The Alliance of Automotive Service Providers of Massachusetts (AASP-MA) announced that a state house hearing on labor rate reimbursement for collision repairs was held Jan. 25.
At the Special Commission on Auto Body Labor Rates, more than 29 Massachusetts auto body shop owners voiced concerns about the collapse of their small family businesses. Many noted their frustration and may take action, including removing themselves from a corrupted referral list system maintained by insurance companies.
At the four-hour-plus hearing, Brian Bernard, owner of Total Care Accident Repair in Raynham, one of the independent collision center owners, said the $40-per-hour reimbursement rate is the lowest in the nation and falls far short of covering body shop owners’ labor, equipment, training and repair costs. As a result, many consumers have to pay the difference out of pocket, he said.
Bernard said the labor reimbursement rates paid by Massachusetts auto insurers have stayed the same for 11 years. The rates only moved $10 in nearly 34 years. Since 1988, the labor rate has increased $10 while the consumer price index (CPI) has increased 137.7% ($71.30) and insurance premiums have increased 254%.
Additionally, advanced technology has resulted in cars becoming far more complex and expensive to repair. Additional training and equipment have forced Massachusetts auto body shop owners to invest far more to get paid less. The low labor reimbursement rates have burdened many consumers with out-of-pocket repair costs despite paying high insurance premiums, Bernard said.
“It’s tremendously unfair to consumers who pay thousands of dollars in premiums to have their insurance companies tell them they’re not going to cover the cost of their repairs,” said Bernard. “We’ve done our best to bring attention to this issue, but at this point we need to make it clear to insurers and consumers that we cannot do this work at the current reimbursement rates.”
In general, collision shop owners from throughout Massachusetts urged the commission to support legislation, such as H.1111, that would increase the hourly rate over a two-year period and then tie the rates to regional price indexes moving forward.
“We’re hoping the commission leads the way in bringing Massachusetts into line with other states so that consumers are treated fairly and auto body shop owners are reimbursed at rates similar to their peers across the country,” said Bernard. “The labor rates today in Massachusetts are absurd and unsustainable.”
For more information on the AASP-MA, visit aaspma.org.
