It’s legal for insurers to tell consumers about preferred shop programs. Problem is, if you’re not one of the shops on these programs, you likely won’t get the work. Fight back by developing other sources of referrals that steer consumers to you.
While insurers are permitted to make consumers aware of the "programs it has developed to help them," they’re not obligated to make a full disclosure of the negative consequences inherent in their programs. And it’s highly unlikely that any insurer will ever tell the consumer:
"Our shops have agreed to repair your car any way we tell them, even if it involves the use of imitation parts or unapproved repair techniques, voids your factory warranty, causes extensive loss-of-value to your car or compromises passenger safety. Oh yeah, and our shops have agreed to keep you ‘blind’ to any repair defects or hazards."
Personal freedom of speech is a constitutional right. Corporate freedom of speech is a related but separate animal. There are unique distinctions between personal and corporate freedom of speech – with corporate freedom of speech being more restrictive. Insurers making consumers aware of "programs it has developed to help them" is permissible. However, making disparaging remarks about another business entity in an effort to interfere with that other business relationship is not protected as freedom of speech. It is, in fact, restricted by the Uniform Commercial Code.
The lines between what may or may not be said or what must or must not be said are being drawn as we speak. For now, shops will have to deal with insurers being able to promote "the programs it has developed to help them[selves]."
How? Well, for one thing, insurers aren’t the only source of referrals to your shop. There’s advertising, public service involvement, prior customers, attorneys, the Internet, relationships with mechanical repair and/or towing facilities, affiliations with national pro-consumer efforts, etc. Shops should also think outside the box as it relates to the utilization of the talents they possess and services they could provide to enhance their revenue stream.
What I’ll be presenting here are a few ideas that you can use individually or selectively blended together to form a comprehensive marketing/management package, depending on your experience, comfort level and local market conditions.
Attorney Referrals
The first idea I’d like to discuss is relationships with attorneys. Yea, I know, but read on anyway.
Open your local Yellow Pages, go to "Attorneys – Personal Injury" and start counting. Do you get the feeling there’s some serious competition among personal injury attorneys? (Note this on your fact sheet.)
Let’s take a moment for me to share a personal observation based upon 35-plus years as an adjuster:
An overwhelming percentage of injured third-party claimants express a disproportionate concern that their car "will never be right." Logic would dictate that cars are just a hunk of sheet metal that can be replaced, while the human body isn’t quite so replaceable. Yet I’ve stood at the bedside of a third-party claimant in a hospital ICU where the odds of him seeing the next sunrise was an even-money bet and his primary concern was whether the frame could be fixed or the paint would match. Screwed-up priorities to be sure, but a prevalent attitude nonetheless. (Note this on your fact sheet.)
Perhaps you may have even noticed some personal injury attorneys advertising in your area using the "Unhappy with how the insurance company treated you on your vehicle damage claim? Guess how they’ll treat your injury claim. Come see us, and we’ll make them pay" approach.
Personal injury attorneys track their clients hot buttons that brought them in the door. More than 30 percent of clients come to attorneys in the hopes the attorney will help keep them from being screwed on their vehicle damage claim. For each one of these clients he accepts, an attorney turns away three others who called about vehicle damage claim issues but had no viable personal injury claim. (Note this on a separate fact sheet.)
Some attorneys, in order to sign up personal injury clients, will agree to "attempt" to resolve the property-damage claim for their clients, too. Have you ever known an attorney who could distinguish between a strut or a shock? How about one who understood proper repair techniques? Or even one who was informed enough to see through the insurers’ DRP propaganda? Probably not!
Personal injury attorneys typically regard property-damage claims as an unproductive source of irritation. And they usually only agree to get involved in it to sign a personal injury client. I’ve yet to meet the first 200-pound attorney who could go head-to-head with a 110-pound claims clerk spewing property-damage claim word tracks at him.
This isn’t to disparage attorneys. It’s simply the truth. Attorneys haven’t been trained in this area of discipline, nor do they want to be.
The typical Personal Injury Contingency Fee Representation Agreement entitles the attorney to a percentage of the personal injury claim recovery. The attorney collects nothing of the property-damage claim. However, the attorney does recover any file expenses paid out. (Note this on your fact sheet.)
You probably already know more about handling property-damage claims than 90 percent of the personal injury attorneys in your market area. (Note this on your fact sheet.)
Now let’s review your fact sheet:
- Many law firms are competing for personal injury clients.
- Personal injury clients want help with property-damage claims.
- Personal injury attorneys turn away many more consumers seeking help on property-damage-only claims.
- Personal injury attorneys regard property-damage claims as unproductive, non-billable hours.
- Most personal injury attorneys don’t know whether to scratch their watch or wind their butt on property-damage claims.
- P/I attorneys collect nothing on property-damage claims but do recover file handling expenses.
- You already know more about property-damage claims than 90 percent of your local personal injury attorneys and can learn more.
Are you beginning to see an opportunity here? So did I – back in 1986.
When convinced of the potential benefits of delegating the property-damage claims handling to an independent specialist, attorneys will gladly pay someone else to handle the property-damage claim and then recover that expense from the personal injury settlement. By doing this, they’re able to "sign" clients away from other attorneys who don’t offer property-damage claims assistance, while spending more of their time doing what they know how to do. They avoid property-damage-claim frustrations. Their staff becomes more productive. And they recover their costs on the back end.
Imagine for a moment …
The personal injury attorney has delegated his authority to handle the property-damage claim to you. You have the full authority of decision-making and negotiation. The adjuster is told he must deal with you personally. You pick the repair shop. You negotiate (or dictate) the scope and method of repairs. You define any post-repair diminished value. You negotiate any total-loss settlements. You control disposition of the salvage.
Interesting, huh?
This is not theory. I made a comfortable living doing just this for years (before some fool stuck a wheelchair under me and dragged me out of the office). A gross annual income approaching six figures is a reasonable expectation – plus any profit realized from repairs you assign to your own shop.
And don’t miss out on collateral opportunities here. Experience has taught us that the third-party insurers will be inclined to engage in extraordinary efforts to thwart your activities.
One of the first tactics they’ll attempt to impose is putting inappropriate limits on the rental vehicle. When we first encountered this tactic, we said "Thank you!"
The third-party insurer "pulled" the direct-bill rental car, so we put the claimant into a rental vehicle with the agency billing us direct Ñ and we added a $10-per-day administrative fee. We then sent our own billing to the insurer reflecting the $10-per-day markup, applied whatever they paid to our gross rental charges and took a settlement lien for the balance. We made a profit on the rental, and the attorney’s client was still able to commute to work and keep his treatment appointments. Everybody was happy but the third-party insurer.
After awhile, third-party insurers stopped pulling direct-billed rentals from our clients.
The delightful aspect of this venture is the minimal overhead needed to get started and maintain it. Some printing and legal fees (your own company attorney) and a separate phone line, and you’re on your way. Lest you have any doubts about the concept, consider this: I started this very venture in 1986 Ñ dba J.D. Howard & Associates in Arizona Ñ and my former partner is still making a comfortable living at it today.
Aftermarket Accessories
I’m talking ground effects packages, lights and bars, custom grilles, graphics, roll bars, running boards, bed covers/liners, custom rims, tinting, stripping, custom interior trim packages, etc. I’m talking post-production customization here.
When was the last time you saw list prices and flat-rate times for ground- effects components, fog lamps and 17-inch AMG wheels for a Mercedes Benz SL/Roadster? Or for a custom grille, winch, tubular step bars and interior laminates for an F-150 in your Mitchell or ADP programs? Chances are you haven’t. The only time you’ll be dealing with insurance companies on these issues will be for replacement of damaged components. And that’s when the adjusters will be coming to you to ask for prices.
One of the first things you’ll notice when you expand into this area is that your paint department will always be busy.
Explore the opportunities available in selling and installing custom aftermarket accessories. To learn more, I suggest you talk with those who’ve already taken this path: Gary Hall at Hall’s After Collision Center in Rock Falls, Ill., e-mail [email protected]; and
Matt Casiano at C&D Auto Body in
South Hackensack, N.J., e-mail
[email protected]
Both gentlemen have developed their own custom aftermarket accessories businesses and have volunteered to make themselves available to counsel other readers of BodyShop Business.
Vehicle Inspections
Virtually every collision professional reading this article (with more than six months experience) knows there are vehicles in their market area that have been vandalized by shoddy repairs. Some vehicles have been so severely compromised as to present a clear and present danger to their own occupants, as well as the occupants of other vehicles sharing the roadway. There’s an opportunity here!
Quality-motivated and consumer-oriented collision repair facilities should take an initiative in their community to provide free infant car seat inspections (FYI: You must be nationally certified to install child safety seats. For information, call the National Safety Council at (202) 296-6263 or visit the National Highway Traffic Safety Administration at www.nhtsa.org.). This is a service to the members in your community (potentially a life-saving service) and increases your shop’s door traffic.
Consider offering free post-repair inspections of vehicles repaired at other facilities in an effort to ensure vehicle safety. If the post-repair inspection reveals no safety defects, the inspection is free; if safety related defects are exposed, a nominal charge is made for a written report.
SafeCheck recently launched its vehicle inspection program in concert with CarFax. Tens of thousands of consumers per day use the Free Lemon Check feature of CarFax to verify the history of their currently owned vehicles or of vehicles they’re considering purchasing. When CarFax gets a hit on a VIN, consumers are referred to the SafeCheck Web site for a potential SafeCheck follow-up inspection. For information on becoming a SafeCheck facility in your market area, contact SafeCheck at [email protected]
Consumer Advocacy Efforts
Consumer-oriented shops, dedicated to providing thorough quality repairs, should consider involving themselves with national insurance consumer advocacy efforts that promote their shop directly to consumers.
Unfortunately, there aren’t many out there.
I do, however, happen to know of one such effort. In fact, it’s a personal favorite (maybe I’m biased; I founded it). For those of you wishing to know more, you can reach me at [email protected]
Happy Birthday [INSERT CUSTOMER’S NAME HERE]
Sometimes, the best ideas are the simplest. One of the most common tools used by insurance agents to illicit loyalty and a feeling of trust is the birthday card. When a consumer applies for insurance, he gives his date of birth. The agent then diaries that date of birth for the sending of a birthday card. The card usually reminds the recipient to check to see if his driver’s license is due to expire.
Shops should use the same technique. Require personal ID when accepting a payment, completing a repair order or accepting an authorization. Then diary their date of birth for a birthday card from your shop.
Also keep track of when the repaired vehicle was returned to the owner. Diary that date and send a "born again" birthday card to the vehicle.
Include a free car wash coupon in both cards. You can also offer a free "pre-natal" inspection of any expectant new vehicle additions to the family.
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Pick-N-Choose
These are just some of several efforts that shops can employ to take (or take back) control of their own destiny. Lots of other ideas are out there, too Ñ I just can’t include them all here.
You should also give serious consideration as to what, if any, trade association(s) your shop should support. Among those I’d seriously consider are the Alliance of Automotive Service Providers (Scott Franzmeier – (651) 265-7853, [email protected], www.autoserviceproviders.com the Coalition for Collision Repair Excellence (Tony Lombardozzi or Lou Russo, (877) 700-7743; [email protected]; www.theccre.com ).
For those of you wanting to gain input from other shop owners on these (or any other) ideas, check out www.ProDiscussions.com. Someone out there has faced the same problems in a market similar to yours and wants to see you succeed.
Good luck!
Writer Dennis Howard is a retired adjuster continuing his consumer advocacy efforts from a wheelchair in his home in Branson, Mo. He received his paralegal certification in 1974 after having spent two years as Defense Litigation Supervisor for TransAmerica Insurance Group (now TIG). Howard founded the Insurance Consumer Advocate Network in 1994 and took his efforts online in 1997. The iCan Web site can be accessed at www.iCan2000.com. Howard also owns an industry-friendly discussion board at www.ProDiscussions.com.
