Florida Collision Repairer Gets Progressive to Cover Short-Pay

After filing an individual lawsuit on behalf of his customer against Progressive for the insurer’s short pay of “necessary and reasonable” charges, Collision Concepts owner Eddie Quintela of Delray Beach, Fla., has announced that Progressive has agreed to pay the shortfall.

Quintela received word from his attorney, David Weiss of Pembroke Pines, Fla., this week that Progressive had agreed to pay the $950 rather than go to court. The settlement amount represented previously denied labor operations, labor rate differences, paint and materials, and mechanical labor rate vs. body rates as well as attorney fees and litigation costs.

”Our customer authorized us to file the lawsuit on their behalf due to their insurer’s failure to provide them proper consideration for the rates and allowances which we, as their repairer, deemed to be reasonable and necessary,” said Quintela. “Our customer is thrilled at the settlement and very appreciative of our efforts to assist them in this ordeal. Our customer has received a high quality repair, our company has been compensated fairly for our efforts, and the insurer has paid no more than reasonable and necessary costs. I see it as a win-win-win for all. I just hope we don’t have to go through litigation each time as we too wish to keep insurance costs down, and it would be nice to see Progressive and other insurers avoid the legal costs involved and simply serve the customer properly and thoroughly. I would imagine this would improve their customer satisfaction and retention as well.”

Quintela added, “Special thanks to Barrett Smith of Auto Damage Experts, Ray Gunder of Gunder’s Auto Center and Attorney Brent Geohagan for their legal seminar, which helped educate us and our attorney on the process, and in their ongoing efforts, support and friendship.”

Article courtesy of http://www.bodyshopbusiness.com/Article/104442/florida_collision_repairer_gets_progressive_to_cover_shortpay.aspx

NHTSA finalizes rule for airbag switches

Sept. 6, 2012—The National Highway Traffic Safety Administration (NHTSA) has extended its rule for retrofitting on-off switches on vehicle airbags, according to an announcement from the Automotive Service Association (ASA).

NHTSA’s current regulation allows automobile dealers and repair businesses to install retrofit on-off switches for airbags in vehicles made prior to Sept. 1, 2012. The agency’s new rule extends the ability to retrofit vehicle airbag on-off switches for three more years through Sept. 1, 2015, according to the ASA.

The NHTSA’s new rule is effective immediately. FenderBender

California insurers testify against proposed regulations

Aug. 16, 2012—The California Department of Insurance has proposed new regulations that could hurt auto insurers and consumers, according to a statement from the Association of California Insurance Companies (ACIC).

New regulations proposed favor body shops and original equipment manufacturers (OEM), which could increase insurance premiums, according to the ACIC, which testified against regulations REG-2011-00024 at a hearing last week at the California Department of Insurance in Sacramento.

According to the ACIC, the regulations would include the following requirements:

-Insurer estimates for repairs would have to align with commonly accepted collision industry standards.

-Insurance companies would pay costs of inspections and tests of non-OEM replacement crash parts.

-Insurers would be required to stop using non-OEM parts if they know the parts are not equal to OEM parts. The insurance companies must then contact the estimating software provider, and request that the part get removed from their list, according to the ACIC. If the part were defective, then the certifying entity and the distributor would have to be notified, as well.

“These regulations essentially allow the auto body repair shops to ‘name their own price,’ charging whatever they want for auto repairs and insurers will be required by these regulations to pay,” said Armand Feliciano, ACIC vice president. “Insurers pay for approximately 90 percent of the auto body repairs in the nation. The current free market system provides checks and balances by allowing the parties to work together to determine prices for auto repairs and parts—these regulations will undermine insurers’ ability to manage costs and basically provide auto body shops a blank check. These regulations completely ignore the fact that auto body shops are vendors with a financial stake in the system, not consumers. It is not the role of the insurance commissioner to interfere in the free market system and propose regulations that will financially benefit one party—auto body shops—at the expense of policyholders.”

Above article courtesy of FenderBender

CRH response:

It is my opinion (and many agree) this is a good thing for the industry, Insurers have been stomping on shops and imposing their will for way to long and what I began saying 12 or 15 years ago “There will someday be a revolution in the industry” is starting to happen.

Minnesota Court Awards $157,851 to Glass Company for Underpaid/Unpaid Claims from Progressive
April 17 2012

GlassBYTES has reported that the Minnesota Court of Appeals upheld a decision that gave Rapid Glass, an automotive glass repair and replacement company, $157,851.46 for 580 underpaid and unpaid claims from Progressive. The court ruled that the glass company’s charges were fair, reasonable and competitive.

Rick Rosar, president of Rapid Glass, told GlassBYTES, “The windshield has become an integral part of the vehicle’s safety system. It is not a place to cut corners when a windshield needs to be replaced…”

The court said the dispute was whether Progressive satisfied the contract by paying “the amount necessary to repair damaged property to its pre-loss condition.”

“[Progressive] was not required to interpret the term ‘necessary’ because the contract provided the definition…,” the court wrote in its decision. “Under the terms of the contract, ‘necessary’ means ‘a competitive price that is fair and reasonable within the local industry at large.’”

See full article here

National News
Report: Some Insurers ‘Low-Balling’ Auto Insurance
Claims for Bodily Injury
December 29, 2010

Some insurance companies that use computerized systems to process their claims are making unfair, “low-ball” claims offers to people injured in automobile accidents, according to a consumer advocacy group.

The Consumer Federation of America (CFA) is warning Americans that Colossus software and other similar programs used by insurers evaluate general damages for many bodily injury claims such as pain, suffering and anguish, but fail to estimate “special” damages such as past or future bills related to losses and reductions in wages or liability-related questions, or issues like the credibility of witnesses.

Advising consumers to protect themselves against underpayments, J. Robert Hunter, CFA director of insurance, said,
“Consumers should be very vigilant when dealing with automobile bodily injury claims generated by computer programs.”
He said insurers can adjust their computer systems to generate claims’ ‘savings’ without adequately examining the validity of each claim.
When adjusting a bodily injury claim, an adjuster typical sorts through medical records and determines which of the approximately 600 Colossus injury codes best reflect the bodily injuries sustained by the consumer, according to CFA.

Depending on the severity value accompanying the injury code and dollar value that has been assigned by the insurer for each severity value point, the software provides a dollar value range to the adjuster for general damages.

“Some insurers also can tune the programs so that the claims that are made are ‘low-balled’ to save costs, even if a higher offer may be justified for some consumers. Further, adjusters sometimes receive incentives for settling claims at or near the range stipulated by Colossus,” CFA said.

Insurers that CFA says use Colossus include: AAA Mid=Atlantic, ACE INA, Allstate, American Family, American National, Atlantic Mutual, California State Auto, CAN, Grange, Great American, Hartford, HDI, Horace Mann, ICW, Motorists, Nationwide, Ohio Casualty, Safeco, State Auto, USAA, Utica, Westfield, White Mountain and Winterhur Swiss.

Insurers that use IQ, a similar software, include Allianz, Fireman’s Fund and GEICO.
Insurers that use COA, a similar software, include Automobile Club of CA, Liberty Mutual and Progressive.
CFA is recommending consumers protect themselves from unjustifiably low claims’ offers by:

• Find out if the offer is generated by a computerized system like “Colossus.” Allstate is required to disclose this information, but disclosure is voluntary for other insurance companies.
• Ask to see the high and low offers generated by the system.
• Do not accept any offer less than one in the “high” end of the range.
• If the insurer does not agree to an offer at the high end of the range, consider filing a complaint with the state insurance commissioner or seeking legal help.

A copy of CFA’s complete consumer alert is available at www.consumerfed.org/pdfs/Claims_Consumer_Alert_12-8.pdf.
Report: Some Insurers ‘Low-Balling’ Auto Insurance Claims for Bodily Injury http://www.insurancejournal.com/news/national/2010/12/29/116020.htm?
1 of 2 12/30/2010 8:35 AM

I was reading Body Shop Business this evening, yes while many other people are thinking about the shopping and gifts and getting over their food comma from Thanks giving dinner people in this industry continue on.

You see Collision repair is not something you leave behind at 5:00

Why it’s important for some AM parts to be CAPA certified.
Video courtesy of CAPA.com


A little more on new OEM replacement parts
The article in question was discussing a study that was released in regards to the quality of the replacement parts to repair your vehicle after an accident, this particular study was about front bumper reinforcements.

This study showed that out of four parts tested each one differed from the other in weight, thickness, tinsel and yield strengths.

The parts supplier said “this proves equivalency has an acceptable range variance”

Also tested were various parts that were randomly chosen, OE parts from multiple lot numbers, years and manufactures, from production parts to current service parts and found there was a definite range in parts.

Material selection, the economy and the volatility of the metal market all play a factor  in the end result.
Now this is not implying these parts are inferior in any way, I am just putting this out there to inform you, the consumer, that even when your vehicle is repaired with brand new OEM replacement parts there are sometimes differences in the parts put on your vehicle compared to what was on your vehicle prior to your accident even if it is a factory OEM part.

Auto Safety – Size, Weight, Active Safety, Passive Safety, SUV Safety, Unsafe SUVs, deadly motor vehicles

Auto Safety – Size, Weight, Active Safety, Passive Safety, SUV Safety, Unsafe SUVs, deadly motor vehicles

Safety – is divided into three categories: the size and weight of a vehicle, passive safety features that help people stay alive and uninjured in a crash, and active safety features that help drivers avoid accidents

Larger, heavier cars with poor ratings may easily produce better results than smaller cars with good ratings.  In addition to a car that crashes well (passive safety), you should look for a car that can avoid a crash altogether (active safety).  Keep in mind that all of this testing was done with test dummies wearing seat belts and shoulder harnesses.  Without them, a 15 mile per hour crash could prove fatal.

Size and Weight Matters – All cars must meet US Department Of Transportation standards for crash-worthiness.  Larger and heavier cars, however, are usually safer in a collision than smaller ones.   In relation to their numbers on the road, small cars account for more than twice as many deaths as large cars.  If a heavier vehicle collides head-on with a lighter one, the lighter vehicle and its occupants will suffer substantially more damage.

ABPA refutes claims that aftermarket parts are unsafe 3/18/2011
FenderBender _ ABPA refutes claims that aftermarket parts are unsafe

This reminds me of my younger brother when he purchased a brand new 95 Mustang GT, he was bragging about all the specs and he compared his 95 GT to the late 60’s and early 70’s muscle cars.
I told him everything looks good in black and white but in a real world situation I’ll put my money on the 70 HEMI Cuda.

It’s my opinion the same could be said for the testing of some AM parts, I have been in this Industry over 30 years and I can say from my experience there is a big difference in some of the parts out there.

How the Japan disaster can effect collision repair.

CCC outlines potential ramifications of Japan disaster on collision repair

Jake Weyer

April 20, 2011 — The March 11 earthquake and tsunami in Japan has had a significant impact on vehicle production and could eventually lead to several problems for the automotive insurance and collision repair industries, according to a new report from CCC Information Services.

Lead Industry Analyst Susanna Gotsch, who compiled the report, said vehicle production dropped by an estimated 516,000 units during the first month following the disaster; 260,000 of those vehicles were Toyotas. Toyota also announced that it would keep production levels at 50 percent through June, resulting in further production losses.

Shortages of electronics and resin-based products have also slowed production for Nissan, Honda, Suzuki, Subaru, Toyota and Fuji Heavy Industries. U.S. production has also hit snags because of parts shortages. A recent survey by the Original Equipment Suppliers Association found that 78 percent of respondents identified some portion of their product comes from Japan, Gotsch said.

For the auto insurance and collision repair industries, the problems could lead to the inability to get certain parts, longer part fulfillment times causing longer cycle times, and higher vehicle values that lead to bigger total loss costs, according to Gotsch.

“Everyone is closely watching inventory levels of these at-risk parts, and in some cases slowing new vehicle production to conserve these parts,” she said in the report.

Toyota issued a list of limited-supply parts to dealers soon after the earthquake, the report continued. On the list were nearly 250 parts, including roughly 90 shock absorbers and different types of stereo and electronic equipment. Vehicles such as the Yaris and Lexus LS 400, SC 300 and IS 300, which are made in Japan, are most likely to contain the parts.

Honda, meanwhile, suspended all U.S. orders for its Japan-built models including the Fit, Insight, Civic Hybrid, Acura TSX, Acura RL and a small amount of CR-Vs, Gotsch said. Some of those vehicles might be at risk of interrupted collision part fulfillment, but they only make up about 0.5 percent of the overall appraised vehicle volume for the first quarter of 2011.

Gotsch said the long-term impact on the auto industry is hard to predict, but CCC will continue to monitor the situation closely. Find the full report at cccis.com.


SCRS responds to USA Today article on repair costs:

Jan. 3, 2012—The Society of Collision Repair Specialists (SCRS) recently released a statement in response to a USA Today article published in December 2011 titled “Auto Body Shops Say They, Not Insurers, Should Set Costs,” which discussed whether body shops or insurance companies should set repair prices.

The SCRS’ statement counters points raised in the USA Today article. The SCRS also provides information supporting the assertion that the property and casualty insurance industry’s influence over collision repair market pricing has impacted both consumers and the small businesses that make up the collision repair industry.

Key components highlighted in the SCRS’ statement are as follows:
• Property and casualty insurance carriers have become increasingly involved in activities that extend beyond the business of insurance, and are interjecting themselves into collision repair business activities.

• The responsibility to compensate for fair and reasonable costs of a loss is significantly different than defining what is fair and reasonable.

• Average gross collision appraisal values have remained stagnant when comparing the first and third quarters of 2009, 2010 and 2011. Data indicates the average appraisal value has remained flat for the last seven to eight years.

Meanwhile, consumer auto insurance premium costs continue to rise.
The Insurance Information Institute recently reported that private auto insurance is the
most profitable line of insurance coverage in the United States.

• The insurance industry’s approach to establishing a singular prevailing labor rate charge for all businesses within a market fails to recognize the existence of a reasonable variance between competitive businesses.

• When repair shops enter into a DRP contract with an insurance carrier and an authorization to repair contract with a vehicle owner, it is not as simple as insurers promoting poor quality work.
It becomes a question of who has more influence over the repair facility’s decision-making in the repair process, and whose interest drives those decisions.
The SCRS said the question is not whether insurance carriers directly impact collision repair market pricing, but rather whether their approach and purpose is appropriate.

See original article here.

Auto Insurance 101
Why Ins. companies don’t pay claims.
CNN 360 Anderson Cooper – Auto Insurance Part 1