Valspar Refinish combines best performance with best value, from primer to clear. With this solvent system, you will achieve color consistency, great coverage and hiding, and an overall quality finish—every time.
PRESIDENT'S MESSAGE by Kevin Gallerani
6 | Who Doesn’t Want More Money in Their Pockets? EXECUTIVE DIRECTOR’S MESSAGE by Evangelos “Lucky” Papageorg 8 | Closing Out 2021 with Momentum
NEWS 10 | Just 4 Fun: Reader Feedback
12 | Deck the Truck with Boughs of Holly by Chasidy Rae Sisk
16 | Labor Rate Special Commission Explores Connection Between Labor Rate and Tech Shortage by Chasidy Rae Sisk
20 | Women’s Industry Network Accepting Nominations for 2022 Most Influential Women
AFFINITY PROGRAM MEMBER SPOTLIGHT
| Enterprise Rent-A-Car by Alana Quartuccio Bonillo
| What's Your Christmas Wish?
| Delays, Disruptions and Frustrations: Massachusetts Shops Cope as Supply Chain Woes Loom by Alana Quartuccio Bonillo
KEVIN GALLERANI
Who Doesn’t Want More Money in Their Pockets?
It’s hard to believe, but 2021 is almost over! As the end of the year approaches, it’s time to re-evaluate your shop’s needs, and that means taking a closer look at every aspect of your business, especially expenses – from the vendors we use to the tools and equipment we invest in and everything in between.
One of the most important things you should be considering right now is your health, dental and merchant services. Historically, pricing these benefits has been a huge pain, but your association has made that a little easier by partnering with some great companies that want to help you run a more profitable business by offering discounted services.
AASP/MA members can safeguard their employees’ health by offering health insurance through the Amato Insurance Agency (a division of World Insurance). Altus dental coverage is available through The Magellan Insurance Agency, and we’ve even partnered with Aurora’s Chosen Payments to provide shops with access to discounts on credit card processing fees.
These three companies are all participants in our Vendor Affinity Program (VAP), meaning they support your association, your industry and your business! Will you at least consider supporting them in return?
But these aren’t the only great VAP sponsors that offer discounts to association members – as an association member, you have access to discounts on everything from parts to ADAS calibrations. AASP/MA has worked with these vendors to save shops money, putting real monetary value back into shop owners’ hands.
PUBLISHER
Thomas Greco | thomas@grecopublishing.com
SALES DIRECTOR
Alicia Figurelli | alicia@grecopublishing.com
EDITORIAL/CREATIVE COORDINATOR
Alana Quartuccio Bonillo | alana@grecopublishing.com
I’m currently running figures for both of my shops in hopes of saving some money while supporting the vendors that support us. It is worth your time to get a second opinion and know your options! It costs nothing to request a quote, and current AASPMA members could earn $500 if Aurora’s Chosen Payments cannot save you money over your current credit card processing system (that is one year’s worth of free dues). So, what are you waiting for?
As you consider your options for 2022, I challenge you to take a look at the discounted benefits available to you as a member of AASP/MA. I urge you to try the companies we’ve teamed up with. Not only do you have an opportunity to save money (possibly a LOT of money!), supporting those vendors helps to fund AASP-MA’s lobbying efforts as we fight to make this industry better for all of us!
Many AASP-MA shops have already started to take advantage of the benefit programs developed. And if you’re not an association member yet, consider joining – the discounts available through our benefit programs and various VAP sponsors could cover the cost of your dues and then some. Don’t cheat yourself by missing out on these deals.
When we support those who support us, our association AND our industry become stronger!
AASP/MA PRESIDENT KEVIN GALLERANI is president of Cape Auto Collision Center in Plymouth, MA. can be reached at (508) 747-0316 or kevin@capeautobody.com.
Membership Application 2021-2022
AASP-MA
P.O. BOX 850210
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!
YES � Please list my business as an AASP/MA member in good standing on the AASP/MA website for consumers to consider using for the collision repairs and assistance with the claims process. I understand this is a member benefit (_________ initials Date ___/__ __/2021)
Yes � Please send me information regarding the following MONEY SAVING BENEFITS : � Dental plan � Healthcare plan � Credit card processing � All three
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: _________________
Billing Address: __________
Name On Card: _____________________________________________ Signature: _____
I hereby make this application for membership with the Alliance of Automotive Service Providers of MA (AASP/MA) for membership dues 2021-2022 as provided for in this contract.
*Membership Dues are for a tw elve-month period commencing on your anniversary month of membership
REV 07/21 MDA
EVANGELOS
“LUCKY” PAPAGEORG
Closing Out 2021 with Momentum
The combined efforts of you, our membership, the volunteers who serve on our Board of Directors and the hard-working staff of AASP/MA have made tremendous contributions in 2021 and have built a great deal of momentum going into 2022. We have a long road ahead of us as an industry, but with our ongoing and sustained efforts, we can continue to make headway and increase our momentum.
Over the course of the past year, we have kept you informed of the many advances we have made regarding benefits created, along with milestones we have achieved. The following is a recap of many of our successes and advances made. AASP/MA has been able to add value to your membership, thereby rewarding you for your support and efforts on behalf of consumers who rely on our industry members for the repair of their damaged vehicles. These accomplishments are listed in no particular order of importance, but the combined success of our efforts speaks volumes.
For the first time in many years, we have seen great success in our legislative endeavors. This success is because of many factors, not the least of which is you, our membership. When the call to action was issued at the beginning of this current legislative session, you made hundreds of calls to legislators across the state. In a matter of just a few days at the end of February, we gained the signature support of 90 senators and representatives statewide on our two legislative bills. We have also received verbal support from dozens more in the house and senate. The two bills are HB 1111, “An Act to establish minimum reimbursement rate to insurance claimants” and HB 327, “An Act relative to the licensure of appraisers.” Both of these bills are critical to the consumers of Massachusetts, and thereby you - the repairer - will ultimately benefit when you are able to negotiate with insurance appraisers on a level field and receive compensation for required procedures at a rate that reflects the technical expertise necessary to repair today’s vehicles. We are happy to report that HB 327 was released from committee on November 1 with a “should pass” vote by the Joint Committee of Consumer Protection and Professional Licensure (CPPL). Please take a moment to call Chairman Tackey Chan, the lead sponsor of the bill to thank him for his efforts at (617) 722-2014.
Our legislative successes were accomplished because we were able to engage a full lime lobbyist, thanks to the additional support from the members of the Board of Directors and some of our membership who committed to additional monthly financial support. We thank each and every one of you for your additional support and urge others to contact our office to contribute to support the Lobbying and Legal Fund. This is not a Political Action Committee (PAC); it was created solely for the purpose of sustaining a professional lobbying effort and creating a legal war chest for the future, for OUR future, for YOUR FUTURE. Our legislative agent (lobbyist), Guy Glodis, has been instrumental in advancing our legislative agenda. We have had meetings with key legislators across the state as well as with Lt. Governor Polito and Insurance Commissioner Anderson, setting the foundation for our efforts.
In support of our efforts to increase the minimum reimbursement to insurance claimants, we have continued our work with National AutoBody Research (NABR). Richard and Sam Valenzuela have been
working diligently to compile the information submitted by repairers across the state in the form of a “POSTED” Labor Rate survey, and the accumulation of nearly 11,000 documents, of which over 3,200 are from Massachusetts, show the rates and procedures insurers have paid. These documents also demonstrate the rates, the true prevailing rates, customers have paid for work performed, not the contractual rates insurers have artificially set through their referral and program shops across the state. I am happy to report that I continue to get calls from shops who are removing themselves from these industry-restricting contracts. In turn, they are improving their ability to better negotiate on behalf of their customers. NABR will be assisting our industry as we prepare to give and hear testimony during the Labor Rate Study Commission (LRSC) set for the future.
AASP/MA has appointed three panelists to the LRSC. We have been working closely with the Massachusetts State Auto Dealers Association (MSADA) and the vocational school representative on the LRSC to accumulate and best present data. This data will document that there must be action taken regarding relief on the Labor Rate reimbursement paid on claims here in Massachusetts. We are all acutely aware of the fact that as an industry, we are far behind what is a fair and equitable rate of reimbursement for the critical and highly technical work we perform on today’s vehicles. Massachusetts is the LOWEST in the country in Labor Rates, far below the next closest state, and we are located in one of the top five most expensive states in which to run a business. Massachusetts is more expensive than any of the surrounding New England states which are all paid significantly more for doing the same work on the same vehicles. It is high time that “equal pay for equal work” becomes a reality. When the hearing dates are set for the LRSC testimony, you MUST show your support by attending. Additionally, giving testimony addressing the issues you are facing, resulting from a suppressed Labor Rate, would be very important and impactful.
Through the efforts of the collision industry and consumers, a recent Supreme Judicial Court (SJC) decision regarding Inherent Diminished Value (IDV) was decided, and I urge you to become familiar with the significance of this decision. Please read Jim Castleman’s legal perspective on the SJC’s decision on page 34 and learn how it is another tool you and your customers can use to get proper reimbursement for the repair of vehicles and what it can mean to insurers if they fail to pay for what is required. This is no small change in how claims and claims settlements will be handled; this is all due to the sustained efforts of consumers and their legal teams who did not take “NO” as an answer. They endeavored and ultimately succeeded - a lesson for all of us!
We have been adding value to your membership through the benefits added last year. We have entered into partnerships with several companies to bring you discounted rates on dental and health care insurance, as well as ways to save you significant money on your credit card processing fees. Your participation not only saves you money, but it also financially supports our efforts. Please see the President’s message in this issue for more details. Additionally, we are helping you cover the ever-increasing costs associated with training your technicians. Grant writer Sandra Kearns of Human Power Solutions, a VAP sponsor, has
continued on pg. 40
Agawam,
7am - 6pm;
7am - 8pm; Friday 7am - 5pm; Saturday 8am - 4pm
www.fordparts.com/saratflm jloomis@saratford.com
Reader Feedback JUST4FUN
Did you catch our “Just4Fun” feature on the funniest customer experience you’ve had in our October edition? Gary Cloutier (Cloot’s Auto Body; Westfield) reached out to tell us about his experience with the Muffin Monster!
One morning, Cloutier’s wife dropped her Dunkin Donuts tea and muffin on the front counter before popping into the shop to greet the team. A customer came in to request an estimate on her RV and pointed Cloutier to where her husband was parked out back.
“I went outside to look at the RV, but instead of following me, this woman shut the door, grabbed the top off my wife’s muffin that was still sitting on the counter - and popped it into her mouth just as my wife came back into the office! My wife couldn’t believe the lady took her fricking muffin.”
Fortunately, the Cloutiers have a great sense of humor: “I copied the video from the security camera and posted it on Facebook with the caption, ‘Beware of the Muffin Monster roaming around in Westfield.’ The next day, I posted an offer for a free muffin with every estimate, joking that we were applying with the Westfield Building Department to install a drive-through window for quicker muffin distribution. Then, I bought two blow-up donuts with bites taken out of them to decorate the truck outside the shop and shared a video, ‘The MUFFIN MONSTER strikes again.’”
Not everyone thought the joke was funny. “About 10 percent of the comments attacked me and claimed elder abuse,” Cloutier says. “But the customer herself even chimed in and joked about how she would have preferred a lollipop.”
[LOCAL]
NEWS by Chasidy Rae Sisk
Deck the Truck with Boughs of Holly
‘Tis the season for fun and festivity, and most folks enjoy a holiday tradition or two that’s unique to their family. Cloot’s Auto Body in Westfield has a tradition of its own: Decorating the 1954 GMC pickup truck that sits in front of the shop.
“Adding a little company spirit puts a smile on people’s faces,” owner Gary Cloutier said. “I don’t force my team to help my wife and me decorate, but we include them in the fun. One year, I bought elf hats for all my workers, and we took a great Christmas picture of the entire group in front of the truck.”
The Cloot’s Auto Body truck isn’t just a morale booster for employees; it’s also a fun stop for locals and visitors to the area.
“People really look forward to seeing how our truck is decorated, and they even bring their kids by the shop to take pictures,” Cloutier noted. “Some people from the area will even
bring their visiting relatives over to see the truck. They expect it to be decorated. It’s crazy how much people love it.”
Cloutier’s tradition began in the summer of 2013, after his cousin posted a picture on Facebook of an old truck with flowers in the back. He originally thought it was a picture of her husband’s truck, but a year later, he found out that it was merely something she’d liked and posted. Cloutier liked the idea as well, so he “ran with it.”
“I bought a $500 truck in Bridgeport, CT to turn into a flower pot. I painted it white and added decals and lettering to use it as a sort of sign. At first, we put flowers in the truck, just like the picture, but when summer ended, we decorated for the fall. From there, it grew into decorating for Thanksgiving, Christmas, Easter and just about every other holiday.”
Over the years, the truck has been adorned with large styrofoam pearls for Mother’s Day, and it has been transformed into the Easter bunny. For Halloween, the Cloutiers erect a graveyard around the truck with headstones and skeletons.
Dressing the truck up for each holiday is a time-consuming process that takes several days, not to mention the investment. The props needed for ornamentation are huge, and in addition to buying new decor on a regular basis, Cloutier often makes his own decorations.
“We try to come up with something different each year, like when we created a giant rose and box of candy for Valentine’s Day.”
With so much effort going into the process, it’s not surprising that Cloutier grew discouraged several years ago when the truck was vandalized two nights in a row while adorned for Thanksgiving.
“My wife and I were pretty mad, and we didn’t want to do it anymore,” he recalled. “But other people were hugely pissed about it too. Local people donated some decorations as well as money for us to buy new decorations, telling us, ‘We hope this doesn’t deter you from continuing to decorate the truck!’ With that kind of support, we couldn’t disappoint everyone.”
The Cloot’s Auto Body truck is a well-known landmark: “I often tell new customers, ‘Turn by the decorated truck.’ Even people who are technically visiting the shop for the first time still know where to find the truck. People can’t help but look at it - and then my name is in the back of their head, and hopefully, they think of me the next time they’re in a collision. It was the best marketing idea I’ve ever had, and it’s paid off unbelievably.”
by Chasidy Rae Sisk
Labor Rate Special Commission Explores Connection Between Labor Rate and Tech Shortage
Could fixing the Labor Rate issue in Massachusetts help attract more new talent to the industry? Several members of the Labor Rate Special Commission (LRSC) seem to think so!
Established pursuant to Chapter 24, Section 130 of the Acts of 2021, the LRSC was created to review issues related to auto body rates and the auto body industry. In addition to government representatives, the commission includes three insurance representatives, three members of the auto repair industry appointed by AASP/MA, a vo-tech school/program representative and a licensed motor vehicle dealer appointed by the Massachusetts State Automobile Dealers Association (MSADA).
“When collision students hear about the wages that previous program graduates make in comparison to what they could make as an electrician, carpenter or mechanic, it’s a tough sell because the difference is significant,” said Ken Stukonis, collision instructor at Assabet Valley High School (Marlborough) and the appointed vo-tech school representative for the LRSC. “It’s tough to stay in the trade when their friends are making more money doing easier work; kids entering the collision industry are up against the wall from the beginning, and that trickle down effect comes from shops not making enough money.”
While the average Labor Rate for collision repair in the Commonwealth is the lowest in the country, mechanical shops often make three times as much. This disparity is especially apparent to shops and dealerships offering both types of repairs, such as Bill DeLuca III, president of Bill DeLuca Family of Dealerships and the MSADA vehicle dealer appointee.
“Our retail price on the services side is $129.95 per hour, but in our body shop, we’re lucky to get $38 to $40 per hour. Our mechanics make more than twice what body techs do in terms of pay, and the body techs are leaving the field as a result. It’s a dying field! A lot of other dealerships rent their body shops to independents since it’s not a profitable business. I know it doesn’t make money and only operate our body shop as a matter of convenience.”
“Body shops need and deserve to receive a reasonable Labor Rate, but every year, this gets shoved under the table,” DeLuca continued. “If you don’t get paid to do the job correctly, it’s going to become increasingly harder for shops to repair these cars properly. Long-term, this is going to dramatically affect consumers. I hope
the insurance representatives appointed for the LRSC will realize this is a grave injustice and that they meet us halfway.”
One of the three AASP/MA appointees to the LRSC is Ray Belsito (Arnie’s Auto Body; Charlton).
“Labor Rate suppression impacts every stakeholder within the collision repair industry, ranging from apprentices to extremely high pricing pressure among vendor suppliers. With the LRSC, I’m hoping for an open and honest dialogue about the dysfunctional Labor Rate setting system they have now. We need insight into their current system of establishing a ‘market’ rate in Massachusetts, how it compares to other states and how they ensure their processes are up-to-date (how often they review Labor Rate and what reports are generated). We really need to put our finger on the extreme disconnect between insurers and shops in terms of Labor Rate.”
Belsito also hopes for “some truthful testimony on behalf of the insurance industry. All too often, they speak in generalities and make statements about body shops’ motives, rather than justifying theirs. If their system is fair, it should stand on its own.”
“It’s a shame that the insurance companies are controlling this by hiring lobbyists to contribute to the right campaigns to ensure this gets tabled year after year,” DeLuca agreed.
Suppressing the Labor Rate makes it difficult for the industry to attract young talent and ensure that the future generation is equipped to deal with the increasingly complex vehicles that need to be repaired.
“I don’t think [insurers] acknowledge enough how much training is involved, and the Labor Rate certainly doesn’t take that into consideration,” Stukonis pointed out. “If cars aren’t fixed correctly by certified, trained technicians, people can get injured in accidents that they shouldn’t be injured in. On the school side, we work hard to make sure students reach industry standards by teaching I-CAR curriculum. We have one of the best states in the country as far as high school vo-tech schools; our students graduate as Level 1 technicians in nonstructural and refinishing, but once they graduate, they have to be able to earn a living for doing the trade they’ve invested time and energy into learning.”
“All of that is held back by what the owners are taking in hourly due to Labor Rate suppression,” Stukonis continued. “If we want to attract students into the trade, we have to be able to pay
continued on pg. 44
Women’s Industry Network Accepting Nominations for 2022 Most Influential Women
Do you know an influential woman in the collision repair industry? You probably know a few!
Nominations are now open for the Women’s Industry Network’s (WIN) 2022 Most Influential Women (MIW) awards. Women working in any segment of the collision repair industry across the US and Canada can be nominated for the MIW award; nominees are not required to be WIN members to be eligible.
Nominations will be accepted through Friday, January 14, 2022. Winners will be celebrated during WIN’s 2022 Annual Conference, scheduled for May 2-4, 2022.
Established in 1999, the MIW award recognizes women whose leadership, vision and commitment to excellence have enriched the collision repair industry. Over 100 impressive women have been recognized to-date for their contributions.
Make sure that amazing woman in your shop or other collision business gets the recognition she deserves by nominating her today!
More information and a nomination form can be found online at bit.ly/2022MIWnominees.
Boch Hyundai Boch Chevrolet
Since day one, Enterprise Rent-a-Car has shared a common goal with the auto repair world – to keep consumers mobile.
The international company got its start in 1957 in a Cadillac dealership in St. Louis, MO. The concept for the rental car agency was born from a simple idea: Ensuring that a replacement vehicle was on-hand for a driver when their car went in for repairs. The idea most certainly took off, considering the Enterprise brand is recognized throughout the world with 9,500 locations globally and with Massachusetts being home to at least 100 locations.
“The business expanded into airports, retail and so on, but being a replacement rental company is the foundation of our business,” states Seth Roy, director for Enterprise’s replacement division. “When your car is down, bring it in and get your wheels, so you can move on with your life while your car is being repaired. We have always been really tight with the auto industry since the very beginning.”
Because they do play an important role in accident repair, Enterprise set out to create free production solutions that can assist customers, insurers and body shops by way of the ARMS Auto Suite. The communication tool allows body shops to electronically send updates to customers via text or email with messages that can be customized or automated. It’s set up with two-way communication, allowing the customer to reply to the shop. ARMS also stores that communication for up to three years, providing shops with access to past repair information if needed.
“It also boosts the bottom line and drives efficiencies for the shop,” comments Roy. “In my 18.5 years here, I see more and more shops trying to do more with fewer people, and it’s challenging. This allows them to update the insurance company and the customer on their own time; it lowers cycle time or what we call, ‘length of rental.’”
Enterprise believes in the importance of supporting the auto body world; therefore, they are a longtime supporter of AASP/MA and take part in annual events, such as the recent Annual Golf Outing. Currently, the company is a Platinum-level participant in the association’s Vendor Affinity Program.
Roy referred to the association’s mission statement (which reads, “By providing education and support, AASP/MA strives to assist all shops to achieve their objectives. We are an association of colleagues with a common goal: To protect the consumer, while ensuring the survival and prosperity of the businesses we represent and the industry as a whole”), stating that it “really speaks to Enterprise.”
“We believe in supporting the automotive industry and supporting the shops specifically in Massachusetts,” he stresses. “Looking at the future of the automotive industry, it’s become difficult to recruit future techs, future painters. Without organizations like AASP/MA, it’s a more challenging uphill battle. We are committed to supporting such a great organization.”
JUST4FUN
What’s Your Christmas Wish?
Let’s all ask Santa to get rid of this whole COVID dealworkforce was already hurting, schools could not be in 100 percent which hurts readying our students to be well-prepared, entry-level techs who can help fill the void that already exists.
Santa, please bring me a new paint booth!
Maybe Santa can have a ‘talk’ with insurance companies and get all our lines of supplies open so all our customers’ vehicles can get the parts they need and customers have their car returned to them in a timely manner.
A fair and accurate Labor Rate that reflects my expertise and the liability I undertake in the collision industry. A do-over on 2021.
Dave Grohl and the Foo Fighters to perform a private concert for our team with catering by chef extraordinaire Jacques Pepin! A good exit strategy and retirement plan. For the parts I ordered months ago to come in.
I’d really want an opportunity to take my entire staff out for a two-day team building experience. Take them off-site and get away from everything to have some fun.
Big. Gray. Available Today.
The Spanesi® 106 EXT Structural Straightening Bench is designed for larger and longer vehicles. The 106 EXT easily accommodates large work vans, light and medium duty trucks, and full-size SUVs.
The 106 EXT is included in OEM certification programs around the globe. Contact Spanesi Americas for a current and complete list of programs.
14 Mounting Locations Bench With Rack Gears Lift With Control Box
Loading Trolley Positioning And Ascending Ramps
Pulling Column
Universal Jig System
Loading Capacity 5,000kg (11,000lbs)
Length 6m (19.7’)
Width (Up To) 2.1m (7’)
Pulling Force 10 Tons
Spanesi Americas, Inc.
123 Ambassador Dr. STE 107
Naperville, IL 60540
224-SPANESI (224-772-6374)
www.spanesi-americas.com
facebook.com/spanesiamericas
If it’s not one thing, it’s another.
Anyone in the body shop business knows this industry comes with its fair share of challenges – far too many to mention. Adding a global pandemic to the mix only threw more fuel on the fire. Months later, as the smoke clears, cars have returned to the roads, accidents are happening, and shops are once again super busy with calendars booked weeks out for repairs. So, what happens next?
Shops can’t get parts!
All over the state (all over the country in fact), repairers are gritting their teeth every time they need to order a part that more than likely will be on backorder for weeks – or even months. The supply chain delay being felt around the world is preventing cars from being fixed and causing turmoil for office managers. Of course, insurers aren’t exactly opening their wallets any wider to accommodate the storage costs these disruptions are causing.
“It’s happening across the board,” relays AASP/MA Board Director-at-Large Adam Ioakim (Hogan and Van Auto Body; Medford). “Some OEMs are worse than others, but they all have their issues.”
He cites Honda as having the longest wait times for a good amount of their parts; in one case, a vehicle sat dormant for three months until a muffler finally came in. Why the extra long wait? The part wasn’t available in this country - the manufacturer
had to actually produce it before it could be transported to the Medford shop. Depending on the situation, the shop can manage a temporary solution if the issue is cosmetic, allowing them to call the customer back in when the part is received, but many times, cars are left in limbo.
The issue doesn’t just lie with finding out whether a part is available or not. Most often, they can find it in stock, but there is no way of knowing if it will make it to the shop - too often, they find out a week later that it’s not even in transit.
“There’s either no shipping container to get it to you, no one to unload the truck or no one to get it to you,” Ioakim explains.
While undrivable cars are just taking up space in shop lots, office managers are up to their ears working harder than ever to track parts status. Normally, there’d be a part or two on backorder once a quarter, but now Ioakim says they need to track just about every single part to keep their customers updated.
“It’s greatly increasing administrative costs and time, and we are not getting any additional compensation because insurance companies are not understanding how this affects us from an administrative standpoint – you have to follow up on every single order in some capacity.”
“It’s changed the way we do business,” states JR Force (Repairs Unlimited; Georgetown), who started ordering parts a month or so
STORY by Alana Quartuccio Bonillo
DELAYS, DISRUPTIONS & FRUSTRATIONS
Massachusetts Shops Cope as Supply Chain Woes Loom
in advance to try to keep up with demands.
Prior to the pandemic, there’d be an occasional oddball part on backorder, but now it’s a major problem with every manufacturer. These days, Force finds himself booking out eight weeks in advance, while undriveable cars sit for months with parts on national backorder with no release date.
Force was able to learn a good deal about why it’s all happening through his daughter who recently completed her studies on maritime international business.
“They can’t hire crane operators to unload the containers off the ships. Even my major supplier for parts is telling me they have containers waiting in yards to be unloaded and they can’t hire warehouse help to do that. There’s a shortage in containers. The price of steel is up, the price for containers has tripled and shipping them has tripled, and it’s all trickling down to us.”
Force doesn’t believe there will be an end to this problem anytime soon.
With just about every industry dealing with supply shortages, it’s frightening to think that the “almighty dollar,” as Force puts it, may come into play as those industries with deeper pockets may be willing to use financial influence to get things moving first.
Peter Brown of Tiny & Sons Glass (North Pembroke), who has been dealing with glass and other parts on backorder for at least
two months, imagines that things won’t get much better in the immediate future as other industries – especially essential items –will get priority. Looking ahead to the new year, he is trying to stay positive and believes things will improve.
“When COVID first hit, warehouses were jacked. As manufacturers shut down, the warehouses went through stock, and then it took a long time for manufacturers to get back up to speed. People are still getting into accidents, but the supply didn’t keep up with the demand.”
The jobbers are feeling it, too. Mike Levy of Don Kennett is witnessing what shops are dealing with when it comes to delays while their manufacturers struggle with trying to get the raw materials in to make the products.
“It’s playing a major role in our everyday, especially when it comes to liquids and supplies. We are doing the best we can to get our customers what they need or something comparable and working with the manufacturer to make sure the customer is being taken care of.”
To try to minimize delays, Don Kennett has been ordering parts early to make sure they have product in stock, but like everyone else in this business, things are out of their hands when it comes to product sitting at sea.
continued on pg. 30
continued from pg. 29
Meanwhile, the chip shortage has most dealerships looking sparse with no more than three to four brand-new cars in their showrooms. Used car sales were up for a time, but even that has dwindled.
“Used car prices are through the roof,” says Tom Schube, parts manager for Long Automotive. “If you have a car that’s a year old, or even three years old, you can probably get what you paid for it.”
However, Schube believes the shortage of new and used vehicles is actually good news for body shops.
“They are fixing everything now because you can’t replace it. I believe this is really helping the body shops. We’ve had a pretty big spike the past few months. Insurers aren’t totaling cars anymore.”
While it may keep shops busy with work, it doesn’t appear that repairers will see fewer disruptions to their production schedules in the immediate future due to these parts delays.
As Ioakim notes, “It’s nuts, and it’s more than one facet. It’s not just a part being unavailable; it’s everything in the supply chain falling apart.”
The SJC Got It Right on Diminished Value
On October 19, 2021, the Massachusetts Supreme Judicial Court (SJC) - the highest appellate court in the state - handed down a decision that has major implications for car owners and auto insurers in the Commonwealth. In McGilloway v. Safety Ins. Co., the SJC found that, with regard to third-party motor vehicle property damage claims, the responsible party’s insurer is responsible for paying not only for repair of the claimant’s vehicle, but also for any inherent diminished value (IDV) of the vehicle resulting from the loss.
In my opinion, the SJC got it right! Furthermore, their unanimous decision followed similar findings by courts in several other states. Yet, some may have found the decision surprising since almost 20 years ago, in the case of Given v. Commerce Ins. Co., the SJC found that IDV is not recoverable from an insurer on first-party collision and comprehensive auto claims. Additionally, various federal and Massachusetts lower court decisions – including the Superior Court decision in McGilloway that was appealed to the SJC – had found that IDV is also not recoverable on third-party claims. But the October 19 decision by the SJC is now the law in Massachusetts, so it doesn’t matter what those other cases say.
Background
It is generally recognized that an accident-damaged car inherently has less of a fair market value than the exact same car if it had never been damaged – no matter how well the damaged car has been repaired. Most of us know this from experience, and the point is driven home relentlessly in those ads for CARFAX that bombard us on TV. Because of CARFAX and similar services, we all now know if a car has been in an accident, and dealers are compelled to price their used car inventory accordingly.
Despite this, insurers in Massachusetts have consistently refused to recognize or pay IDV damages on claims. After all, why should they pay if they can get away without paying for it, especially since the SJC previously ruled that they do not have to pay it on first-party claims? And most lower courts in Massachusetts have agreed with the insurers on this issue for the past 20 years; however, as recognized in McGilloway, there is a significant difference in the Massachusetts auto policy in
regard to the insurer’s obligations on third-party claims versus their obligations on first-party claims.
With regard to first-party claims, the policy at the time of the Given decision said: “In any event, we [the insurer] will never pay more than what it would cost to repair or replace the damaged property.” The Court interpreted this language to conclude that the contract between the insurer and the vehicle owner limited the insurer’s payment obligation to the lesser of the cost of repair or the actual cash value of the vehicle, without any contractual obligation to pay for IDV as additional damages. The current version of the standard Massachusetts auto policy locks this in further, providing: “The most we will pay will be either the actual cash value of the auto or the cost to repair the auto, whichever is less” and also now specifically adding, “We will not pay for any decrease in value claimed to result from the loss.”
But the insurer’s contractual obligation to its insured on a third-party property damage claim is quite different. For third-party claims, the policy says, “[W]e will pay for damage or destruction of the tangible property of others caused by an accident and arising from the ownership, maintenance, or use of an auto, including loading and unloading. The amount we will pay is the amount the owner of the property is legally entitled to collect through a court judgment or settlement for the damaged property.” That is, the insurer is obligated to pay standard “tort” damages – the full amount of damages caused by the responsible party’s negligent, reckless or intentional acts. Legally, these damages are generally considered to be ALL reasonably foreseeable damages resulting from the responsible party’s actions and are not limited by any contract between the insurer and the blameless person who actually suffers the loss. The Court in McGilloway agreed.
In fact, the Court hammered home the point, saying: “[A] plain reading of the phrase ‘the amounts that person is legally entitled to collect for property damage through a court judgment or settlement’ entitles a claimant to be made whole and compensated for what he has lost... [I]f a third-party claimant’s vehicle suffers IDV even after it is fully repaired, then under... the standard policy, the insurer may be liable to
Genuine Replacement
Avoid problems down the road that will cost you time, money and customers Choose Genuine Subaru Replacement Parts, engineered to fit better today, and perform better tomorrow.
For Genuine Subaru Body Parts, contact the following Authorized Subaru Dealers:
Long Subaru
7 Sutton Rd
Webster, MA 01570
800-982-2298
Fax: 508-879-1212
tschube@longauto com
Quirk Auto Dealers
115 E Howard St
Quincy, MA 02169
Toll Free: 877-707-8475
Balise Subaru
561 Quaker Ln
Warwick, RI 02893
TOLL FREE: 800-992-6220
FAX: 800-254-3544
wparts@baliseauto com www.BaliseWholesaleParts.com
One Call, One Truck for Eleven Brands!
Patrick Subaru
247 Boston Tur npike
Shrewsbury, MA 01545
508-756-8364
Fax: 508-752-3691
www patricksubaru com
jlavalley@patrickmotors com
continued from pg. 34
the claimant for IDV damages so that he or she may be ‘made whole’ once again...The law attempts to put the plaintiff in a position as nearly as possible equivalent to his [or her] position before the tort.”
In other words, the Court found that if a damaged vehicle is worth less after a loss, even if it is skillfully repaired, then in order to make the vehicle owner whole, the vehicle owner is entitled to collect the cost of repair plus the resulting diminution in the vehicle’s value.
How will this affect future third-party auto property damage claims?
On one hand, the McGilloway case clearly benefits third-party claimants. On the other hand, insurers are unlikely to just roll over and willingly pay out huge sums for IDV damages. There are some issues to be aware of.
The court’s decision clarifies that it is the claimant’s burden to establish that there actually is diminished value resulting from the loss and also to establish the amount of IDV. The SJC sent the McGilloway case back to the Superior Court for a trial to be held on these issues.
It is not clear whether all accidents cause IDV. As an example, if an older car already had three major accidents, and is showing fading paint and rusting metal, even if prior repairs were made, there may be no further diminished value after the car is repaired. In fact, if competent repairs are performed and new parts are used to replace older failing parts, the car could be in better shape and be worth more after repair.
Even if there is IDV, how much diminished value is there, and how do you prove it? You cannot just pick a number out of thin air. Expert services already exist (thank you Bob Collins and Wreck Check) with the capability of determining IDV. But how likely is it that insurers will blindly accept IDV determined by these services? Will insurers try to use services that are more friendly to their purposes when determining IDV? Will they develop their own services to make these determinations or try to train their own in-house appraisers to be “experts” on this issue? Will CCC get involved?
How much time and money will a vehicle owner be willing to spend to establish IDV and argue with deeppocketed insurers? This will not be a situation where skilled collision shop appraisers are negotiating with their insurance counterparts. IDV is really not part of the cost of repair; it is a separate issue. In many instances, the vehicle owner may negotiate directly with their insurer on this issue.
The SJC made it clear that IDV will need to be determined on a case-by-case basis –no one formula is going to work for any two vehicles. On the other hand, if insurers are going to aggressively try to lowball IDV claims, these matters
may make good fodder for unfair claims settlement practice claims against insurers.
IDV can only be sought on third-party claims and is subject to the usual third-party claim limits. This means that the usual limits on third-party claims apply.
The claimant must first establish that the other party was more than 50 percent at fault. Then, the claimant is entitled to collect only a percentage of the damages based on each party’s comparative negligence. So if the responsible party is 90 percent at fault and the claimant is 10 percent at fault, then the claimant will be entitled to collect only 90 percent of the IDV that they can prove.
Also, the total amount that can be collected on a claim will be limited by the amount of third-party insurance coverage that the responsible party has purchased. In Massachusetts, the minimum required property damage coverage is $5,000. If this is what the responsible party has purchased, this is the most that will be available for the entirety of the claim, including repair costs, substitute transportation costs and IDV.
Can a claimant file a first-party collision claim against their own insurer for repair costs and separately seek IDV from the third party’s insurer? I don’t see why they can’t. After all, this is commonly what happens for substitute transportation costs, i.e. the claimant makes a collision loss claim against their own insurer (especially if they have “waiver of deductible” coverage for accidents for which they are not responsible) and makes a third-party claim for the rental car that they are using while their damaged vehicle is unavailable. I do not see why this would not apply to IDV claims as well.
What happens with leased vehicles? For most vehicle leases, the lessee is required to have repairs made to their damaged vehicle. The insurer pays for the repairs, and the lessee is generally required to use the claim payment funds to make the repairs.
Yet, the lessor is the true owner of the leased vehicle and (in most situations) will be the party that suffers because of the IDV, when attempting to sell the vehicle after the end of the lease. On the other hand, after an accident, the lessee is stuck for the remainder of the lease period with a vehicle that is worth less than the vehicle that they contracted for. And at the end of the lease period, the lessee may be faced with being penalized by the lessor for turning in a vehicle that is worth less than it should be, or else forced to buy the vehicle for the full contracted lease price, even though the car is worth less than it otherwise would be.
I do not know how this is going to work for leased vehicles, but it is clearly in the best interests of the lessee to discuss this with the lessor at the time of any loss for which a third-party claim can be made. This issue must have come continued on pg. 44
already been able to secure more than $200,000 in GRANT (free) money for two of our members. Please contact us for additional details.
It is important to note that we have also been steadily increasing our membership across the state. Every new member adds to our voice at the state house. Involvement is and will continue to be the key to our success. We look forward to setting up our face-to-face meetings in each zone/ chapter once again early in 2022. Our zone/chapter meetings are also key to our success, as we build camaraderie and a support network across the state. There is so much more to come. We are already developing an insurance performance rating survey, which will be updated regularly to provide for your shop to use in discussions with your customers regarding which insurers are “preferred” by collision repairers based on how they treat the insured during the claims process.
If you have any suggestions, please share them with us. If you are a member, please take advantage of everything we have to offer. If you are not a member, what are you waiting for? Join NOW so we can sooner realize a better future for everyone! See the application on page 7.
Help keep the momentum going in 2022!
CONTACT US TODAY FOR A COMPETITIVE QUOTE ON YOUR NEXT COLLISION REPAIR ESTIMATE.
BALD HILL DODGE CHRYSLER JEEP
1035 Bald Hill Rd
Warwick, RI 02886
Order Hotline: (800) 822-3015
17 delivery trucks serving RI, MA and CT daily!
BEST CHRYSLER DODGE JEEP RAM
520 Colony Place Road Plymouth, MA 02360
Order Hotline: (800) 932-7900
Fax: (781) 749-7804
www.bestjeep.com
QUIRK AUTO DEALERS
115 E. Howard Street
Quincy, MA 02169
Order Hotline: (877) 707-8475
KELLY JEEP CHRYSLER
353 Broadway Route 1 North Lynnfield, MA 01940
Order Hotline: (800) 278-8558
Fax: (781) 581-2490
Email: kjcparts@kellyauto.com
Over $1,000,000 in stock to support your business, and fast free delivery!
MCGOVERN CHRYSLER JEEP DODGE RAM
777 Washington Street
Newton, MA 02460
Order Hotline: (800) 741-7563
For the best customer service ask for Mando Bogosian
continued from pg. 38
up already in other states, and it will be important to know how any particular lessor expects these matters to be handled.
By the same token, what if a financed vehicle is damaged and has IDV after repair – and then is totaled in a subsequent collision, and because of IDV, the ACV of the vehicle is less than the amount left on the loan? Did the vehicle owner collect IDV damages for the first loss? If so, does this affect what the finance company is owed? Probably not, but I do not know for sure.
If you already had a third-party loss, can you go back now and seek IDV damages? The answer to this question is not clear either, and it is an interesting one. Under general Massachusetts tort law, the claimant can submit a claim for up to three years after an accident, so theoretically, all vehicle owners that have suffered third-party losses within the past three years could now go back and make a claim for IDV. I expect that this is unlikely to occur, particularly since insurers usually require claimants to sign full releases of all claims when making third-party payments. But who knows?
Will insurers be able to change the insurance policy to limit their liability to just the cost of repair? Thankfully, probably not. The current standard policy tracks the language that is in the property damage statute. In order to change the policy, the Massachusetts legislature would need to change statute.
Conclusion
In my opinion, the SJC made the correct decision regarding the ability to collect IDV on third-party claims, and this is going to have a significant effect on how these claims are handled. Some things are clear, but there are other parts of the IDV claim process that will require waiting to see what transpires before we know for certain what the answers are. In any case, vehicle owners in Massachusetts that suffer third-party damages are going to be much better off now than they were before October 19, 2021.
Announces
VW Group Approval
Adding to its prestigious list of OEM approvals, Pro Spot International proudly announces the Volkswagen Group has approved their SP-5.3 MIG welder, VAS 821 007, for the North American market.
“It has been a rigorous process to get to this point, and I am pleased to receive the recognition of such an industry giant as the VW group for our company and product approval,” Pro Spot President Ron Olsson states.
Introduced three years ago, Pro Spot’s SP-5.3 multi-process, double pulse MIG welder was tested and approved for aluminum, steel and MIG brazing (CUSI). Easy and quick to use, the SP-5.3 uniquely features three built-in torches, attached to a wire spool which prevents the need for changing liners and wires when swapping materials. Clicking the desired torch trigger automatically sets the welder control and gas.
Contact Pro Spot for more information at (877) 776-7768 or at ProSpot.com.
[LOCAL] NEWS
continued from pg. 16
them a good wage when they go out to work, and we haven’t seen that. Fighting the big businesses is a tall order, but I hope our work on the LRSC makes an impact.”
The special commission is tasked with the following:
The study shall include, but not be limited to: (i) an analysis of auto body labor rates in the commonwealth, including a comparison of labor rates in surrounding states; (ii) an analysis of the impact of managed competition in the automobile insurance market on labor rates; (iii) an assessment of whether current labor rates are reasonable and, if not, an evaluation of potential methods for calculating a reasonable labor rate; (iv) the number of auto body shops in the commonwealth each year from 2008 to the present, including the number of shops that have closed during that time period; and (v) an analysis of the impact of labor rates on the auto body labor workforce.
Once members are appointed, the special commission must hold at least two public hearings and file a report of its findings no later than December 31, 2021. The LRSC is waiting for the hearings to be scheduled, but the representatives we’ve spoken to are hopeful that the group can work together to achieve positive change for the future.
“Something is broken and needs to be fixed,” Belsito added.
Attorney James Castleman is a managing member of Paster, Rice & Castleman, LLC in Quincy, MA. He can be reached at (617) 472-3424 or at jcastleman@prclawoffice.com
Be sure to contact your legislators to express how important this issue is to your business. AASP/MA and New England Automotive Report will keep you informed regarding the scheduled hearing dates, and we encourage you to attend. Your presence and participation will emphasize the importance of this issue. Together, we can make a difference.
