'Managed" Repairs - BodyShop Business

‘Managed” Repairs

“Freedom of choice just went down the toilet. Welcome to ‘managed care,’ collision-repair style,” says an Austin, Texas, shop owner about Texas Senate Bill 14 (which became law in ’03 and went into effect Dec. 2004). “The repair industry was blindsided. Nobody knew a bill like this was even being considered, let alone that it had passed and become law. Basically, any shop that’s not on direct-repair programs will be out of business in less than five years.”

I’d like to say this fellow is overreacting, but under the circumstances, I’m not so sure he is – unless the law gets repealed. This is America after all, and we have been known to pass illegal laws. But getting a law repealed takes money (read: lawyers, who cost money) and unity – two things this industry isn’t known for.

Because the bill’s been passed by the Texas legislature and signed on the dotted line by the governor, the only thing that’s standing between Texas independent shops and the legalized steering of consumers to DRP shops is … God help them … the insurance industry.

Among other things, this Texas “Insurance Reform” law gives insurers “Product Flexibility,” meaning that, for the first time, insurance companies can develop their own policy language instead of having to use a uniform policy. The policy language needs only be approved by the Texas Department of Insurance’s (TDI’s) legal department and it’s a done deal.

As of press time, 10 insurance companies had filed policy language changes with TDI. Some changes, in fact, may already be approved.

The scariest proposed change and of most concern to repair shops is:

“Policies may have a provision limiting payment for repairs unless repairs are made at a repair facility selected by the Company.”

“The shame is that steering rarely sends anyone to a top-quality shop concerned with the consumer,” says a Jefferson, Texas, shop owner about this proposed change.

Any TDI-approved changes will become effective by the insurer upon policy renewal, so consumers will find out (or not find out, depending on if they actually read their policies) when they get their renewal notice.

“Your legislature will ultimately decide how you can run your business,” says Jamie Alligood of Causey & Associates, which specializes in collision repair, auto glass and consumer-rights issues. Your fate is in their hands.

“The insurance companies certainly know this, and that’s why they work so hard and spend so much money finding and supporting lawmakers who will support their position.

“Most legislators know very little about autobody repair. The insurance industry will tell him or her that the laws they want passed are the only way to protect the public.”

And with no input from the collision repair community, legislators are clueless.

“I called Democratic Sen. Gonzalo Barrientos office and spoke to one of his aids,” says the Austin shop owner. “I told the aid that Sen. Barrientos signed the bill and explained what some of these policy changes could do. The aid said, ‘He signed it but didn’t know everything that was in it. The bill was 100 and some pages.’ ”

And who wants to be bothered reading all that pesky text when lobbyists for the insurance industry are telling you it’s a great bill?

Says Alligood: “I cannot over-emphasize the importance of personally knowing your legislator. Often a bad law can be stopped before it becomes law, and it’s much easier than changing it after it’s been passed.”

So where was the collision repair community before this bill became law?

The Automotive Service Association doesn’t support this new law but was forced to prioritize, says ASA’s Washington D.C. representative Bob Redding. “We were aware of the initiative, but at this time, didn’t have a Texas affiliate, and this was happening at the same time as the insurer-owned shops. Getting legislation passed in Texas prohibiting insurer-owned shops was our priority. When you have limited resources, you have to make choices.”

No one (except for maybe the insurance industry) has unlimited resources. But if shop owners would get involved in their local associations, pull their resources and get involved politically, the industry could be a much better place. Until then …

“Screwed by the politicians again,” says a Dallas shop owner.

Founding father (and politician) Benjamin Franklin said the same thing – but a little more eloquently – more than 200 years ago: “No man’s life, liberty or fortune are safe while our legislature is in session.”

Georgina K. Carson, Editor
[email protected]

To read about the Texas “Insurance Reform” law, go to http://www.tdi.state.tx.us/commish/talkauto.html

You May Also Like

Sticker Shock at the SEMA Show

This year’s SEMA Show held a new surprise for me — a secret drop-off at our booth in the form of a mysterious sticker.

There are always surprises at the SEMA Show, which is one reason why it’s such a special event. New faces to meet, old faces that you haven’t seen in a long time with which to reunite, new technological wonders … the list goes on and on.

This year held a new surprise for me, however — a secret drop-off at our booth. Visiting the booth one day to make sure the magazines on display were still neat and tidy, I noticed a roll of stickers on the table. Upon closer inspection, I saw that the stickers read: “Collision Repair Equal To Mechanical Repair Rates: Why Not?” And there was also a mysterious symbol that my wild imagination took to be the logo of some secret society. But it wasn’t so mysterious after all; the letter “Y” and the drawing of a knot was a visual representation of: Why + Not. Haha, very clever!

Keys To Making 2023 A Huge Success For Your Auto Body Shop

Stopping daily work to work “on” your business instead of “in” your business is essential in order to deliver change in the new year. 

Auto Body Consolidation Update: What Will 2023 Bring?

The bull market of consolidation is expected to continue in 2023 even amidst high inflation, rising interest rates and other challenges.

The Great Awakening: Collision Repairers Taking a Stand

Many repairers are now taking a stand, realizing they cannot conduct business the way they used to.

CARSTAR Fort Collins: Process Produces Performance

The new facility that CARSTAR Fort Collins moved into was designed with organization and performance in mind.

Other Posts

Are Collision Repairers Their Own Worst Enemy?

It’s always been easy for repairers to see insurers as the bogeyman that causes all of their problems, but insurers are merely taking advantage of repairers’ lack of business knowledge and acumen.

Are You Ready to ROCK in 2023?

Do you know a “rockstar” in the automotive aftermarket? Then it’s time to nominate them as a Vehicle Care RockStar!

BodyShop Business 2022 Executives of the Year

This year’s Single-Shop award winner is Michael Bradshaw of K & M Collision in Hickory, N.C., and the Multi-Shop winner is Matt Ebert of Crash Champions.

Conducting Collision Business: It’s a New Day

The goal is not to declare war against insurers; it is to declare independence for your organization so that you’re able to provide the highest level of service to your true customers.