The labor rates that insurance companies pay body shops to repair damaged vehicles aren’t high enough to cover the cost of repairs, according to a recently released survey of nearly 300 Florida collision repair facilities.
The 2012 Florida labor rate survey, commissioned by the Florida Autobody Collision Alliance (FACA) and conducted by CSi Complete to ensure unbiased data collection and reporting, shows that while materials, labor and equipment costs continue to rise steadily, insurance company labor rates are not keeping pace and, in many areas, have not increased in nearly seven years.
Paint and material costs, says FACA, increase each year – sometimes twice in a year. Paint costs rose for body shops by at least 3.9 percent in 2011, according to FACA, with some shops seeing up to a 7.8-percent increase.
The respondents, 82 percent of whom were independent shops, turned in an average body labor rate of $44.14 and paint material rate of $25.96.
“FACA is grateful for the participation of so many shops, and we’re
pleased to be able to provide this information to the collision repair
industry,” said Cathy Mills, FACA’s executive director. “But to most of
us, this is not news – we’ve seen costs rise and margins shrink year after
year with no movement on labor rates. Without reasonable and regular increases in the amount insurance
companies pay to repair vehicles, body shops are finding it harder to
recover repair costs. Shrinking margins make it much more difficult to
attract and retain skilled technicians or to keep pace with the advanced
equipment and training needed to work on today’s newer vehicles."
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