread, I don't think anyone would say that hiding the fact that a vehicle was a prior total and sold as a clean title is a different topic, and cannot see how anyone would agree that that is ok, (without disclosure)...two totally different topics Mike.

I will agree with you both that only three states pay first party DV. I thought that the subject was over third party DV. While I believe that first party DV exists, I understand that insurers have been able to have it written out of the policies.

I thought we were talking about dv period....the point was that the vast majority of states disallow right in the policy first party dv...

In one huge case the last couple of years a collector of a fine piece of art, insured that work for diminishment of value because it was undergoing a cleaning. In the process the work of art got punctured and a claim was filed for first party DV.

Ok stop stop stop, this is a homeowners policy you are talking about....we are discussing auto dv and auto policys....there are way too many differences in the policys and wordings, and endorsements etc...the one you refer to also

I bet you both have seen the Antiques Roadshow. If you have, I'll bet you have seen the appraiser inform the holder of the object that the value of the object is not worth what it could be, because of flaws, defects, or repairs that compromise what otherwise would have been a pristene undamaged artifact, vase, painting, piece of furniture or whatever.


Yes actually I'm a big fan, and most of the time it is because the repair or cleaning were not done CORRECTLY, or was frankly a hack job...big difference and again we are talking about personal property not autos..

We'll have to agree to disagree on whether, you as adjusters and appraisers, believe any loss of value exists. If it didn't, why would juries award it,

I'm not saying now nor have I ever said that there is NO dv, there is albeit rare...I'm saying that the mere fact it was in a wreck and repaired does not automatically create dv assuming the vehicle was repaired correctly...

If you had an actual cash value policy on a diamond ring, and that diamond was damaged or stolen, the payment for loss would be on the value of that diamond at the time of loss or damage. Using insurer logic that a generic diamond or zirconium diamond looks just like a diamond to the untrained eye, it cuts just like a diamond, it may even fit the ring like the original diamond , but it would not be equal to the diamond that was lost. However the insurer might say that all we owe you for zirconium.

again mike, apples to apples please, you're comparing apples to oranges, there is no true substitue (as yet) for a diamond, none that will act or preform in the same manner....

Now you have taken used parts out of your agrument? your last paragraph only references a/m....all other posts have intimated used parts as inferior as well....but if I am understanding you, you still maintain, it really doesn't matter, if you put all brand spankin' new oem parts on the car you still have a dv claim....I hardly disagree....again, assuming it is a quality repair.

Posted: 29 Feb 2008 04:31 Post Subject: apples to apples is what I am talking about

Whether a policy is a home owners or auto, it is an actual cash value policy. We are discussing, or at least I am, the premise of diminishment in an acv policy. Both are based on the New York 165 lines of insurance policy from which all acv policies originated.

It is a common argument used by the insurance industry. If you fix the car the way they estimate, and correctly, there is no DV. Well which way is it? The amount insurers pay based on their estimate or the correct way which is a matter of expert opinion based on which side of the issue you stand. If I fixed vehicles based on the insurer estimate instead of the repair invoice that the law says I must produce and become liable for, many cars would not be fixed properly.

The internet news links that I could provide if we were able to paste links would show you the problems allowing insurers to dictate repairs. There is a inherent problem when you have the fox guarding the hen house. Insurers are looking for cheap fast repairs instead of quality repairs. Even the supreme court recognized the inherent conflict of insurers owning bodyshops by rejecting allstates claim they have a right to own and operate their own bodyshops by ordering them out of the business in Texas.

Posted: 01 Mar 2008 02:55 Post Subject:

WOW !!!

I don't know how to quote, other wise I would ...

First, on the subject of diminution of value, or DV. Easch and every state recognizes DV in a third party setting, with the possible exception of Michigan with their archaic "no-fault" laws.

Lori, the quotes you've posted are in reference to FIRST party claims, which are governed by the contract of insurance. Third party claims, on the other hand, are NOT governed by the insurance contract, instead, they re goverened by tort law. Essentially, the law of torts aims to restore an injured party to as good a position as they held prior to the loss. If the vehicle is not worth as much after the reapirs as it was prior to the loss, then the vehicle owner was not restored to their previous position.

Let's talk about this "diminishment". Someone said that the loss is in the propsective purchasers mind. The problem is that their mind translates quite quickly to their wallet.

Those who keep mentioning "restoring the vehicle to pre-loss condition" are missing a few vitally important points.

First, the repair industry cannot duplicate the factory. Not when it comes to factory robotic welds. Not when it comes to dipping the body for corrosion protection. Not evn when it comes to the finish itself (factory piant is chemically substantially different from aftermarket paint).

Have you ever seen bird droppings on a repainted vehicle ? They'll etch the finish down to the substrate - not so with the factory finish.

Also, the manufacturer's warranty is voided by any collision repair (on the parts affected by the repair). NO MANUFACTURER warranties work done as a result of a collision, with the possible exception of those manufacturers like BMW when the repairs are done at a certified BMW repair facility. Even then, if there is body filler in the panel, the warranty on that panel is voided.

You could try to argue that the insurer warranties the repair (and aftermarket parts for that matter, but those warranties are not transferrable like the manufacturers warranties are.

So in reality, the potential purchaser "thinks" it's worth less, so they are willing to pay less - guess what ? It becomes a reality.

Of course, this presumes that all relevant facts are known - full and open disclosure of the damage history. Please don't use the feeble "argument' of "if it was't disclosed, they would pay the same, making the DV non-existent". That's the same as someone paying for a diamond when it's nothing more than a piece of glass being sold by an unscrupulous salesman.

(by the way Lori - you're right- it IS "don't ask, don't tell", plausible deniability, but even then, as alleged experts, especially when a dealer does an inspections, this has bitten quite a few dealers)

So, shops can't really restore a vehicle to true loss condition, and market forces, defined as paying consumers, have decided that DV is real.



As far as shops giving their tax number ... that's just silly. Really. Unless the shop is doing work FOR the insurer, the insurer should NOT be paying them.

Unless something has drastically changed, the shop owner has a contract to do work for the vehicle owner. It's the vehicle owner who has to pay the bill. If I were a shop wner (I am not) I wouldn't really care where they got the money (well, I might care, but only in extremes). They could get the mmoney from their insurer, or the at-fault party's insurer, or their Uncle Mark and Aunt Pam, or they could sell their furniture - really doesn't make a difference to me.

Perhaps even more simply, it is thevehicle owner who authorized the repairs, it s the vehicle owner who is receiving the benefits of the service, it is the vehicl owner who owes for the bill.

Tell me why the insurer would be paying me (unless I was fixing "IRV") ?



OK, last (at least for me, for now) bt not least, aftermarket parts.

Wow.

OK - first,I want a MSDS for a Ting Coi fender. That dust could contain harmful chemicals, and I want to know about them.

Second - OE panels are glavanized, A/M is not. Instant difference. NOT like kind.

Let's go ack to the warranty issue again. OE parts arry a 12 mo/12 mile warranty - or te balance of the manufacturer's applicable warranty, whichever is GREATER. In most cases, the longest warranty is the outer body rust through warranty. A/M has no such warranty. A/M "warranties" offered by insurers (which may or may not be lega to begin with, yet another story) are NOT transferrable.

A/M parts, for the majority, are not truly LKQ.



Oh - and back to the DV/properly repaired issue for a minute ... how in the world does John and Jane Doe know if a vehicle IS properly repaired ? Answer: In most cases they don't. I clearly remember when "bondo" was a taboo - everybody knew that it would evnutally bubble (70's & 80's era and maybe a bit later).

It is at least in part this "fear of the unknown" that furthers the positionof DV exists.



I hope everyon here understands that I am not tying to be combattive or condescending, I am merely tying to clarify, factually, a few issues that I've seen discussed here.


Just my nickels worth.

Posted: 01 Mar 2008 01:49 Post Subject:

Good morning Alex and welcome!

Lori, the quotes you've posted are in reference to FIRST party claims

Thank you Alex I know that as I said either in this thread or another one....All states may 'recognize' dv, meaning as we all know a third party is not contractually bound to the policy. Their was no statement that we were talking about exclusively third party claims when this assertion was made re dv.....

And in virtually every state in this country, you can collect for those damages once you have proven them

Have you ever seen bird droppings on a repainted vehicle ? They'll etch the finish down to the substrate - not so with the factory finish.

I don't know who's refinishing the cars you're seeing this in....The shops I handles ALL have bake booths, I was a shop manager myself for several years NEVER once had this complaint, have had vehicles repaired myself, one I still have that was painted five years ago...NEVER seen this.....EVER......

Also, the manufacturer's warranty is voided by any collision repair (on the parts affected by the repair).

Sorry Alex this is absolutely NOT TRUE...if you are saying that a manu voids (or can, because they can't) their warranty on a vehicle because a used or a/m fender is put on that car...you are incorrect, in fact there is a thread around here with tons of research in it showing same...I've even talked to and have the info somewhere I'll look for it, showing that they cannot do this....if however you are stating they won't warrant that particular part, ok I agree with that....I disagree with the transfer of both the new manu warranty and the repair warranty though....you'll need to show that to me....I'm looking at a brand new car warranty of my own (10yr/100k) that is NOT transferable...

this has bitten quite a few dealers

I agree happens all the time and rightfully so, that they are burned, when (and yes I've seen it) they 'ding' the trade in, but 'forget about it' when they re-sell.

As far as shops giving their tax number ... that's just silly. Really. Unless the shop is doing work FOR the insurer, the insurer should NOT be paying them.


This is something you'll have to take up with the IRS I suppose, because the state I'm in we are required to do so, and IF a draft is issued to a provider (shop, vendor etc) and that number is not found on the draft the insurance carrier is fined, and fined big....another thing is lets not forget that the leinholder must be protected...again I'm talking about first party claims, claimant, doesn't matter, we don't have the contract with them, nor must we protect their leinholder in anyway-

...Let's go ack to the warranty issue again. OE parts arry a 12 mo/12 mile warranty or te balance of the manufacturer's applicable warranty, whichever is GREATER. In most cases, the longest warranty is the outer body rust through warranty. A/M has no such warranty. A/M "warranties" offered by insurers (which may or may not be lega to begin with, yet another story) are NOT transferrable.

Wait a minute here, and you can't just write this off, if the owner gets a warranty from the insurer that says for as long as they own that vehicle the repairs and parts are covered, and yes before you go there I have been party to coming back years later and repairing or replacing something that has failed, you can't deny that benefit...which is far greater than OE/AM or most shops will provide...The warranty I'm talking about even covers the repair if that shop goes belly up....so atleast give that some credance....




Oh - and back to the DV/properly repaired issue for a minute ... how in the world does John and Jane Doe know if a vehicle IS properly repaired ? Answer: In most cases they don't. I

again EXACTLY so because they don't know we will AUTOMATICALLY say that there is dv simply by virtue of a repair? no....I say.....

Another thing that has always bugged me about this dv thing...let's say a 7year old car had ONLY a rear cover replaced, let's say for the sake of argument it's new oem....let's further say that the orginal one while needing replaced from this loss, was not in good condition prior to the hit, dings/scratches, even the paint or clear coming off of it, in other words it was an eye sore...(no betterment taken) so we replace this crappy cover (before the wreck) that in truth would've had a prospective buyer wanting to to pay less...now you're telling me he also has a dv claim, when in fact his vehicle is worth MORE post loss/repair? And it is, you can't deny that (worth more given the points in this example)........

I hope everyon here understands that I am not tying to be combattive or condescending, I am merely tying to clarify, factually, a few issues that I've seen discussed here.


No one thinks that Alex you are a respectful poster and we welcome your opinions... :)

Posted: 01 Mar 2008 02:31 Post Subject:

Mike,

It is a common argument used by the insurance industry. If you fix the car the way they estimate, and correctly, there is no DV. Well which way is it? The amount insurers pay based on their estimate or the correct way which is a matter of expert opinion based on which side of the issue you stand. If I fixed vehicles based on the insurer estimate instead of the repair invoice that the law says I must produce and become liable for, many cars would not be fixed properly.

Are you saying that you never get an acruate estimate from an insurance carrier? See I'm just not getting this, when I write a sheet before I 'lock' it, I go over it with whomever has the authority, are there supps some times? Sure, but by and large there are NO ARGUMENTS, I might have missed something, or the shop did, we discuss it and come to an agreement, it appears from all your posts that you don't think there is one adjuster out there with the knowledge to properly repair a vehicle...please make yourself clear on that point.......

Insurers are looking for cheap fast repairs instead of quality repairs.

Well kind of, the insurer is looking to have the vehicle repaired quickly for the least amount of money, but you are dead wrong when you say ''INSTEAD'' of QUALITY REPAIR....and that's just plain not fair, to say that I (as a 'pd' adjuster, writing sheets all day) am not concerned with the quality of the repair..that is number one! PERIOD....I don't write to repair ANY car any differently than I would my own.....and to make it sound like there is absolutely no concern for the quality or more importantly the safety of the owners and occupants of the vehicle, well Mike that's just wrong, and the same as me saying, ALL body shop owners, lie, steal, cheat, charge for things they don't do, blah, blah, and are ONLY concerned with their bottom line, and to hell with the quality and safety of the repair, if the owner can't see it, butch it....I don't believe that nor do I think the majority of shops operate in this manner there are some though, just like there are some carriers that do business the way you are insinuating all do....

There is a inherent problem when you have the fox guarding the hen house

And you don't see it as this if a repairer has an open check book, which is what it appears you want....just have the owner drop off the car, and when it's done I'll call you and tell you how much it costs? No options nothing? I don't see how this could work....what other industry has this? What a sweet deal...I'm not saying that you wouldn't be by the book Mike, but you and I both know this would lead to horrificly high premiums.
There has to be 'someone' policing the repair, otherwise we'd be painting the entire car, to match because we put a fender or bumper cover on the car Mike...

the premise of diminishment in an acv policy.

how so? Also you have to remember when you are comparing an auto vs homeowners policy that the h.o. policy is not always an acv as many have replacement cost endorsements, as well as guarantee rebuild, etc....not the same at all.

Posted: 01 Mar 2008 05:12 Post Subject: We could beat this horse from today til this time next year.

This will probably be my last post regarding this topic as it probably does not answer questions that consumers really understand and it has ventured away from the original discussion. Since this forum is to benefit consumers and vehicle owners, our discussion serves no purpose for them rather than to see their is a devide between the insurance and collision industry. Insurers should never have been allowed into the collision industry to be able set controls on pricing and practices, but too many collision owners thought that a partnership may be the best way to serve mutual customers.

The insurance industry knows that there are more shops than vehicles needing repairs. The odds are in the insurer favor, knowing that they can dangle a relationship for the promise of referrals and some shop will take that agreement even if it means low profit margins that will drive them out of business. The collision industry does not owe the insurance industry and endless source of cheap labor so they can provide cheap policies. Something has to give and it is happening. Many shops operating on fumes and cash flow will go out of business. Those that survive will ultimately be able to price their services comparable to other trades using similar skillsets. When there are insufficient shops to service those contracts of repair for insurers, the day of the insurance industry dictating to us how to repair vehicles and for what compensation will cease to exist. And yes insurance rates will go up or your corporate profits will diminish. If our industry had been allowed to be indexed to the cost of living over the last 30 years, shop rates would have been exceedingly higher and deservedly so.

From my perspective, I do not believe the insurance industry has a right, obligation, or legal standing to tell me as a business person the method or cost to repair a vehicle for whom I have a contract with the owner of that vehicle.

You can choose to pay based on your investigation, the amount you feel is required based on policy and state statutes to the vehicle owner. It may be more or it may less than my invoice. It matters not to me and many other independent business people as we recognize that we are not obligated to negotiate the terms, conditions, or the costs of repair based on a contract that we are not a party to.

Nearly every estimate that a consumer brings to me is deficient to properly restore a vehicle. I have a vehicle in for repairs now, that my original estimate was 6200.00. the insurer estimate was for 3400.00. When I realized that the vehicle was close to a total loss, I spoke with the owner and asked what their preference was. Did they want to repair if possible or allow it to be totaled after they presented the insurer our cost of repairs. They chose to repair. I located some used parts, I personally made a concession to the vehicle owner to repair some things that should have been replaced to properly restore so as to keep the vehicle from totalling.

All said and done, the insurer paid the vehicle owner based on my invoice which was around 5800.00. Had the vehicle owner (third party) accepted the insurer check and estimate as the cost of repairs and traded that vehicle in, they would have been shorted 2300.00. This is typical and not uncommon as insurance adjusters and hired appraisers are told to write only what they can see from the outside.

There was a study conducted by a collision repair group that took insurer estimates and compared them to final bills. The consensus or only conclusion that could be drawn as to why insurers underpay initially on claims was that it was either intentional or from the lack of training and experience in understanding the repair concept. We must conclude that if the insurer only paid based on their initial appraisals, claimants( both first and third party) are being taken advantage of if they do not repair their vehicles or accept only what the insurer is willing to pay based on their investigation.

I don't lump all adjusters into the same group as far as being dishonest or unqualified. However, if you ask me whether an appraiser or an adjuster that works for an insurance company is allowed to use their acquired knowledge and training to write an estimate that is accurate, complete, and totally unbiased, I would say most are not permitted to do so. You can not write an unbiased and accurate estimate if you are restricted by company criteria and guidelines that only allow the vehicle owner partial funds. The only reason a company appraiser should be allowed to inspect the vehicle is because the policy requires that they be allowed to inspect the damage.

Posted: 01 Mar 2008 08:38 Post Subject:

There was a study conducted by a collision repair group that took insurer estimates and compared them to final bills.

It's really hard to address comments like this when it's just that... a comment. I'm betting if I took a group of body shop owners and asked them if they felt underpaid, 100% would say as well. But the real theme of your post is that the insurance companies initial appraisals are almost always deficient. I have no problem with that statement whatsoever. It's probably true 90% of the time. But the _real_ question is -WHY- it's deficient and what is the -END- result. Almost all of the time they are deficient because there is no reason for the insurance company to guess as to what hidden damages exist. If customers walk into a body shop where they are paying the bill, they don't want to get an estimate for $500 and walk out with a bill for $1000. So shops take educated guesses on what needs to be done. Bottom line, an insurance has no need whatsoever to make these guesses. They write up what they see/know, issue the payment and then wait for a supplement. Mike, I'm sure you know supplements are paid each and every day by insurance companies. It does not mean the initial appraisal was intentionally lowered.

The only reason a company appraiser should be allowed to inspect the vehicle is because the policy requires that they be allowed to inspect the damage.

Or perhaps because they have no obligation to pay what one particular shop is going to charge? See, it works both ways. Insurance companies could ignore shops all together, just like your saying body shops should ignore the insurance company. At the end of the day, the how process comes to a halt. Thing is, insurance companies _do_ work _with_ body shops to make sure the process is as smooth as it can be.

Are you also saying that many body shops don't over charge on repairs? I think I'd be happy if you finally answered that question.

Examples... I inspected a SUV last week that had a dented lift gate. The shop wrote up replacement of 4 emblems. They were not damaged in any way. As I understand, sometimes the emblems cannot be reused. But until they are taken off, who knows? I guess the shop wrote them up just in case... but do you think they would have R/I'ed them and lowered their bill is they _could_ have been reused? Of course not. They would have put knew emblems on anyway. Now I wrote it up as RI... this was so the shop would try to reuse them if they could. If not, they just call me to let me know and I'd pay for new emblems. That is me, trying to keep the cost to what it _should_ be (as low as possible), still allowing the body shop to make the correct repairs, possibly creating a statistic that the insurance companies initial appraisal was too low, and keeping the body shop more honest. BTW - there were only 3 emblems on that lift gate, not 4. Also, the shop charged $40 labor and I pay $42. Some shops want $44. I pay $42. The shops that charge $44... they have a _choice_ (same as you and any body shop)... they can lowered their rate to the average of they can tell the customer they cannot do the work. Which gets me to my last point...

You say the insurance should not interfere with the body shops work. That is an easy statement to make... as long as all body shops are 100% honest and fair. Now go back and re-read that. Now... just one more time, re-read that. You think that is true? Just like insurance companies in some cases don't operate the best that they should, neither do body shops. Your posts indicate that all (I could even say most) body shops are 100% correct all the time and 100% honest and up front. If they were, I'd agree with _everything_ you've posted. But sadly... this is simply not the case. It's also not the case that OEM's charge a reasonable price for their parts. As I've said, without AM parts being _available_, OEM parts would cost twice as much (proven). You've also never answered by question as to if you want all carriers to only use OEM parts and have your insurance rates doubled. Everyone wants to eat their cake but no one wants to pay for it.

Let me just add a few comments... I'm mentioned before that the carrier I work for does not use AM parts. We do use PXN parts (for others, that's Parts Exchange New parts). I've saved my carrier a _lot_ of money just using those parts! I'm also sure a _small_ portion of that savings goes on to lower premiums. Why did those shops not even look for PXN parts? They _are_ OEM parts. Am I wrong in using those parts? I've not seen any argument against them yet. If it's okay to use these quality parts can I take the same stance and say that the body shops are just trying to rip people off by charging too much? That would be as much a blanket statement as your about insurance companies undercutting body shop bills. My main point is that this is not a perfect world. There are concessions made in _every_ business where two bodies have to work together. If one of those bodies does not want to work with the other, no one is forcing them... so they should have no complaints. It almost reminds me of complaints against Walmart in that they _demand_ lower prices from manufactures. Manufactures complain about this. Hmmmm, then don't sell to Walmart. So no problem really exists. You say Walmart controls the market? Then the consumers must like to buy from Walmart. Same thing with insurance companies. Insurance companies _do_ try to keep expenses down. Some times they get too aggressive. But it's not always the insurance companies fault. They are many other "hands stirring the pot". It's up to the insurance company to keep those people honest. They only way they can do this is by controlling the money being paid. Sometimes that will rub some people the wrong way. But to not look at the big picture is simply, wrong.

Posted: 01 Mar 2008 11:19 Post Subject: The study was done, I have a copy.

Would you like me to post the study here, or email it to you. It was a study conducted by the CIC. Collision Industry Conference made up of the collision industry and the insurance industry. The study is available but was not allowed to be officially entered into the conference because of insurance industry demands.

The prevailing competitive rate is 45.00 in my locality and I consider that appalling and at least 20.00 low. If shops knew how to job cost and know their true cost of doing business and reasonable profit margins built in, the prevailing rate would be 65 to 85 comparable to mechanic's rates or diesel truck rates.

If all shops truly charged what we consider reasonable for our labor, your employers would claim price fixing and collusion. You say you only pay what we ask for based on surveys, so if everyone raised their price to 65 per hour and we decided we wanted 35 percent markup on lkq parts which would only be a 25 percent profit margin that we typically receive on new or a/m parts, you would pay, because the survey results would reveal that rate. Yeah, when pigs fly!

In truth, drp shops are afraid to ask for price increase and told they will be removed from drp programs if they ask. They shouldn't even have to ask, but they made that choice by signing an agreement. I as an independent should not have to work for the same concession wages paid to drps. Court cases recently have revealed that insurers could be held to pay a higher rate unless they could prove that the charge for the labor was unreasonable just because it was higher than a prevailing rate in an area.

Posted: 02 Mar 2008 02:00 Post Subject:

The prevailing competitive rate is 45.00 in my locality and I consider that appalling and at least 20.00 low.

WOW! Are you kidding me? Based on what? A 100% profit margin? What are you paying your techs Mike? Is that 20buck an hour going to them?

As I've said, without AM parts being _available_, OEM parts would cost twice as much (proven).

Absolutely correct tcope, as I posted before, in the past year ALL US OEM parts vendors (GM, FORD, CHRYS ETC,) in my area are 'miraculously' matching the a/m parts! Explain that to me! I have a new oem cover for a list price of 200 buck, and a/m or reman for 125.00 ''some how'' the new oem vendor will match that a/m part price for the shops! Now we all know damn good and well they ain't taking a loss on any of their parts! So what is the hugely over inflated profit margin? They have been forced to charge a reasonable price/profit to sell their parts...Why aren't you mad at the OEM parts vendors for ripping you and the public and the ins carriers off all of these years?

Collision Industry Conference made up of the collision industry and the insurance industry. The study is available but was not allowed to be officially entered into the conference because of insurance industry demands

Come on the ins industry is now telling the CIC what they can and cannot show/discuss in one of 'their' conferences? I'm sorry, THAT'S what I want to see even more than the study.....

You say you only pay what we ask for based on surveys, so if everyone raised their price to 65 per hour and we decided we wanted 35 percent markup on lkq parts which would only be a 25 percent profit margin that we typically receive on new or a/m parts, you would pay, because the survey results would reveal that rate. Yeah, when pigs fly!

That's exactly what I'm saying. If the prevailing rate and markup were consistant. You can't just pull figures out of the air and think you're worth that....I think I'm worth about 150bucks an hour too Mike, but I only get about 28.00. What other repair industry makes (routinely) over 25% markup on parts?

In truth, drp shops are afraid to ask for price increase and told they will be removed from drp programs if they ask.

NOT TRUE NOT TRUE NOT TRUE! And how would you know anyway since you are not one. As a matter of fact, my largest shop just ask me last week when I thought another rate increase would be forthcoming (been about a year or so since the last one). I said, 'you know what I don't know let me find out' and I did! There will be a survey began this week. If that survey calls for an increase there will be one! I have not one shop I handle (i have seven presently) that is 'afraid' of anything with me or my company. We all have a terrific relationship based on our mutal customer. I'm sorry Mike but this was just an overly dramatic statement.

drp shops are afraid to ask for price increase and told they will be removed from drp programs

You prove to me one program or company that has instilled such great fear in the hearts of a shop that they won't even bring up the subject! geeeeeeze..... :roll:

I as an independent should not have to work for the same concession wages paid to drps.

You are correct then don't...and it's not the same concessions or rates as drp shops it's the prevailing rate in the area, of ALL SHOPS....

There was a study conducted by a collision repair group that took insurer estimates and compared them to final bills.

I don't need a study to believe this anyway, I'm sure it's true, if a vehicle isn't completely torn down, then you will not see the damage, many owners as you know especially if a vehicle is driveable will not want it rendered non-driveable for an inspection. As tcope stated and he is of course 100% correct the final anaylsis is the question...once the vehicle is in the shop and torn down then the adjuster comes back and writes and PAYS the supplement. what on earth is wrong with that? Is the end result not the same? What kind of a moronic person/company is going to write to replace a rear body panel because a bumper cover is shoved in if they can't see it? You and I both know, maybe it's not damaged at all, maybe it's creamed, maybe it can be repaired....Are you saying that these field inspections should just guess on the 'high' side? And hope that the owner or shop will reimburse them the over payment? THAT my friend is a joke and you know it.

The fact is like it or not, there are some insurance companies out there that are practicing bad claims handling, and there are some theiving shops as well. Neither are in the majority. The other fact is that MOST OF THE TIME, insurance companies/adjusters and shops get along just great, and come together to repair the vehicle the way 'it should be repaired'. Regardless of the ascertians made here. It is rare (in my 22 years working 'both sides') that a mutual agreement cannot be reached with the customer's interest at heart and in the for-front.

I don't understand though Mike why you fail to want to 'help' rather than 'hender' the situation. You have some valid points and I'll give you that, but it appears that you have zero desire to aid our 'mutal customer' instead everything the shop's do is right and the carriers are 100% wrong and the problem. Why is there no 'coalition' with the customer satisfaction truly at the heart of it? It appears rather that the bank accounts of the shops are the real motivator. Why not start some coalition to police your own industry. Why not put some effort into cleaning up the mess in your own industry? I'm serious, the 'bad' shops have hurt you way more than the insurance industry. Who is watching out for the poor consumer, regarding the shops? Who is making sure they are doing the right thing by the consumer? We have one ! DOI, to name one big one! Surely if your industry could remove their own black eyes, and clean up their own back yards, and all shops were run like yours there would be more credibility given to the shop's view/agenda. You and I both know I could fill this forum with shop horror stories and 'studys'. Just a thought, that 'some' of the energy spent on trashing the insurance industry could be well spent cleaning your own house.

Posted: 02 Mar 2008 06:10 Post Subject: I am sorry Lori, I misjudged you! You are ill informed

You operate in a very closed minded environment, you only know what your supervisors and trade journal authors want you to know. You do not operate a shop and you have no idea of what it takes financially to run a shop. Your industry has no business in my industry's business just because we have mutual customer. Just the same, I as a shop owner have no business in the settling or negotiating claims on behalf of consumers without being licensed as adjusters or by having a law degree. What I do have is a right to do is to conduct my business and determine my profits without your industrys heavy hand of suppression.

You evidently do not read my industry's trade magazines and do not have grasp on the severity of the impact of the impending financial future failures because collision people in my industry are just now beginning to realize the insurance companies are not our friends or partners. It's all about corporate financial gain for insurers and control of the consumer at the expense of the collision shop owner and technicians.

The fact is, that people are just beginning to realize the detriment they face when they allow the insurer to make repair decisions based on cost, much like physicians have come to realize. Manipulation of the collision industry and medical profession is all about controlling costs for the benefit of corporate coffers

It's laughable. shops nudge their labor rates up one or two dollars an hour and wait for the insurance industry to flinch in hopes they do not upset the applecart. The cost of supplies and materials have risen over 25 percent in four years and the average formula of hours times dollars to calculate compensation for those supplies and paint has not kept pace. The cost of these materials rises 7 to 10 percent annually and compensated rates are adjusted about ten percent bi annually.

The oem's are not stupid but they may be greedy. They will allow their sheetmetal, grilles and lamps to be copycated and fraudently passed off as equivalent to oem. They are happy to deplete their shelves and warehouses of sheetmetal that takes up space and investment by matching a/m pricing. When you can charge one thousand dollars for a sliding door that takes no more technology than making a hood that is sold for 350.00, it's smart business to make more on less. Why else would a hinge for half an upper or lower door cost 135.00 or a plastic moulding cost 300.00.

Shop owners are not even allowed to charge a surcharge for fuel prices for heating and electricity, but your average garbage truck business can add such a charge monthly. We're told that's overhead, just absorb it into your cost of business.

Lori, two business trade magazines you probably have never turned one page on have been reporting on the dwindling profits of shops and the demize of the promised beneficial relationship of drps and insurers have turned sour.

Need we even mention Allstate again and threatening to pull their good hands out of Florida, and how most major insurers treated policy holders in the gulf region. A lot of major insurers have an image problem with people as well as some shoddy body shop businesses. But that's okay, insurers can aborb that cost and run to the DOI for an increase in rates.

Posted: 02 Mar 2008 08:14 Post Subject:

Since this site is to provide information for consumers. I hope any consumer who read's this topic will think twice after they listen to the song and dance from their insurer about how they should use the insured's recommended shop. Every person who owns a vehicle should research and find a body shop that does good work and has a good reputation. Just like people have their favorite stores. They should have a shop they like and use that shop every time they need work done. It is the consumers choice to have their vehicle repaired where ever they want. If you have a accident and want your car to be fixed properly find a shop that has a good reputation, and goes by their own estimates. A good shop will disregard the estimate written by a insurer and write there own accurate estimate and explain the whole estimate to you and why they wrote what they wrote. Do not let your insurer force you to use their DRP shop. Choose your own shop you feel comfortable with.
Every topic Mike has mentioned on here is true. Any shop will agree on this. A insurer wants to fix your car as fast and as cheap as possible. A good body shop wants to fix your car the right way, with the right parts, and do a job they and you will be happy with. Who should you listen to? Please find a shop that you can count on anytime you need them. If you are loyal to them they will be loyal to you. Do some research about the body repair business and you will see everyone in it feels the same way. Most bodyshop websites have consumers forums where you ask questions. The site I go on has some great people that will give you good honest answers.
This post does not need to be quoted and chopped apart by anyone. This is for consumers to read and make their own decision next time they have a accident.

Posted: 02 Mar 2008 08:25 Post Subject:

The prevailing competitive rate is 45.00 in my locality and I consider that appalling and at least 20.00 low.


WOW! Are you kidding me? Based on what? A 100% profit margin? What are you paying your techs Mike? Is that 20buck an hour going to them?



So your saying that shops have no right or reason to charge 65.00? Please explain. Progressive used to raise my rates for no reason at all, but thats ok? Maybe you should go back to managing a shop and see how far that 45.00 a hour goes when your painting panels for 1 hour because of "blend within", and setting up and measuring for 2.5 on a machine that you just paid $60,000 for.

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