6 | Are We Insane? by Evangelos “Lucky” Papageorg LOCAL NEWS
10 | Massachusetts Shops Ask Legislators to Support a Mechanism to End the Labor Rate Madness by Chasidy Rae Sisk IN MEMORIAM
12 | Gregory Coccaro Jr.
ARE THEY NOW?
16 | Former AASP President Paul Hendricks Enjoys Retirement, Reflects on the Early Days by Alana Quartuccio
NATIONAL FEATURE
21 | Help Team USA’s Paint Olympian Take the Gold at WorldSkills!
INDUSTRY ADVICE: ASK MIKE
30 | Should the Industry Care About Artificial Intelligence and Augmented Reality? with Mike Anderson
EVANGELOS
“LUCKY” PAPAGEORG
Are We Insane?
Over the years, at one time or another, all of us in the collision repair industry have asked ourselves, “Am I out of my mind for doing what I do for a living?” You open your doors every day to provide a service – which has become increasingly more challenging to accomplish – for a diminishing return on your investment, all the while increasing your liability. You ask yourself, “Why did I go into business in the first place?” Rather than being able to control your independent business, you seem to be corralled at every turn. You wanted to be your own boss and be able to provide for your family and the families of those who work for you. You know you are providing a much-needed service to those in the time of need, much like a doctor, a lawyer, an electrician, a plumber or any other skilled profession or trade. What makes you different from these professionals when it comes to being properly compensated for your knowledge and skill or those of your technicians and staff?
Simply put, YOU ARE THE DIFFERENCE! Those other professions listed and all others elect to charge and collect based on the costs of doing business, levels of expertise, equipment and training while making a reasonable return on their investment. They stick steadfast to their decision, charge accordingly and do not let others dictate to them. As collision repairers, we may not want to admit it, but it is the truth. WE
are why we are in the “fix” we are in. The insanity lies in the fact we have the power and ability to make the decision to make a change for the better. Far too many do not want to face that truth. Just like the line from A Few Good Men states, “You can’t handle the truth!” That’s right! As an industry, all we need to do is look in the mirror, and realize we are the problem. There are many who have already done so and have not liked what they have seen. They are sick and tired of being “employees” within their own “independent” businesses. As their frustration level has risen, they have decided to make the changes needed to regain control. They have been working wholeheartedly towards “Breaking Free in ‘23.” As ‘23 closes out, they are moving their focus to “Doing and Making More in ‘24.” Rather than waste valuable time and energy on complaining and pointing fingers at others for the plight of the collision repair industry, they are taking the necessary steps to guarantee their success and profitability into the future.
You are reading this message after what will have been the third in our series of General Membership meetings which have provided our attendees with the basic information and tools they will need moving forward. The decision to implement and use the tools provided is up to each individual to weigh
continued on pg. 40
ZONE
Kevin Kyes
Dean Luther
Jeff White
Affiliate
J.R. Force
Simon Frietas
Jayce Mitchell
Gregg Tanguay
Scott Varney
AASP/MA
Membership Application 2023-2024
Braintree, MA 02185
Phone: 617-574-0741
Fax: 973-235-1963
Email: admin@aaspma.org
Please complete this form and return to our office via mail, email or fax with your dues payment. Thank You!
As a member in good standing, your shop WILL BE listed on our website Click here � if you do not want your shop listed on our website map for potential customers to find you. If you have any questions about this benefit, call (617) 574-0741, ext. 1.
Yes � Please send me information regarding the following MONEY SAVING BENEFITS: � Dental plan � Healthcare plan � Credit card processing � Grant writing/training � Google presence optimization � All five
PLEASE ENCLOSE PAYMENT WITH YOUR MEMBERSHIP APPLICATION
Check# : _______________ (IF collision shop please note your RS# on the memo line of the check) OR CC #: ______________ EXP: ________/___________ CID: _________________
Name On Card: _____________________________________________ Signature: _____
Check here � to opt out of auto renewal using this credit card information for future renewal
Note: A 4 percent convenience fee will be charged for membership renewal via credit card transaction
I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/ MA) for membership dues 2023-2024 as provided for in this contract.
*Membership Dues are for a twelve-month period commencing on your anniversary month of membership.
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Massachusetts Shops Ask Legislators to Support a Mechanism to End the Labor Rate Madness
Recent testimony by auto body professionals and advocates before Massachusetts legislators left listeners feeling like they’d fallen through the looking glass…When the state with the second highest cost of living and the highest average salary in the nation also has the lowest labor reimbursement rate, there’s no wonder shop owners feel like “we’re all mad here.”
For decades, Commonwealth repair shops have been working at a stagnant reimbursement rate of approximately $40 an hour, yet the industry has remained anything but stagnant. The need to address this insanity took center stage during the Joint Committee on Financial Services hearing on October 3 where support was voiced for four bills related to establishing fair labor rates in the state (House Bill 950, House Bill 1095, House Bill 1118 and Senate Bill 688)
“Our industry has gone from bodymen banging out dents and painting cars to a group of highly skilled technicians working on vehicles that carry computers processing more code than rocket ships, while the painting and refinishing process has required our technicians to become chemists,” AASP/MA Executive Director Lucky Papageorg detailed the complexity of repairing today’s vehicles. “Sadly, the labor
rate of reimbursement has not kept pace with the changes in technology, training and equipment required to perform proper repairs.”
AASP/MA members and other industry leaders joined Papageorg in sharing their thoughts on this important matter.
“I pay the same money for tools, welders, training and all my expenses as shops in every other state, yet I’m supposed to be able to repair cars for $43 an hour,” lamented Jeff White (North Andover Auto Body; North Andover). “It’s just not possible to budget for the same training as shops that are getting $60 or $75 an hour, so I had to raise my rates to invest in the proper education to make sure I’m putting out a safe product and that my customers and their families are protected after I repair their vehicles. Why can’t we be on an average playing field with all the other shops?”
Andrew Bedard (Bedard Bros Auto Body; Cheshire) indicated that the low reimbursement rate has led to the closure of eight body shops this year in his county alone “because they can’t continue doing business for only $40 an hour. Currently, the body shops that are still open are almost refusing insurance work because we can get paid $70 an hour customer pay, so we take
customer-pay work before any insurance work, and we’re all booked until February.”
Bedard also blamed the low reimbursement rate for the lack of talent available in the Massachusetts market. “We’re so close to New York where insurers pay $55-$65 an hour that I lose all my body techs that come out of trade schools in our area. As a beginning tech over there, they’re making more than some of the A-techs in our area. I’m even losing techs to Target because they’ll pay $23 an hour, and I can’t pay that to a kid straight out of high school with no knowledge because I won’t be able to make any money at $40 an hour.”
Papageorg agreed with both points Bedard made. “Thousands of potential employees do not even consider entering this profession, and businesses are closing down yearly not because of a lack of work but because of the lack of employees to do that work and the lack of a fair return on their investment. The collision industry is on the brink of collapse.”
“The problem is insurers set reimbursement rates that are far below market rates,” explained Brian Bernard (Total Care Accident Repair; Raynham).
“It’s a fallacy that insurers are helping consumers by keeping rates down. Insurers’ profits rise when they squeeze collision repairers like me, [but] insurance companies think everything is just fine the way it is and there’s no plans for them to fix the problem. That’s why I ask for legislators’ support to help create the mechanism to end this madness.”
Testimony from Christopher Stark (Massachusetts Insurance Federation) confirmed Bernard’s assertion that insurers believe things are just fine: “I’m pleased to report that over the last year, auto labor rates have moved upward [and] are seven to 15 percent higher than they were at this point last year,” he insisted, arguing that one of the reasons labor rates are lower in Massachusetts is the “continuing oversupply of repair shops in the market” and that
“mandating a minimum labor rate will increase drivers’ premiums [and] result in more total losses.”
Stark also spoke in support of House Bill 1005 which would abolish the Auto Damage Appraisers Licensing Board (ADALB) and return that authority to the Commissioner of Insurance. “The ADALB has been used like the Sword of Damocles hanging over the head of every appraiser in our state that if they do one thing wrong, there’s a chance they’ll have to come before the ADLAB to have a hearing…Just one company submitted over 100 frivolous claims to the ADALB over the last year,” he claimed (though he failed to note that the ADALB only voted to move forward on 15 of those 100 claims).
When Chairman Paul Feeney questioned the nature of those “frivolous” claims, Stark defined them as being relative to very small amounts and also expressed disagreement with the concept of manufacturer procedures and “whether or not it’s absolutely necessary for the repair of the car and to return it to its pre-loss condition.”
“As a trained repairer, I feel it is necessary to follow the safety requirements of the manufacturer. Please raise your hand if you would allow your children in a vehicle where a safety operation
was not performed, even though it’s required by the manufacturer,” rebutted Don Dowling (Marblehead Collision; Marblehead), who acknowledged that he had submitted 158 complaints which amounted to roughly $40,000.
Papageorg spoke out against House Bill 1005, claiming the auto damage appraisers license is a professional license that has nothing to do with the business of insurance and “giving that power to the Commissioner of Insurance does not make any sense or follow any logic.”
“The Division of Insurance is there to oversee the business of insurance, not collision repair,” Papageorg added. “They are there to cover the costs associated with collision repair for their policyholders; they are not there to determine what those costs are. For far too long, the legislature has kicked this issue down the street. The facts speak for themselves. Massachusetts is the lowest in the country regarding labor reimbursement rates, while being in the top 16 most expensive in the country for insurance premiums collected; it is time for the legislature to address this anomaly.”
Gregory Coccaro, Jr.
The collision repair industry lost a staunch advocate for quality repairs with the passing of Greg Coccaro Jr., age 44, co-owner of North State Custom (Bedford Hills, NY) on September 25 due to injuries sustained in an automobile accident.
His colleagues remembered him as “a regular guy with a big heart, generous and kind,” in a statement on Facebook. They added, “He made some friends here at North State Custom. He will be dearly missed.”
As a second-generation repairer, Coccaro Jr. followed in the footsteps of his father, Greg Coccaro Sr. – not only through the career path he chose but also in the fight for proper repairs and certifications. Coccaro Sr. was known throughout the industry for his proclivity to fight for consumer safety and shops’ rights, gaining national attention when he triumphed over Progressive in a groundbreaking lawsuit that benefited the entire industry. After his death in 2016, his son took up the mantle, continuing his father’s work to fight for what is right.
His untimely death rings as tragic for all who knew him.
“He was certainly a warrior and a champion for standing up for the right repair for the right reason. He never pulled away from that. He would never back down from that right,” Ron Reichen (Precision Body and Paint; Beaverton, OR) speaks highly of his friend.
“He was very intent on getting the latest and greatest equipment, the latest and greatest training,” Lou Dilisio (Automotive Industry Consulting Inc.) recalls Coccaro Jr.’s passion for running a high-quality shop. “He did a lot of highline automobiles and had a lot of certifications. He was a fanatic about making sure he followed all of the OEMs’ procedures. That’s something that everybody should be doing, but it’s not something that everybody does.”
Dave Gruskos (Reliable Automotive Equipment) largely knew Coccaro Jr. as his father’s son, and he remembers how proud
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“Greg Sr. was honored by his son’s actions and was looking forward to Jr. walking in his shoes, so as Jr. took over, he immediately pushed to be better by embracing the EV revolution and the increasing certification as well as training. This allowed him to maintain himself as an industry leader…never a follower.
“Greg was a fighter for the industry to help all shops to be compensated for their certifications and training. His goal was to attract only the best workers to our industry. I know Greg would like to be remembered as the man who gave the industry and his community 100 percent at all times. As we all fight the fight for proper repairs and compensation, we should all thank Greg and his dad for helping pave the way for all of us.”
Coccaro Jr. was born in Sleepy Hollow, NY and spent his career working at his father’s side, learning everything there was to know from Coccaro Sr. He is survived by his mother Debra Ann Coccaro (Servello); his brother James Coccaro; his wife Bridget Muzzillo and a young daughter.
AASP-MA and New England Automotive Report send their deepest condolences to the Coccaro family.
Coccaro Sr. was that his progeny chose to work at his side.
Photo provided courtesy of Ron Reichen
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Former AASP President Paul Hendricks Enjoys Retirement, Reflects on the Early Days
The Massachusetts auto body community is as strong as it is today thanks to those who share their voice and have helped stand up for what is right. AASP/MA would not be where it is today if it weren’t for the collision repair professionals who helped lay that foundation. New England Automotive Report has been periodically catching up with some of AASP/MA’s founding fathers. This month, we tracked down Paul Hendricks, a founding member of AASP/MA, former Massachusetts Auto Body Association (MABA) and Alliance president and owner of Hendricks Auto Body (Uxbridge) to pick his brain about the early days and to see what life is like post-retirement.
New England Automotive Report: When did you first get into the industry?
Paul Hendricks: I've been in the automotive industry all my life; I would say it all began in 1966, when I worked at a dealership while still in high school. I spent two years in college and then went into the military for four years. After that, I started working in the parts department for a dealership and became the parts manager. Then I went to Fireman's Fund Insurance company to work as an appraiser. I later owned and operated Hendricks Body Shop in Uxbridge until I retired. I also have an independent appraisal company that I still
own and work with today. So, I've been in the industry almost all my life, and I turned 75 in October.
NEAR: How did you get involved with the association (MABA at the time)?
PH: I was working at the Fireman’s Fund Insurance company as an appraiser when I first walked into Ace Auto Body in Worcester. The owner, Jim Angelico, offered me a job. It was like a TV show… he made me an offer that I couldn't refuse. Jim was president of MABA, and therefore I got heavily involved with the association and attended many meetings. So, that’s how I got into the auto body end of the industry.
NEAR: You also served on the Board of Directors. What are your memories from those days? What were some of the biggest accomplishments?
PH: I was heavily involved and served as the president of MABA at the time three associations merged – MABA, the Central Mass Auto Rebuilders Association (CMARA) and AASP. As for accomplishments, the industry improved immensely through education. The association offers very good training. And I’ve met some great people.
NEAR: As you mentioned, you were instrumental in the merging of all three state associations into AASP/MA in 2010. How did that come about?
PH: We weren't surviving by ourselves. Each association was just trying to get off the ground. We were three associations working on the same issues, and each association wasn't big enough to fight the insurance companies independently. That is the main reason that the three of us merged; we just couldn't do it by ourselves. At the time of the merger, I was president of MABA, Tom Ricci was president of CMARA, and Rick Starbard was president of AASP/ MA. Later, when we were under the AASP/MA name, the three of us took turns serving as president.
NEAR: What were some of the obstacles?
PH: Some of the obstacles were finances. Some of the associations were a lot stronger than others. At that time, AASP was 90 percent
mechanical and only 10 percent body shop, whereas CMARA and MABA were obviously 100 percent auto body. AASP was national, and that’s why we went with that, instead of being under CMARA or MABA, because we had more backing through a national group. Strength in numbers.
NEAR: When did you decide to retire and why?
PH: My health made me retire. I didn’t want to die in the frickin’ body shop.
NEAR: What have you been doing in the time since you retired?
PH: Sleeping (laughs). I joined a rod and gun club. I hadn’t shot a weapon in over 50 years since the military. I went to brunch with a friend of mine one day, and he convinced me to join the Nipmuc Rod and Gun Club in Uptown. I became the director, and I run their skeet show.
I don’t personally hunt or anything like that, but I do run the skeet show, which is shooting clay targets. We shoot twice a week – Sundays and Thursday mornings. I’m heavily into riding my motorcycle. I go out and ride with the Massachusetts veterans motorcycle club at least once a month. I have a 100 year anniversary model Harley and I go everywhere on my bike. It’s got 80,000 miles on it. I’ll be out on it today.
NEAR: Any other hobbies?
PH: Riding is my biggest hobby, but I have a new grandson, and that has been a big improvement in my life. He lives in Virginia. He’ll be two years old this month, so my wife and I travel out to Virginia quite a bit. I go to the Sturgis Motorcycle Rally. It’s huge, probably the biggest in the country. I went with a fellow body shop owner, Jim Audet (Precision Auto Rebuilders; Dudley) and a couple of other friends. We spent 10 days there. That was
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on my bucket list. It was an excellent time.
NEAR: Looking back now, some years removed, what comes to mind when you think about your time in the body shop industry?
PH: I made a good income. I felt I could get as much education as I could through the associations, and I think I became a very good negotiator. I don’t think I personally loved the body shop industry. I don’t think anybody does, so much. It’s just a way to make a living. I enjoyed the customers. I enjoyed the hassles. I am still involved in arbitration through my appraisal company and still do quite a few arbitrations.
NEAR: What do you miss most? Least?
PH: I would definitely say the customers are what I miss most. I had a very good rapport with the customers. What I miss the least is the ignorance of some insurance appraisers who have to deal with the stupidity and the ridiculous rules of their industry.
NEAR: What is the one thing you feel you got from working in this industry that you would not have gotten if you chose a different career path?
PH: That’s a really good question. I would say it’s the relationships. Believe it or not, I still deal with one of my customers. He’s 91 years old. It’s the relationships I built with people. You feel really good when they come in after you repair their vehicle and are just amazed by the work you have done. It’s overwhelming.
Tom Ricci, Paul Hendricks and Rick Starbard during the merge in 2010
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Help Team USA’s Paint Olympian Take the Gold at WorldSkills!
As athletes around the world busily train for the 2024 Summer Olympics in Paris, a group of talented young people are gearing up for a similar challenge in nearby Lyon, France: the 47th WorldSkills Competition (WSC), taking place September 10-15, 2024.
Every two years since 1950, dozens of countries and regions from all over the globe have sent more than 1,400 competitors to test their skills in over 60 different trades, and in 2024, Team USA is slated to participate in five categories – automobile technology, auto body repair/car painting, cooking, heavy vehicle maintenance and welding – with delegates being chosen from among the SkillsUSA winners. Selection “involves a detailed analysis of SkillsUSA Championships results followed by interest surveys, individual interviews, skill demonstrations or hands-on events, followed by the creation of individual training plans for the next year,” according to Team USA’s website.
Although the group of young experts who will represent the US in 2024 has not yet been selected as of this writing, industry supporters have already begun raising funds to ensure Team USA’s “Paint Olympian” is equipped to bring his or her best. Team USA’s painter will prepare for the competition with industry expert Jamie Redd (PPG), who will accompany the fledgling trades professional to France to lend his support during the biennial event often referred to as the “Olympics of Technical Skills.”
“The WorldSkills USA team is funded solely through private donations,” shares Jessica Neri (PPG). “To fully fund our auto body competitor, we need a minimum of $20,000, but we can do this –this hopeful competitor needs our support!”
Competitors who will represent Team USA must qualify by
participating in demanding competitions to demonstrate their skills in order to reach the world stage where they’ll have the opportunity to test those skills against an international standard at levels of Olympic intensity. While many industry professionals believe that’s a standard set by the US, which was built by the skilled trades, the American team has historically seen less industry support than other countries’ teams have received.
“We can’t constantly complain about not having people in the trade but then not want to do anything about it,” insists former Team USA Auto Body/Paint Expert Rodney Bolton (Bolton Consulting). “You’ve got to put your money and support where your mouth is, so we can support the trade 100 percent.”
Competitors need that support to grant them access to the equipment, tools and materials needed to finetune their craft in order to compete at the level necessary to have a chance at taking home a medal, a dream that Team USA’s refinish competitors have yet to fulfill.
“The USA has never medaled at the world level in refinish, but we can change that by coming together to support the Refinish USA World Skills Team – this is the Olympics of our industry, and nothing says ‘America’ like our competitor kicking butt and bringing home the gold, silver or bronze!” Neri urges. “Would you be willing to help? Would your company be willing to donate a small amount? If we broke it down by $500 increments, we only need 40 companies to donate.”
Making a donation is easy. Just visit worldskillsusa.org/ donate, and type “car painting” into the field that asks “gift
continued on pg. 42
Here’s to 241 years of combined service excellence
This year, as Albert Kemperle Inc. celebrates its 83rd anniversary, BASF also celebrates its 158th anniversary. We are proud of our decades of partnership with BASF and years of serving the auto paint and body industry together. Kemperle’s founders would be proud of this relationship and the growth their company has experienced because of it.
Today, as we look forward to many more decades of service to our customers, we find ourselves filled with gratitude. The creativity, hard work, and sense of responsibility of the people working for our two companies have made us what we are today.
Thank you for your many years of loyalty.
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FIRST PLACE TEAM: Kevin McNally, Chris Morin, John Guerin and Scott Attarian
SECOND PLACE TEAM: Kevin Gallerani, Carlos Dantas, Stephen Nigro and Ronnie Lanoue
THIRD PLACE TEAM: Dana Snowdale, Pat Capello, Chris Tarpey and Peter Skamarycz
PUTTING CONTEST WINNER: Tom Schube
BALL DROP WINNER: Seth Elie
LONGEST DRIVE WINNER: Nate Beath
CLOSEST TO THE PIN WINNERS: Chris Sachs, Mike Johnson, Joe Robertson, Greg Neely and Jammy Martin
THE SPONSORS:
AASP/MA THANKS ALL THE SPONSORS OF THIS YEAR’S TOURNAMENT!
I-Pad Hole in One Sponsor: Carl’s Collision Center
Raffle Prize Sponsor: Carl’s Collision Center
Kick Off Ball Drop Sponsor: Sherwin Williams
Putting Contest Sponsor: Colours, Inc.
Longest Drive Sponsor: AkzoNobel
Closest to the Pin Sponsor: Grappone Automotive Group
Breakfast Sponsors: BASF, LKQ Corporation, Mastria Auto Group and Carl’s Collision Center
Lunch Sponsors: Auto Body Supplies and Paint, Carl’s Collision Center, Parts Authority and Shelterpoint Life Insurance
Driving Range Sponsor: Shelterpoint Life Insurance
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2023 Tee Sponsors:
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• The Glodis Group
AASP/MA Executive Director Lucky Papageorg poses with 2023 Golf Outing winners:
1: Members of the First Place Team with Lucky Papageorg
2: Members of the Second Place Team with Lucky Papageorg
3: Members of the Third Place Team with Lucky Papageorg
4: Putting Contest Winner: Tom Schube with Lucky Papageorg
5: Longest Drive Winner: Nate Beath with Lucky Papageorg
6: 50/50 Raffle Prize Winner: Dana Snowdale
7: Door Prize Winner: (L-R) Lucky Papageorg, AASP/MA President Kevin Gallerani and Dan Weaver of Axalta pose with the Door prize donated by Axalta
Special thanks to Axalta Coating Systems for donating this year’s door prize, a 55-inch Toshiba fire TV. Special thanks to Bald Hill Chrysler Dodge Jeep Ram Kia, McLaughlin Chevrolet, Shelterpoint Life Insurance and Steve’s Collision Center for donating raffle prizes and to Hertz for assisting with our Putting Contest.
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ASK MIKE Should the Industry Care About AI and AR?
This month, we “ASK MIKE” for his thoughts on the potential impacts of artificial intelligence (AI) and augmented reality (AR) on the collision repair industry. We at New England Automotive Report hope you find the following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a future issue.
New England Automotive Report: Artificial intelligence (AI) and augmented reality (AR) are being discussed everywhere these days. What kind of effect do you see these things having on the collision repair industry? Should shops add them to their lists of things to worry about?
Mike Anderson: I believe that AI is absolutely going to come into our industry. It’s here now, and it must start somewhere before it gets better – just like with any other technology. There are things in our industry where AI could be used in good ways. Insurance companies could use it to identify a total-loss vehicle based on photos. That vehicle could go straight to an auction yard instead of going to a shop, where it would be disassembled and accrue charges for storage and rental. Obviously, if you’re a shop that relies heavily on storage charges to remain profitable, this could hurt you. Shops that have storage as a major profit source need to start looking at ways to replace that.
AI could also be good for OEM research. When you purchase something on Amazon, the site will say something like, ‘People who bought this movie also like this movie.’ AI could suggest things to repairers based on things they’re already looking at in the OEM procedures. The reality is, most people are not looking up everything they should to properly repair a vehicle, so AI could have a place to help our industry.
In regard to writing estimates, I’ve seen some of the ones that
have been written by AI. None of them have really impressed me. Some people have said that AI could ‘jumpstart’ the estimate or help the customer quickly figure out whether they want to file an insurance claim, but the estimates I’ve seen haven’t been very detailed. AI must learn from real life. Take sites on the internet that use CAPTCHAs for example; a website may ask you to identify all the pictures of a road sign or a bridge to prove you’re not a robot. Well, that’s Google using you to teach AI what a road sign or bridge is. AI must learn from somewhere. When you’re writing an estimate in CCC, for example, and an insurer comes back and says you need to change it, that change isn’t just being made to that claim – you’re training AI on how much something will be worth in the future.
NEAR: Obviously, AI will only be as strong as the information it can gather and then present to an end-user. There could be a danger of this becoming an example of “garbage in, garbage out.” Who will be responsible for ensuring accurate information for AI in the collision repair industry?
MA: We need to look at the long-term ramifications when we change estimates. Right now, the software companies are holding our futures in their hands. There needs to be something in place to ensure accurate information. It can’t just be DRP shops, because they may not be doing the right thing when the vehicle’s repaired. The industry needs a credible source to validate the data.
NEAR: Whenever something new hits this industry, many shops look at its negative aspects first. There are concerns surrounding AI and AR, but what are some of the potential benefits and advantages to this technology if it’s applied in the most accurate and dependable ways possible?
MA: I can see a future where you’re writing an estimate using augmented reality and basically talking to your estimate and saying, ‘Replace quarter panel,’ and it’s making the parts order and pulling the OEM repair procedures for you. That could be amazing for our industry.
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NEAR: Absolutely! The OEM procedures come from one dependable source.
MA: That’s correct, and you know that’s the source of truth. I know how much time it takes to research OEM procedures, so just being able to use this technology to simply talk and pull those procedures, order parts or get suggestions is a huge opportunity for our industry – but it needs to be applied in accurate ways and in appropriate settings.
Mike Anderson is an Accredited Automotive Manager (AAM) and the former owner of Wagonwork Collision Centers, two highly acclaimed shops located in Alexandria, VA. He has served as a member of many industry organizations throughout his career, including the WMABA Board of Directors, the Mitchell Advisory Board, the MOTOR Advisory Board, the ASE Test Review Committee, the National Auto Body Council, the Collision Industry Conference and the Society of Collision Repair Specialists. Additionally, he is a past Virginia SkillsUSA chairman, serves as a facilitator for Axalta Coating Systems’ highly recognized Business Council 20 Groups in both the US and Canada and facilitates numerous courses for Axalta Coating Systems’ Educational Series. He currently offers expert industry consulting via his latest venture, Collision Advice (collisionadvice. com).
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Rip the Band-Aid Off: Divorcing Your Referrals
Preparing to remove your shop from an insurer’s referral program can come with several mixed emotions and concerns. Most shops who have ended these relationships report some growing pains, but they also express that they would indeed do it all over again. So, if you have been wanting to rip the Band-Aid off, you will want to develop a basic vision for (1) how you want to operate, (2) how you are going to market your shop and (3) how you are going to educate your customers and the communities you serve. With those established, you are ready for the referral program divorce –legally breaking up with the insurer.
First and foremost, which lists and programs are you even on? Several folks have reported believing that they were no longer part of a contracted referral or program relationship, only to find out years later that there was still an agreement in place.
These agreements never expire. They automatically renew (often yearly) and go on forever until one of the parties explicitly ends the relationship. Agreements like these are always slighted in favor of the party who drafted the agreement, this is nothing new or specific in our industry.
Any insurer which you have contracted with should have provided you with their contract of terms. Those terms dictate the steps you must take to end the relationship and are your clearest way forward. But be warned: insurers’ referral lists often come out
quarterly, so you may find that it takes a while for the changes to be recognized.
The insurer should always be confronted as far ahead of time as possible, and your shop needs to let each customer know upfront that you are not part of their insurer’s program; you will be working for that customer and not their insurer. Let them know that it is their vehicle, their family and their safety which is always most important.
Your standard customer intake forms must make clear that the relationship is between you and your customer. It is the customer who is ultimately responsible for payment, and there is an option to direct their insurer to pay the shop directly any of the benefits under the customer's claim which are relevant to the work your shop provides.
For a little background and perspective of referrals and programs, it’s enlightening to see the legal authority around referral lists in Massachusetts and how those referral lists have changed over the years.
Referral shops are recognized under Massachusetts law as Referral Repair Shop Programs, pursuant to 211 CMR 123(6). These lists were part of the performance standards required by Commonwealth Auto Reinsurers (CAR), which is given statutory authority over the assigned risk pool of insurers, with the goal of
cost containment.
In theory, shops enjoy regulatory protection over their right to be included on a referral list or program. But earlier this century, to attract some larger insurers to the Commonwealth, the Massachusetts Commissioner of Insurance invited some of those bigger insurers to write their proposed direct payment plans. According to my sources, some notice requirements may have been missed, and the whole thing was a big mess and eroded many of those protections. Ultimately, shops who wanted to be on the referral lists were at the mercy of the insurers, rather than having an assumed right to participate.
For those shops in the readership looking to join a referral list, this is the new reality you face. Getting onto a referral program may be closer to a job interview today. But if you can find an insurer in serious need (without enough reliable coverage for your geographical area), you may have some bargaining power.
Insurers need referral shops. Joining a referral list or program is practically the only way to have an express contractual relationship with an insurer, and those contracts give insurers a lot of control. But if you can stay busy and avoid the inherent liability issues that present when you’re not able to call all your own shots, then it may be feasible for you.
I tell all my shop clients the same thing: I don’t want you to
be the cheapest; I want you to be the best. My experience with referral programs is that shops are treated closer to one-size-fits-all, and insurers refuse to account for any of the investments individual shops make in themselves and their craft to go above and beyond the bare minimum repair. And I think you deserve better and would urge you to evaluate whether you want such a relationship…or if it’s time to rip off the Band-Aid.
Coverall Law Managing Attorney Sean Preston finished in the top of his law school class at the historic Howard University School of Law in Washington, DC after serving in the United States Army. He went on to excel in business and legal strategy, serving some of the world's most recognizable brands in neighboring industries. Sean recently returned from Berlin, Germany with his family (where he served in Rolls-Royce's General Counsel function) and today resides in Wareham, MA, where he helps to oversee and meaningfully lead efforts in the region for Coverall Law. He can be reached at (508) 6355329 or spreston@coveralllaw.com
continued from pg. 6
out the benefits and realize the long-term potential they have before them. Seeing and hearing from their colleagues regarding the success they have experienced in a relatively short period of time has given more individuals the confidence to move to true independence, an independence that leads to a better work environment where the business and its employees are all doing better and are better able to serve their true customers – the vehicle owner – and not the insurance industry seeking to insert itself in the business of collision repair. The insurance industry inserts itself into a business that it needs, but rather than destroying it, insurers should be looking long term and seeking to work to facilitate success on behalf of their insureds.
Part of the reason to question our own sanity comes from business decisions made more than 30 years ago as this trade was evolving from body men doing what they love (fixing collision damaged cars) to business owners and highly skilled technicians working on highly technical vehicles which rival the rockets and satellites sent into outer space today. The business decision made by some shop owners in the late 80s and early 90s to allow insurers into our industry through the front door of our independent businesses is of course, the “referral” contracts brought on by the “Insurance Reform Act of 1988” and the subsequent bastardization of those contracts leading to “program” shop contracts. As an association, we do not condemn those business decisions from over 30 years ago, as our position statement declares, “AASP/MA is a pro-consumer association representing all collision and mechanical repair shops, regardless of their insurance affiliation. However, it is our firm belief that restrictive and suppressive insurance referral and 'program' contracts are a detriment to our industry and could create a liability risk for vehicle owners and collision repairers.” Therein lies the “truth” and why we are struggling as an industry to thrive and attract new blood.
More and more shops over the years, and notably in the recent past, have been taking steps to break away from these restrictive contractual arrangements. By doing so, they have been able to implement procedures within their business to cover the increasing costs associated with collision repair from the training required to the additional equipment and facility costs. They have realized that only truly independent collision repairers will survive and thrive. It has been reported that shops and even some MSOs have not only elected to remove themselves from insurers’ contracts; in some instances, they have made the independent business decision to not do business with those insurers that are not fair and reasonable to work with in regard to reimbursement rate and the payment of recommended and required procedures. The great news is that these same shops are successful and continue to have a backlog of work while getting paid properly
for their efforts and expertise in the collision repair process.
Part of the process of severing ties with insurers is knowing the steps you must take. All too often, shops are surprised that they are on referral lists. Some shop owners think that they are not a referral shop because they have not signed to renew a contract. Understand that the contracts are perpetual; the insurer is NOT obligated to have you renew your “commitment” in any fashion. If you signed a contract 30 years ago and have not taken the steps to formally notify the insurer and the Division of Insurance that you want to be removed, you are STILL a referral shop. This allows insurers to continue setting an artificially suppressed labor reimbursement rate. Why? Because they are able to show that they have at least five shops in a conveniently located “geographical area” (whatever that means) to the claimant. The insurer then claims these shops will do work for a specific labor rate and for the estimate they have written. Further, they take the position that ALL shops must also do the same.
Suffice it to say, if you believe you are “independent” because you think you are not on a referral list, it would be wise to check for yourself…you may very well be surprised that you are actually on a referral list! The sanity of anyone may be questioned if they think that a 30-year-old, a 15-year-old or even a year-old contract covers and has kept up with the changes in technology of today’s vehicles. If you want to be sure you are not unintentionally adding to the problems we are facing as an industry, please read Attorney Sean Preston’s article on page 38.
I hope you were able to join us at our October General Membership meeting. If not, please contact our office directly to find out how you can get a video copy of the presentation and thumb drive containing the forms and documentation provided at the event.
Taking steps towards greater independence could lead to greater peace and assured sanity, by creating greater success and profitability.
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continued from pg. 21
preference – which competition are you supporting?” And because these donations are tax deductible, don’t miss the opportunity to double your contribution if your company has a matching program!
According to WorldSkills Team USA’s website, “A student-led partnership of education and industry, SkillsUSA is America’s proud champion of the skilled trades, building the nation’s future skilled workforce by delivering graduates who are career ready, day one. SkillsUSA works year-round to instill positive attitudes, build self-esteem and empower students to excel in the career path of their choice and follow their passions. The organization has 850 national partners and is integral to the training in nearly 20,000 career and technical education classrooms.”
Like the Olympics inspire many athletes to aspire to greater heights, proponents of WorldSkills hope that the premiere event to showcase technical education will likewise draw young people’s attention to the plethora of career opportunities that exist within the skilled trades. The 2024 iteration anticipates attracting over 250,000 spectators, including students, public policymakers, employers, teachers, trainers, technical experts and government officials, which provides an ideal opportunity to promote the value of the trades on the world’s largest platform.
A promotional video available on WorldSkills USA’s YouTube page (youtu.be/ VkeGGdMQ734) sums up the importance of supporting the trades quite effectively: “The glory and beauty of athletics is undeniable, but athletics didn’t build this nation; technical skills did that…It’s time – time to show our team, America’s team, that we value them and what they represent. Because they represent us, our past, our present and our future, a future where technical skills once again receive the honor they deserve. And where America once again takes the lead in their development.”
