Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

SCRS Hosts Historic 2003 National Industry Issues Forum

The National Industry Issues Forum focuses on the concerns of collision repair professionals, offering them the opportunity to exchange ideas and examine ways to resolve industry issues. This year’s NIIF was particularly noteworthy, because representatives from SCRS (Chuck Sulkala) and the Automotive Service Association (Joe Sanders) co-moderated for the first time in history. The joint participation of the Automotive Service Association (ASA) and SCRS is indicative of the growing trend of cooperation between the collision repair industry’s two largest associations. This fact is symbolized, in part, by Sulkala’s membership in both groups.

“The two associations hold a unanimity of thought on many topics—for example, we worked as one to convince the information providers to share data across platforms,” explains Sulkala, Past SCRS Chairman and owner of Acme Body & Paint in Jamaica Plain, Massachusetts. “Asking Joe to help make the NIIF a dynamic experience follows directly from that spirit of working together.”

Sanders, a special consultant to ASA, enjoyed the chance to play a key role in the forum. “When Jeff Hendler and Chuck approached me to ask if I would help moderate, I thought it would be a pretty neat deal,” he says. “I was right. This year’s group of attendees was dynamic and enthusiastic which made my job easy. They didn’t have to be primed at all. They understood that the National Industry Issues Forum is one of the best available platforms to discuss and take action on what directly affects them.”

The resolutions discussed at this year’s forum were immediately forwarded onto the Collision Industry Conference (CIC), which took place in conjunction with the NIIF. Some of the more pertinent subjects to surface included:

• Defining Required Additional Labor for LKQ Parts — Brad Shelton, of Shelton Collision Repair in Derby, Kansas, gave a presentation to help the industry understand the time and financial impact associated with restoring Like Kind and Quality (LKQ) parts to the equivalent of new, original equipment (OE) parts.

  In many cases insurance companies allow a standard labor time for cleanup of LKQ parts, but often additional time is required to repair the part and transfer components such as coded lock cylinders, color matched moldings and electronic door regulators. The additional labor needed for these operations is not included as standard procedure in the estimating databases, even though it impacts the collision repair facility.

  “These operations should be recognized because they cost the body shop money and bog down production,” explains Shelton. “The work is real, necessary and needs to be acknowledged in all areas of the industry, from data providers to manufacturers to insurance companies.”

• Slow Market Acceptance of EMS — The Estimating Management Standard (EMS) is a file format that allows estimating data to be transmitted electronically, making it possible for an insurance company to receive an estimate in a single, common format regardless of the estimating system in which it was created.

  Though EMS has been built into all four of the major estimating systems, potential use of the file format is far from maximized. Collision repair facilities, as a result, must continue to invest in multiple estimating platforms to participate in their insurance partners’ Direct Repair Programs (DRP). This becomes costly as monthly subscription fees mount.

  In truth, EMS creates a win-win situation for insurers as well as body shops. “EMS opens up the market for us because we can choose a collision repair business partner based on the quality of its workmanship, not what estimating system it uses,” states Michael Lloyd, Material Damage Manager and Assistant Vice President, California Casualty Management Company. “There’s no question that open architecture is a great step forward for insurers seeking an efficient way to do business. Though the format’s progress in the market has been leisurely, it is progress just the same. We, as an industry, should continue to champion it.”

  The CIC Database Taskforce was recognized for its work as a catalyst in the acceptance of open architecture, and those attending were encouraged to acknowledge companies that support it.

• Third Party Desk Auditors — A recent and troubling industry trend concerns insurance company use of third party desk auditors to review and revise estimates written by collision repair facilities. In many cases, these auditors modify estimate content without physically inspecting the damaged vehicle. Furthermore, several of these auditors do not receive payment for their services unless they succeed in reducing the amount of the estimate by a specified dollar amount.

  Another practice often used to reduce the amount of the estimate is the utilization of a different estimating system than the one used by the repairer. In these cases, the other system is used to rewrite the sheet as the auditor attempts to reduce or eliminate labor.

  “As a collision repair businessperson, I can’t rely on input from a person who has never looked at the car and is using repair guidelines I’ve never seen,” says SCRS Past Chairman Bob Jones, owner of R. Jones Collision Repair in Des Moines, Iowa. “It’s an unacceptable practice in my opinion, so when I’m presented with one of these third party sheets I end up refusing to alter my original damage report.”

  States that don't already do so are encouraged to pursue legislation that disallows an estimate without a physical inspection of the vehicle and requires proper certification for this type of auditor.

• Itemizing Non-Reimbursed Operations — The current sensitivity toward fraud has placed an additional emphasis on making certain the estimate accurately reflects the work done to the vehicle. In this spirit, collision repairers are advised to itemize their estimates whether or not reimbursement is being received for a particular operation.

  “It doesn’t make a difference if the insurance company reimburses you for the labor or material on a specific repair,” states Lou DiLisio, SCRS Chairman and President of Automotive Industry Consulting. “Any work undertaken on that customer’s vehicle or any material utilized should be itemized on the estimate.”

  Documenting all your expenses, paid for or not, is the best way to avoid questions of liability. With a healthy representation of independent shops from across the greater United States, the National Industry Issues Forum continues to function as an important conduit of collision repair progress. “SCRS supports and hosts this event because of the value it provides,” says Risley. “It is a great venue for shop owners to discuss issues without looking over their shoulders as to who is listening.”

Through its direct members and 29 affiliate associations, SCRS is comprised of 8,300 collision repair businesses and 58,500 specialized professionals who work with consumers and insurance companies to repair collision-damaged vehicles.

©2003 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?