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As another legislative session is in high-gear in many states, the industry seeing a number of collision-related bills being introduced around the country. Often such bills are modeled after those passed in other states. But when a group of shops hears about legislation in another state that sounds like a good idea, do they actually check to see what effect it is actually having?

INSIGHT this month talked with shops in three states that in recent years passed pieces of legislation that are being considered elsewhere as potential models. Here is what they said about what effect the laws are having on their day-to-day operations.

Steering in Connecticut

Steering continues to be among the top issues shops throughout the country complain about. Anti-steering legislation was introduced in at least seven states last year but was passed only in two.

In California, a strict anti-steering bill was amended before passage to require only that a task force consider options to the state’s current anti-steering laws.

But in Connecticut, where Attorney General Richard Blumenthal appeared on television at a shop last February to help drive home the “Your car, your choice,” message, lawmakers considered two anti-steering bills. One said an insurer may not "recommend, request, or require" that a specific shop be used, and that insurer estimates state that insurers "may not interfere with the consumer's choice of repairer."

The bill that eventually passed and went into effect in January was, however, as one Connecticut shop owner put it, “hosed down.”

“They’re still able to very effectively steer the consumer to the direct repair shop,” said Michael Wilkowski, owner of the “fiercely independent” Stanley’s Auto Body, a 13-employee, non-DRP shop in Waterbury, Connecticut. “They still have their unique word tracks, and I’m not seeing a tremendous difference in customer knowledge or volume of work. But don’t get me wrong. It is a step in the right direction.”

Under the new law, insurers must include on appraisals and consumer insurance cards a notice that vehicle owners “have the right to choose the licensed repair shop where the damage to your motor vehicle will be repaired.” Shops must post a sign with similar wording.

But perhaps the one unique aspect of the new Connecticut law is that it requires any shop in a direct repair program, prior to repairing a vehicle through that program, to have the customer sign a statement acknowledging that they are aware of their right to use the shop of their choice.

“I think that’s a great idea and we started having customers sign it even before it became mandatory,” said Bob McSherry of North Haven Autobody in North Haven, Connecticut, who said the shop repairs 180 to 210 cars a month, about half under direct repair programs. “I don’t want them here unless they want to be here. Even if it’s someone coming in for customer-pay work, we have them sign it.”

Tom Bovina, a Greenwich, Connecticut shop owner and immediate past president of the Auto Body Association of Connecticut (ABAC), which pushed for the anti-steering legislation, said he feels that it is too early to see much in the way of results.

“But just having the notification on the insurance card in the glove box is helpful, because now at the scene of the accident when they reach in for the phone number to call the insurer, at least that’s in their faces,” Bovina said.

“It’s another tool to help educate the consumer,” agreed Bill Denya of Denya’s Auto Body in Meriden, Connecticut. Denya said he wished the legislation also required posting of consumer notification signs at insurance drive-in claims centers. “But a little chip at a time,” he said.

Wilkowski, also a board member of the ABAC, agreed.

“What we’ve been learning over the years is you can’t go up to the Legislature with a baseball bat and expect to hit a home run,” he said. “This is a matter of inches a year, unfortunately. We are fighting Goliath. He has an unlimited checkbook. All we have is right on our side, so we think.”

But Wilkowski said even if the anti-steering legislation was not as strong as he would have liked, just the effort to get it enacted has helped convey a message.

“”We have a lot more legislators who are sympathetic to our cause,” he said. “And we’ve seen more consumers aware they have a right to choose because of the numerous articles and news stories. The fact that we have the Attorney General with us, having news briefings at shops, has helped educate consumers even if the bill is really toothless.”

Open DRPs in Montana

While the Connecticut anti-steering legislation has been in effect only a matter of months, the legislature in Montana more than three years ago passed a law that addresses direct repair programs from a different angle. Under the legislation, an insurer is required to allow any shop meeting its DRP criteria and wishing to participate in the program to do so.

“It’s impossible to tell insurance companies how to run their business,” said Donna Fastenau of Hank’s Body Shop in Billings, Montana. “We can’t change the criteria, but we have the right to see it and decide if we want to meet it.”

Bruce Halcro of Capital Collision Center in Helena, Montana, current president of the Montana Collision Repair Specialists, said getting insurers to comply with the law often requires persistence on the part of a shop.

“They're not opening their arms and saying welcome to the fold. It still takes some effort," he said. “But for the most part, you can get on. As president of the association, I haven’t had anybody calling me and telling they can’t get on a program.”

Max Yates of Yates Body Shop in Butte, Montana, led the state association when the law was enacted. He said it has been “a huge asset” for his business because his shop had been removed from multiple direct repair programs because of his insistence on including necessary procedures, “clips and other hardware,” and other items on his final bills that other shops may not.

“The companies that had previously removed us because we pay attention had to open the door and let us back on,” Yates said, citing The Hartford, USAA, and Unitrin/Kemper as companies whose DRPs his shop now participates in since the law went into effect. “The bad thing is some of them took up to a year. They kept blowing us off, saying, ‘We don’t have anyone that’s going to be in Montana to confirm you meet our criteria.’”

Despite the delays, Yates said the law also reduces insurers’ leverage in seeking concessions from a limited number of shops vying to be on a DRP. “Overall, the bill has leveled the playing field for all collision repairers,” he said. “There’s a lot of quality, Class A collision repair facilities across this nation that just don’t get an opportunity.”

Estimating systems in Minnesota

It’s been about seven months since a state law went into effect in Minnesota prohibiting an insurer from "unilaterally and arbitrarily disregarding a repair operation or cost identified by an estimating system.” It is legislation that shop groups in at least a half dozen other states are working to introduce. So how it is working out in Minnesota?

For Bruce Tschida, a Lakeville, Minnesota shop owner and current president of the Alliance of Automotive Service Providers of Minnesota (which backed the bill), the law gives shops who understand the procedure pages and estimating guides a new tool in their negotiations.

“It's still all over the board who is paying what, but we're seeing changes," Tschida said. “If I ask for it and can justify it, they at least talk to you instead of it being something that’s just ignored. It’s improved the awareness and understanding of the P-pages.”

He said more insurers, for example, are now paying for feather, prime and block operations, and for denib and polish when that procedure is justified by the car.

Pete Latuff, owner of Latuff Brothers, a 22-employee shop in St. Paul, Minnesota, with annual sales of nearly $4 million, cited blending procedures as a good example of a change he’s seen.

“A lot of time before the law was passed, they kind of made up an imaginary time that they would give you to blend a panel,” he said. “Now they adhere to what the database calls for.”

John Neznik of Crystal Collision Center in Crystal, Minnesota, was even more enthusiastic about the new law. “It’s been huge,” said Neznik, whose 31-year-old business has annual sales of about $2 million. “Where it’s helped us is with wheel alignments and mechanical labor. Some insurance companies like to pay a flat price for wheel alignments or say that procedures designated in the estimating system as mechanical labor are body labor. Now I hold up the book and say we use the whole book and nothing but the book.”

Neznik, whose company no longer participates in any DRPs, points out the new law allows for deviations from the estimating system if agreed to by the insurer and shop, so it probably has not helped shops on DRP programs.

“But it has helped shops that are not on the programs do a lot better in quite a few areas,” he said. “It allows me to say, ‘We’ve got a law, and we only deal with law-abiding companies.’”

Tschida likes the idea that other states may follow Minnesota’s lead on passing such legislation.

“I think it needs to be addressed across the country,” he said. “We all need to understand the P-pages, or else how can you expect to get reimbursed for what you do? It’s made me more aware, and it’s made the appraisers here more aware.”

Look before you leap

INSIGHT’S take-home message with this research is not that certain pieces of legislation are or are not worth working toward in other states. But it is important to not just read a bill and decide to put resources into enacting it at home without first understanding what, if any, impact it is having on shops operating in states where it has been passed.

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