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Reader’s Choice: Capping Paint and Materials

“Legally speaking, how can insurance companies limit paint and materials charges?”


Barrett has authored numerous industry trade journal/magazine articles, including several cover stories for BodyShop Business. Having grown up in a family-owned collision repair business and owner/operator of two successful collision repair facilities, his ongoing efforts as industry speaker and repairer coach-consultant are geared toward educating professionals and consumers to achieve equally successful resolutions to automotive-related property damage issues. Such issues include proper and thorough repair, reasonable repair profitability for repairers as well as equitable claim settlements for both claimants and the responsible/paying parties. ADE offers numerous professional services nationwide.

e who are perfectly capable and willing to take advantage of the repairer’s lack of business acumen. Insurers are led by college-educated experts in various fields including finance, business of insurance, banking, etc., many with master’s degrees in business and other disciplines.

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As an example, Edward B. Rust, Jr., the current chairman of the board and CEO of State Farm, holds both a juris doctor and master of business degree. I can assure you that those under his direct leadership are equally educated and trained, and it shows in the long-term success of the company, just as it does in others we deal with on a regular basis such as Allstate, GEICO, Farmers and others.

Furthermore, insurers can seek the expertise they may not possess in-house outside through the services of corporate consulting companies. Professional consultants enable the insurers to have a better understanding of their existing markets, proposed markets, underwriting practices, claims practices, the collision repair industry’s practices and the consumer. Insurers need to know what the near and distant future trends will be, how they will impact their business and how they can best capitalize from them. Insurers know more about repairers and consumers than we know about ourselves…it’s their business to know what people like and don’t like, what they fear and how to best capitalize on that fear.


Information is the insurer’s base business. The acquisition of viable and accurate information is what enables them to take the risks they take and allows them to be profitable and grow while remaining competitive. It also allows insurers to determine the strategies they’ll put into place from marketing their company and its image, and determine their risks and pricing of their product. The strategies for success are disseminated from the company’s leadership all the way down to the adjuster and appraiser in the field who interact with consumers and repairers to resolve their claims.


So again, it’s not really a legal issue until the repairers and their customers threaten to make it one to put a stop to the abuse…it’s merely one entity in a proposed position of power taking advantage of another’s weakness – simply because they’re continuously being allowed to.

For the truly independent repairer, the logical choices as I see them are:

● Continue to do as you have always done and expect it to get worse.
● Make a commitment to acquire the knowledge and business acumen needed for you and your business to thrive…not merely survive.
● Emulate other successful businesses and strive for optimization in all facets of operation.


Barrett Smith, AAM, is the founder and president of Auto Damage Experts, Inc., which has been providing automotive inspection and expert legal services nationwide since 1997. He can be reached at (813) 657-6705 or [email protected].

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