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At the Collision Industry Conference (CIC) meeting in July, Georgia Collision Industry Association (GCIA) Executive Director Howard Batchelor discussed the results of a labor rate survey of collision repair facilities in the metropolitan Atlanta area.
The survey was the association’s fourth annual one, and Batchelor said he believed the results he received were the best yet due in part to a change in strategy. In past years, the survey had focused on shop size, number of stalls, number of techs, etc. This year’s survey focused on labor rates and categorized shops solely by their annual gross sales: $2 million plus, $1-$2 million, $500,000-$1 million and $500,000 or less.
Shops were specifically asked for their non-DRP or posted rate “the rate you would charge a cash, walk-in customer,” said Batchelor. A postcard with a link to GCIA’s website where the survey could be filled out was mailed to over 650 shops. Approximately 137 surveys were filled out online, and 154 were received through the efforts of a call center.
For the over $2 million category, the online survey results led to an hourly labor rate of $43.11, while the call center’s results led to $42.58.
“As to why there was a difference, we think some of the phone calls maybe weren’t getting to the right people, like perhaps an estimator or receptionist, whereas those who filled out the survey online were actual shop managers,” Batchelor said.
The purpose of the survey was to get an accurate non-DRP average labor rate and present the findings to the Georgia Insurance Commission and also to area claims managers.
“We found that labor rates increased 3.15 percent this year, which doesn’t even cover the cost of living increases,” said Batchelor. “The letter we’re drafting right now and plan on sending to all claims managers in the metropolitan Atlanta area will validate the results we came up with. We have four years’ worth of data now, and these surveys were conducted by an unbiased third party.”
The letter, Batchelor said, emphasizes that the findings do not reflect a contract rate between a shop and an insurer but the posted rate that the shop would charge a customer whose insurance company has no relationship with the shop.
The GCIA met with the five candidates currently running for the position of insurance commissioner in March to educate them on the issues facing collision repairers. Last June, GCIA met with them again to discuss the possibility of setting up a committee to survey labor rates in the state of Georgia, and according to Batchelor, the majority of the candidates were agreeable to that. Batchelor said the GCIA will follow up with that request in November.
“Is this a problem that can be solved legislatively? We’ll have to wait and see,” said Batchelor. “With the previous insurance commissioner, we didn’t have much success.”