Growing Percentage of Body Shops Billing and Being Paid for Processing Total Losses

An increasing number of shops over the past several years have begun charging and being paid for the administrative tasks involved in processing total losses, according to the findings of a recent “Who Pays for What?” survey. The survey of more than 650 shops nationwide found that although some shops say they have never charged administrative fees to process total losses, that number has been dropping steadily over the past five years.

“Certainly, shops may agree to waive any such fees as part of a direct repair agreement,” said Mike Anderson of Collision Advice, who conducts the quarterly “Who Pays for What?” surveys in conjunction with CRASH Network. “But the process has continued to become more complex. It can involve more teardown, more research of OEM procedures, unloading or loading the vehicle to and from a tow truck, etc., and more and more shops cannot afford to perform all these tasks for free.”

Data from the “Who Pays for What?” survey this past summer shows that the percentage of shops that say they “never” charge to process total losses has steadily declined from 30% in 2015 to just 19% this year. The percentage of shops at least negotiating to be paid a fee to process these vehicles surpassed 80% for the first time this year, up from just under 70% in 2015. Of those negotiating to be paid, 63% report being paid “always” or “most of the time” by the nation’s eight largest insurers – up from less than half (46%) in 2015.

For the first time, the “Who Pays for What?” survey currently being conducted focuses on vehicle scanning and ADAS calibration. It also is collecting information on labor rates, including rates for aluminum repair work. It is open now through the end of October. To take the survey, click here.

Survey participants receive a report with complete survey findings at no charge, broken down by region, insurer and DRP vs. non-DRP. The report also includes analysis and resources to help shops better understand and use the information presented.

Anderson said the survey, which will take about 15 to 25 minutes, can be completed by anyone in a shop familiar with the shop’s billing practices and the payment practices of at least some of the largest national insurers. Each shop’s individual responses are held in the strictest confidence; only aggregated data is released.

The results of previous surveys are also available online here.