Kevin Ellison Westway Ford kellison@vtaig.com (972) 584-9033
Brandon Gillespy Park Place BodyWerks bgillespy@parkplace.com 214-443-8250
Chad Kiffe Berli's Body & Fine Finishes chadk@berlisbody.com (512) 251-6136 Greg Luther Helfman Collision gluther@helfman.com (713) 574-5060 Logan Payne Payne & Sons Paint & Body logan@paynescollision.com (214) 321-4362 Anthony Palomo West Texas Auto Color japalomo3@yahoo.com (806) 831-7765 Corey Pigg S&W Expert Collision Repair coreyp@swcollision.com (936) 634-8361 Manuel Rubio Miracle Body &
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PRESIDENT/PUBLISHER
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VICE PRESIDENT/SALES DIRECTOR Alicia Figurelli / alicia@grecopublishing.com
EDITORIAL DIRECTOR Alana Quartuccio / alana@grecopublishing.com
SR. CONTRIBUTING EDITOR Chasidy Rae Sisk / chasidy@grecopublishing.com
PRODUCTION COORDINATOR Joe Greco / joe@grecopublishing.com
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SPECIAL CONTRIBUTORS: Burl Richards / Jill Tuggle
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President’s Message
ABAT Wants to Know: What Are You Doing Differently?
WWhat’s on my mind this month? Honestly, I’ve been thinking a lot about the same thing that’s on a lot of folks’ minds – and possibly yours too! Business is slow. Really slow. Slower than it’s been in a long time.
Why’s this happening? I believe a combination of factors are playing a role in the lack of vehicles making their way into our shop, as I discussed in my April message (which is available at grecopublishing.com/txa0425presmessage).
Based on conversations I’ve had with industry leaders, it seems like the hike in insurance premiums is a significant factor; in fact, premiums have increased by over 55 percent since February 2020, according to the US Bureau of Labor Statistics. And in Texas, that cost is expected to rise another six percent this year! With premiums already going up, policyholders are reluctant to file a claim because they’re afraid their carrier will increase that premium even more. They aren’t wrong – after the last time I filed a claim, my premiums increased for three years, at which point I’d paid the same amount in higher premiums that it would have cost to pay for the repairs myself!
Policies are also offering higher deductibles which makes people less likely to file a claim, especially if the vehicle is still driveable. That fear of submitting claims to insurers is driving up the prevalence of customers paying out of pocket. For the last few years, more substantial claims (as much as $15,000!) are being paid by the customers directly without ever involving their insurance carrier.
Claim counts are also down because of ADAS features which are preventing some accidents. Although the cost of those features makes the repairs more expensive, fewer cars need to be repaired. Couple that with inflation and interest rates going up, and we’re seeing a 20 to 30 percent reduction in market sales.
Shops that want to stay in business need to be aware of these trends, but they also need to figure out how to address the challenges that are arising. I’ve talked to some shops that rely heavily on DRP relationships, but they’re really slow as well. I’d love to
continued on pg. 22
Burl Richards ABAT President
Executive Director’s Message
New Digs for the Texas Auto Body Trade Show
MMy favorite message to write to you every year is the one where I get to make the following announcement: REGISTRATION IS OPEN for the Texas Auto Body Trade Show! And yes, this is that very message! That’s right – registration is open, booth sales are open, and as always, there will be new, fresh content and fun activities! But that’s not all…we are at a new venue!
We are now at the Marriott Dallas Allen Watters Creek Convention Center. I know what you’re thinking…that name is a mouthful. And I agree, but you are going to need to know that full name in order to get to the right place. We can take it up with them in September. But for now, I need you to head over to abat.us, follow the links for the show and get your WHOLE SHOP signed up! Just wait until you see the class offering this year – there’s even classes in Spanish! But let’s get back to the venue.
Let me start by saying that finding the right place to host a unique show like ours can be a little like finding a needle in a haystack. To land where we need to be on size, proximity and price is actually much harder than you think, but we have found it at the Marriott Dallas Allen Watters Creek Convention Center! The hotel, exhibit hall, after party and ladies event will now all be under one roof!
The exhibit hall at the Marriott Dallas Allen Watters Creek Convention Center is the perfect size for our show, and the best part is they have allowed us to secure dates well in advance so you will notice that we have moved back to our original dates in September! The show was held in September until 2021, and we are thrilled to get back to our old date pattern and OUT of the hell’s front door temperatures of July and August in Texas.
The Marriott Dallas Allen Watters Creek Convention Center is conveniently located just north of Dallas and right off the highway, so getting there will be easy, and once you are there, you won’t need to leave! With plenty of on-site amenities and a whole shopping center just across the street, the location has all we need for a great weekend! So get signed up today, and I’ll see you September 12-13 at the Texas Auto Body Trade Show at the (say it with me one last time) Marriott Dallas Allen Watters Creek Convention Center! Whew!
Jill Tuggle
Russell & Smith Logging Big Paint Hours with USI Booths & Prep Station
Buying a paint booth is a huge investment, and there are many factors to carefully consider before selecting one Will the booth work well in a region where there’s a ton of humidity and with drastic changes in the weather? How long do you think the booth will last and will it require a lot of maintenance? Will your painters be comfortable using it ever y day and finally, will the company making the booth provide solid training and reliable customer ser vice?
To answer these questions before acquiring two Chronotech spray booths and a prep deck from USI ITALIA back in 2004, Collision Center Manager Kevin McIllveen at Russell & Smith Body Shop in Houston, TX spent six months studying the market He was looking for the best booths that matched his needs to use in a brand-new 36,000 sq ft facility that the company built from the ground up
Mcllveen, age 56, entered the industr y more than three decades ago as an estimator and has worked for Russell & Smith Body Shop since 1993 His goal with his new spray booths was to improve the efficiencies in his paint department and to accommodate his production, he said, while simultaneously saving time and energy if possible
The vetting process was arduous but worth it in the end. "We did our research so that we could make an educated decision," he said "I went to NACE two years in a row and talked to literally ever yone and asked a lot of questions We knew that this was going to be a ver y significant investment, so we took the time to perform our due diligence to cover all our bases We invested in their prep stations as well, which was another good decision, because my guys can work so much faster and effectively with five different places where we can spray We put a curtain up in the prep booth that provides us two additional spaces that are heated and properly ventilated So, when we are really jammed, we can handle the workload and maintain our cycle time without interrupting or slowing down our production "
After using them for a ver y short time, Mcllveen could clearly see that his Chronotechs were more than capable as they quickly became a centerpiece in his new, high-end, modern shop
"We have four paint teams here, consisting of a painter and a painter’s helper and we consistently log approximately 600-700 paint hours weekly,” he said “We switched to waterborne paint when we opened this facility because we want to provide a healthier climate for our employees and the community as a whole ”
we push these booths and they never let us down ”
Any issues that Russell & Smith Body Shop have encountered with their USI ITALIA booths have been rare and far between But Mcllveen feels good knowing that if called upon, the company will respond and find solutions promptly “If you do your scheduled maintenance and keep ever ything clean, these booths will last you 30 years and maybe even longer The issues that we have encountered with the Chronotechs have been minor and quickly solved, which is impressive when you think that we have been using these booths daily for the last 16 years. I tell people that these booths will be here long after I’ve retired!”
Why was Mcllveen able to improve his numbers by simply adding two USI booths? “In the end, it all comes down to their airflow because we never need blowers or additional air to cure these vehicles The fans in these Chronotechs are exceptional because they feature variable speeds, so we can switch depending on the parameters of each job. Our painters are producing an impressive product day after day, so these booths are saving us both time and money We paint an average of 400 cars ever y month, so
After training provided by USI ITALIA, Mcllveen’s painters were able to start spraying after one day, he said "The Chronotechs are designed to work with waterborne paint, which makes it easier for our painters to do their work After a ver y short time, all of our guys were comfortable and the results were consistently exceptional.”
Mcllveen is also impressed by the Chronotech's sturdy construction and durability "Some booths are just a box, but these are wellbuilt," he said “I know, because I've seen them all and there isn't anything like a USI ITALIA booth "
His career in collision repair industr y has been a great experience and products like his USI ITALIA spray booths and prep station are a part of that, he said “We haven’t had to furlough anybody here and that’s because we value our people and, in the end, our Chronotechs are part of the team ”
50 Years and Counting: Larry Cernosek Celebrated for Business Longevity
Few businesses are built to last. According to 2024 data from the US Bureau of Labor Statistics, nearly 40 percent of businesses fail within the first five years and more than 65 percent falter within five years. Just over 20 percent survive to reach their 20th anniversary. It’s a pretty rare accomplishment for any business to stay viable for half a century, and such a feat certainly deserves to be celebrated!
ABAT Board member Larry Cernosek (Deer Park Paint & Body; Pasadena) recently received recognition for this impressive achievement when he was honored at the Capitol for being in business 50 years.
The celebration was quite an experience, according to Cernosek. “Few businesses make it to 50 years, so it was quite an honor to be recognized. Both the House and the Senate read the resolution on the floor, honoring my shop. My family and I traveled to Austin to participate in the reading, and it was pretty coincidental and meaningful that the Senate’s resolution took place on April 7, which was my father’s birthday.”
So, where did it all begin for Deer Park Paint & Body?
“I was a maintenance worker for a chemical company when I got thrown off a crane and injured,” Cernosek recalls. “The company's doctor insisted I needed surgery, but my doctor disagreed. The company paid me for two years before settling for $3,000 in 1973. When I tried to find a new job, no one would hire me because the company’s doctor had indicated that I had limitations because of the back injury he claimed I had.”
That wasn’t going to keep Cernosek down, though. He knew how to weld, and he was skilled at working on cars – he had previously restored and sold three ‘55 Chevys with assistance from his mother, who handstitched the pleats in the vehicle’s upholstery. Deciding to get into business for himself, he invested $2,000 from the settlement funds in a 1972 Chevrolet one-ton truck with the intent of purchasing a wrecker bed and offering towing services; however, “when I looked at the different wrecker beds available, everyone wanted so much money for them! So, I used the remaining $1,000 to buy steel and built a wrecker bed on my own.”
Fortunately, Cernosek had plenty of friends in the business who promised to direct work his way, so once he built the tow truck, he set about getting permits from eight local jurisdictions. “A
lot of tow truck operators didn’t want to go into those cities because they said the police harassed them, but I made sure I had the right permits and never had any problems. Because I had the right to tow in so many areas, I got plenty of towing business.”
The truck was ready to roll in April 1975, and at the same time that he was putting wheels in motion as a tow truck operator, Cernosek was also opening the doors to Deer Park Paint & Body. “I’d pick up the vehicles, tow them into the shop and repair them,” he explains.
Cernosek credits his success and business longevity to his emphasis on customer satisfaction. “They just want their car fixed; they don’t care what we have to do to get it done. We handle everything with the insurer to reduce stress for our customers, and as a result, I have so much repeat business that it’s unbelievable.”
Helping people is Cernosek’s favorite part of the business, and it’s an important factor in his life. “I’ve served on many nonprofit Boards. Additionally, my church started Sarah’s House, an emergency shelter for women who need support, and I volunteer time to repair their cars to help them get back on their feet.”
His least favorite part is dealing with insurance carriers. The industry has changed in the past 50 years, he notes. “Insurance companies were easier to deal with back then,” Cernosek insists. “Nowadays, insurance companies give people so many problems with simply processing a claim. We have to contend with insurance appraisers who don't know anything about repairing vehicles and constantly look for ways to avoid paying to repair a vehicle properly and safely because they are not liable for that repair.”
But Cernosek knows that his shop is liable for those repairs – repairs that are necessary to ensure vehicle occupants’ safety in future collisions – so he refuses to succumb to insurers’ pressures. He focuses on running his business his way, the right way, and charges what he needs to charge to continue thriving. “I can’t walk into an insurance office and dictate what I want to pay for my policy, so what gives them the right to tell me what they’re going to pay me for repairs?” he asks.
When negotiations and reasoning fails, he files a complaint with the Texas Department of Insurance (TDI). “Because Texas isn’t a direct-suit state, shops are supposed to sue the vehicle owner who will be represented by their insurance carrier, but when I file a complaint, TDI responds with an email stating it’s a civil matter and instructing me to take the insurance company to civil court. So, I do.”
He certainly does! In fact, Cernosek estimates that he’s been to court around 350 times! And he’s often successful. “I always beat them on used parts, especially suspension components, because we have no idea whether that part was damaged in a previous wreck. We’re dealing with people’s lives, and it’s not worth the risk. I love jury trials because it’s relatively easy to convince a jury to vote against an insurance company – after all, how many of them have had a problem with their repair claim in the past?”
Typically, the insurers he’s faced in court will respond more favorably on future claims…for a time. “They’ll pay my rates for a few months, but then they want to go back to the same thing,”
Larry Cernosek poses with family members and state representative after being honored at the Capitol.
Cernosek shares his frustration. “They move their adjusters around pretty often and make blanket decisions, like lowering labor rates because other insurers are paying lower rates, but that’s against antitrust guidelines because an industry cannot set rates in that manner, so I’ve got a complaint filed about that too.”
Cernosek definitely does his part to move the needle for the entire Texas collision repair industry, and that extends to his involvement with ABAT. “I have been involved in every state association for body shops,” he says, recalling how he joined ABAT when the Houston Auto Body Association merged with the statewide organization “to be unified when we go to Austin to get legislation passed to protect the consumers. All shops should be members of their state association as more members helps us have a stronger presence when trying to get legislation passed. We can share our experiences and help legislators understand why these matters are so important to our businesses.
“Our legislators don’t know anything about our industry and depend on us to educate them,” he continues, urging shops to “get to know the elected officials who represent you. That’s the only way we’re going to get anything accomplished on the legislative front.”
So, what’s next for Cernosek? “I’ll be here, repairing vehicles and working to support the industry! I’m not planning to go anywhere – I’ll be around for another 50 years if I can! I love what I do. I love going to court to fight against insurers. It’s a great way to help others and promote a better future not just for the collision repair industry but for the entire community.”
Congratulations on 50 years in business, Larry! TXA
by Chasidy
Cernosek Talks State Licensing Laws at CIC
It’s been quite a busy year for Cernosek. Shortly after receiving recognition at the state Capitol, he travelled to Richmond, VA to take part in a state licensing law panel discussion presented by the Government Relations Committee on the Collision Industry Conference (CIC) stage.
Cernosek joined Bob Redding (Automotive Service Association), Vince Pellegrini (ProColor Collision) and Michael Giarrizzo (DCR Systems, Inc.) to share real world experiences with licensing, regulations, differences between registration and licensing and related matters.
“I’ve been active in legislation for the past 45 years. We got a lot of things done that a lot of people didn’t like, but it was to better the industry,” he told the CIC audience. Cernosek explained there is no body shop license requirement in the Lone Star State, but he believes it’s not something most shops would want. There are local requirements that do need to be met via annual inspections from the local fire department.
He also shared ABAT’s current legislative efforts with the CIC audience and informed them about the newly structured membership which allows technicians to join as individual members so they can be more directly involved.
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National News
The MSO BoomWhen Will It Implode?
Running a collision repair shop is a tough gig – between contending with customers’ expectations, insurers’ demands and rising costs of, well, everything, many owners report struggles to turn a profit. Yet, for over a decade, consolidation has been ballooning forth in markets from coast to coast!
How did the MSO boom begin, and are there any indications of implosion?
Repairers first noticed an increase in consolidation in the late 1990s and early 2000s when Caliber, Gerber and Service King entered the market in California and Texas, purchasing independent shops and converting them to their brands. But beginning in 2013, more consolidators have entered the scene yearly, even as the more established MSOs continue expanding their footprints.
In 2024, larger operators acquired over 450 locations, according to Focus Advisors’ "2024 Year in Review: Some Excel on a Bumpy Road." The “Big Five” (Caliber Collision, Classic Collision, Crash Champions, Gerber Collision and Joe Hudson’s) added 319 shops last year, comprising more than $15.6 billion in annual revenue –approximately 30 percent of the industry’s market share. Add in the eight “Accelerators” identified in the report, whose $1.5 billion in annual revenue accounts for three percent of market share, and these 4,214 locations generated one-third of market share in 2024.
“Consolidation began for many reasons, but it all comes down to money,” Laura Gay (Consolidation Coach) weighs in. “Financial investment entities recognize that collision businesses generate a lot of revenue, and as the industry has changed to focusing on becoming more efficient, they realize that one way to do that is by scaling the business. In a small shop, the owner wears many hats, but in a corporate structure, specific individuals can address the needs of multiple shops. With vehicles becoming more difficult to repair, shops must invest in expensive tools and equipment, and in a MSO environment, some of these can be shared across multiple shops.
“At the same time, customers’ focus has changed from quality to speed and transparency,” she continues. “Insurers have also driven the MSO boom since a corporate structure allows them to have fewer points of contact, instead of communicating with 20 different shop owners, which allows them to control costs more. Add in labor shortages which make it difficult for independent shops to meet all of these demands, and the industry is ripe for consolidation.”
Still, the industry is very demanding, so what makes collision repair shops such an attractive acquisition, despite the many challenges faced by operators?
“Private equity continues to be attracted to the collision repair industry for several reasons,” Focus Advisors indicates, listing those reasons as “the increased complexity of the car parc [all registered vehicles in a geographic region] and a rising TCOR [total cost of risk], significant economies of scale, specialization opportunities, resilience in times of economic hardship and EBITDA [earnings before interest, taxes, depreciation and amortization] multiple expansion.”
“The collision industry is recession and internet proof,” suggests Michael LeVasseur (Precision Automotive Calibration Experts), who sold Keenan Auto Body to ABRA in 2015. “That was proven during the COVID-19 pandemic. Even when things were horrible and
barely anyone was driving, cars still needed to be repaired. And those repairs require people – you cannot repair today’s complex vehicles at home. There’s also guaranteed money through the vehicle owner or the insurer…even if a shop doesn’t necessarily receive the amount requested, payment is coming from a source with reliable money. As far as dealing with short pays and other challenges, the investors don’t care about that. They hire people who deal with the business end; as long as they see money when they look through the peephole, they’re happy with the investment.”
Auto Body Association of Texas (ABAT) President Burl Richards, who sold three of his shops to Classic Collision last year, agrees.
“The collision industry has a lot of cash flow, and typically, we get paid for services within 30 days. There’s also a lot of stability. Large MSOs know how to invest and manage their money differently than the typical shop owner who relies on the revenue for their personal income. Private equity firms have a lot of experience in the financial arena, and they know when something is profitable.”
The concept of “economies of scale” also plays a large role in creating a lucrative situation for MSOs. “With an expanded network, these companies can negotiate better deals with suppliers for parts, tools and equipment,” Gay adds. “They can also streamline administrative functions like billing, marketing and customer service, reducing costs and improving efficiency.”
“MSOs have more leverage with vendors and insurers because of their volume,” LeVasseur acknowledges, but he also offers hopeful advice for independent shops. “There’s definitely a way to counter that. Smaller shops can still offer an occasional discount, but there comes a time when too much volume, too many discounts, is not a solution. Some of the larger consolidators are pushing back on the discounts they’ve been giving now because it’s impossible to sustain an environment where you’re fixing lots of cars for bare bones.”
This is exactly the situation that some consolidators have found themselves in. “If a MSO owns 1,000 shops and a particular insurer agrees to direct all their customers to those facilities in exchange for some concession, it’s common business sense to agree,” Gay notes, “But we all know insurers will continue squeezing everything they can, and some of these consolidators have had enough and are starting to push back.”
That’s not the only thing that’s changing in the consolidation world. While the vast majority of consolidators have been focused on DRP-centric acquisitions in the past, “Consolidators are just as diverse as human beings; they also have their own personalities,” Gay points out, explaining that some consolidators, such as VIVE Collision and Quality Collision Group, seek out shops known for high quality repairs and OEM certification.
MSOs tend to make acquisitions in waves, Gay explains. “They’ll converge on a specific market for a year or two until they develop that area. Once they’ve built up their footprint, they’ll move to the next market, then rinse and repeat. That means shop owners need to be aware of where this development is taking place. You can’t take your shop to market anytime – you want to sell it when the buyers are investing in your market to realize the maximum/best terms for the sale of your business. You only sell once; timing is key, and you do not
want to leave money on the table.”
“It’s all about timing,” Richards agrees as he shares some thoughts on the process, “There are many layers and steps with definitive ebbs and flows. There are a lot of negotiations from day one when you agree to a price, until the end where you are negotiating until literally the last week or day before it's official, but all-in-all, it was a very positive experience. I still have other shops, but this sale allowed me to be able to take care of my immediate family, in the event that something happened to me. It also has opened doors for other opportunities for me.”
LeVasseur was very conscientious of timing when he decided to sell as well. “When I first began considering the possibility in 2012, experts indicated the peak time for consolidation in my market would be mid-2015, so I waited to get the most value out of the business.”
Before selling, he advises shops to prepare for the sale by organizing their books and making sure their process is replicable. “You need to have a proven production system and people who know that system. Your finances need to be in order.”
Selling his shops allowed LeVasseur to alleviate a lot of stress in dealing with the day-to-day operations, but there was a downside too. “They take over, and you don’t own it anymore. They start implementing their processes, and even if you don’t agree, you have to deal with it. The night of the sale is great; they deposit a large amount of money in your account, and that feels amazing, but over the next few days, you feel like someone ripped your kids from your arms. You’ve worked hard to build your business for years or even decades, and then BOOM! It’s over; it’s not yours anymore. You know what’s coming, but I wasn’t expecting how it would make me feel.”
That’s one of the main reasons Gay insists that no one should ever feel like they have to sell. “Sell your shop because you want or need to. Don’t do it because you feel like you’re being forced out. If you’re struggling, there are solutions. Shops cannot be successful if you are running them the same way you did 20 or 30 years ago. You need to look at ways to become more effective by attending training, developing your own niche and figuring out what sets you apart from the competition. You should always be looking at how things are done today and how they’re going to change
tomorrow. Be willing to put the work in and change, or you’ll have a very negative outcome. Complacency is the worst thing you can do in any business!”
It’s undeniable that consolidators are leading the charge for change, but will that continue to be the case…or is the MSO bubble destined to burst?
“Consolidation is here to stay, but with that being said, I wouldn't be surprised if some of them don't make it,” Richards indicates. “Just like an individually-owned business, some are better at operating and managing than others. New players enter the market all of the time, but I still believe there is plenty of room for individual-owned shops as well.”
“The bubbles never burst; they just get smaller, go behind the scenes and then come back,” LeVasseur theorizes. “The industry sees periods of heavier trading at times, but more recently, there’s less of a market for smaller shops trying to get out. Consolidators are becoming more particular about the shops they purchase because those investments require a lot of effort for smaller returns. If anyone in that market is looking to sell
by Chasidy Rae Sisk
to a MSO, I’d suggest joining a franchise, ‘advantage network’ (like CCG or 1Collision) or working with colleagues in a similar situation to put a package together to make the sale more attractive. So, consolidation is changing, but private equity investors continue to enter the space, so I don’t see it stopping anytime soon.”
Gay concurs. “There are still lots of markets that need to be built out. Some of the more mature consolidators have built their footprint as far as buying up shops and are now looking at brown and green fields, which means taking existing buildings and converting them or building new shops altogether. Newer MSOs are full-speed-ahead on buying up shops. So, who is doing what is changing, but they all seem to be a lot more methodical about their purchases now.
“Will consolidation slow down or even stop?” she ponders. “Possibly at some point, but it’s definitely not going to happen in the next three years. I’d have to reassess at that time, but for now, I’m confident the bubble isn’t going to burst anytime soon.” TXA
Cover Story Mandatory RTA: One Step from the Finish Line
The checkered flag is in hand, and Texas consumers are positioned to win as Mandatory Right to Appraisal nears the finish line!
SB 458 has received favorable votes from both the Senate and the House, and it is now on its way to Governor Greg Abbott’s desk!
The race to mandate inclusion of the Appraisal Clause in all Texas policies has been a long one, littered with many obstacles, but fans are cheering as it looks like the 89th legislative session will be the last lap in the battle to preserve this vital consumer protection.
Authored by Senator Charles Schwertner (R-District 5) and sponsored by House Representative Jay Dean (R-District 7), SB 458 was pre-filed in November 2024, and following its first reading in the Senate a mere three weeks after this legislative session opened, it was referred to the Committee on Business and Commerce. Following a public hearing where testimony was provided in support of mandating appraisal rights (recap at grecopublishing. com/txa0525coverstory), committee members unanimously voted to move the bill forward as substituted.
The second Senate reading occurred the very next week, passing to engrossment by a vote of 29:0. Rather than allow any delays, Senator Schwertner pressed the Senate to hear the bill a third and final time, and upon another unanimous vote, SB 458 passed the Senate on April 9 and was rushed along to the House the following day.
Following its first House hearing, SB 458 was referred to the House Committee on Insurance, which held a public hearing on April 23. Committee Chair Jay Dean opened the conversation: “For a long time, appraisals in residential and personal auto policies were the norm. About a decade ago, some companies began removing these provisions. Recently, OPIC [the Office of Public Insurance Counsel] made a legislative recommendation to preserve the consumer rights to invoke appraisal in dispute resolution.”
SB 458 “preserves the right to an appraisal provision insurance
policies for both personal home and auto,” Dean continued. “I believe appraisal provides a less expensive, more efficient alternative to litigation to settle the amount of loss; this means someone should be able to get their car fixed sooner after a collision, or their home restored sooner after a storm, and less litigation means lower cost for all of us consumers.”
Consumer advocate Robert McDorman (Auto Claim Specialists) provided testimony and documentation related to the immediate pecuniary benefits for Texas consumers invoking Right to Appraisal. “In the last session, Texas Watch compiled data on the impact of auto appraisal for Texas insureds and their study found that the average difference between appraisal award and the insurance offer for repair claims was $5,307.35. The average difference on total loss claims was $3,889.27. The Texas Department of Insurance (TDI) in December 2024 released their Appraisal Experience Data Call Report. The finding showed an increase between $2,100 - $5,900 more than the insurer’s initial offer. Our records show an average increase of $6,568 for repair procedure appraisal disputes and $3,964 above the carriers’ final offer for total loss claims.”
Addressing a question about the length of time it takes for appraisal to come to a conclusion, McDorman praised the time triggers included in the original version of the bill. Ware Wendell (Texas Watch) and Craig Eiland (Texas Trial Lawyers Association) stressed the importance of the bill’s time triggers and recommended adding references to the time in which the appraisal must be commenced to prevent either side from “misusing the process to [cause] delays,” Wendell suggested.
Testimony was also heard from Albert Betts (Insurance Council of Texas), who expressed the belief that SB 458 “presents a balanced approach.”
In early May, the Insurance Committee adopted the substituted bill without objection, unanimously voting to report favorably to the House with a recommendation to pass.
Racing along, SB 458 received its second hearing before the full House with Representative Dean expressing the belief, “This bill is good for Texas consumers and predictable for Texas insurers.” With an unanimous vote of 143:0, the mandatory appraisal rights legislation raced forward to its third House hearing, again receiving a unanimous vote. Representative Cody Harris (R-District 8) broke into a giant smile as he announced, “There being 143 ayes and zero nays, Senate Bill 458 is finally passed!”
SB 458 then returned to the Senate for a final vote on the changes added by the House, which were “minor or nonsubstantive,” according to the official analysis. In addition to revising one deadline from September 2025 to January 1, 2026, “The substitute clarifies that the requirement of the engrossed for an appraisal award to be made in substantial compliance with the applicable insurance policy applies to the appraisal clause of the insurance policy.”
Such minute updates did not impede the legislation’s rapid progress as the Senate concurred with the changes and pushed the bill toward the red ribbon at the finish line that is the governor’s desk where a mere signature will cause SB 458 to go into effect on September 1, 2025!
Although SB 458 has sped along its journey through the Capitol this session, the path to persuading Texas lawmakers of the need for Mandatory Appraisal Rights has not always been so smooth.
McDorman has been championing the importance of the Right to Appraisal for nearly a decade. After TDI permitted State Farm to eliminate the Appraisal Clause from its Texas policies in 2015, he began sounding the alarm, attempting to warn legislators – and anyone else who would listen! – about how this practice could negatively impact policyholders. Intent on amending the Texas Insurance Code to add provisions mandating every automotive insurance policy include an Appraisal Clause, ABAT lined up alongside McDorman to effect change; however, what they hoped would be a sprint turned into quite a marathon.
The 2021 version of the bill started strong but lagged in the final moments, dying in a Senate committee. In the last session, it gained traction and made it to the home stretch; however, although it was voted out of committee and added to the House’s intent calendar, “it was a casualty of the clock,” Wendell laments, expressing the hope that this time, “we can make it across the finish line and get it to the governor’s desk because it’s going to help a lot of consumers.”
As SB 458 enters the last leg of the 2025 race, it’s rewarding for those involved to see the increased size of the crowd cheering their support. “Eight years ago, legislators didn’t believe there was a need for mandatory appraisal rights,” McDorman recalls. “They hadn’t heard anything about it and couldn’t be convinced that it was a problem that needed their attention.”
His refusal to throw in the towel is finally paying off. “Now, they all understand how this provision protects their constituents, and I commend them for doing what’s right for all Texans, to help ensure safe roadways. Unanimous votes in the Senate and in the House…we’ve come a long way, and we’re so close to the finish line!”
ABAT President Burl Richards also expresses excitement as they round the final bend. He remembers the meeting with TDI
by Chasidy Rae Sisk
that inspired him and McDorman to enter the track “like it was yesterday. As soon as we left, I said, ‘We have to get legislation passed to make it mandatory, or every insurance company will try to take it out of their policy, like State Farm did.’ And we’ve been working on it ever since. There’s one hurdle left, but I’m confident we’re going to clear it without a problem because we’re doing the right thing for the right reason. Mandatory appraisal rights prevent insurance carriers from taking unfair shortcuts, from taking advantage of policyholders; it levels the playing field.”
“This is the furthest we’ve gotten, and I cannot wait to celebrate the victory!” ABAT Executive Jill Tuggle contributes, praising those who’ve put in the work to make it all happen. “There’s no way we’d be here, waiting to break through that legislative ribbon, if not for the tireless devotion of Robert, Burl and Ware, along with countless others, including ABAT Lobbyists Jacob Smith and Jesus Moreno of Longleaf Consulting. They deserve all the applause for ‘training’ day in and day out for years to make this happen…and once SB 458 passes, they’ll be sharing the ‘prize’ with all Texas drivers and body shops.
“For too long, our industry has convinced ourselves that we don’t stand a chance against the insurance industry because they’re so much bigger than us, but our voices do MATTER,” she stresses. “We’re so close to victory – a victory that allows us all to be winners!”
Stay tuned to Texas Automotive as we anxiously look forward to announcing a much-needed change to the Insurance Code that will protect all Lone Star consumers. TXA
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by Alana Quartuccio
Young Texas Collision Repairers Take Home Gold, Head to SkillsUSA Nationals
The future is bright for five young collision and automotive repair professionals who are on their way from the Lone Star State to Atlanta, GA this month to compete in the SkillsUSA Nationals competition!
Congratulations to the following students who took home the gold in the state SkillsUSA competition in Corpus Christ this past April:
Isaac Leo Perez (Ratteree Career Development Center; Irving) –Collision Repair Technology
Vu Mai (Collin College; McKinney) – Collision Damage Appraisal
Joshua Meza (Collin College; McKinney) – Automotive Refinishing
Peter Summers (Collin College; McKinney) – Collision Repair Technology
Grady Best (Technology, Exploration and Career Center West; Lewisville) – Automotive Refinishing
Felix Cano, Jr., collision repair instructor at Ratteree Career Development Center, is so proud of how far his student has come. His second year with Perez, he is proud to see him excel at SkillsUSA for a second year in a row – last year, Perez won silver in Waco, and this year, he went all the way to gold!
“He’s one of those kids who really takes to collision repair,” Cano relays. Early on, he observed how easily Perez took to welding and body work. The young student expressed his interest in working on lowrider bikes, which Cano says is a good learning experience because it gets into some of the really tedious stuff which is what collision repair involves.
Perez has been interested in cars from an early age. “My family grew up in California around lowriders and the whole car scene. I just found it interesting and fell in love with it to a point where I’m basically obsessed. When I was 12 or 13, I started building bikes for people.” After graduation, he plans to continue studying collision and hopes to eventually open his own shop “to build lowriders and custom trucks. I want to pass down the same obsession that I have and help others make their dreams a reality.”
the collision technology program.
“It really shows a lot of dedication. They also had to take a written test, and that can be really difficult, so it’s not just a handson competition,” she relayed.
Luna says her students take advantage of opportunities outside the classroom to grow: Mai is shadowing at Park Place BodyWerks (Dallas/Fort Worth), while Meza and Summers are training at Sherwin-Williams. Going to nationals provides a “a lot of networking opportunities and chances to win tools and training.” The competition also helps usher them in the door to a promising career. “I’ve taken students to nationals a few years back, and someone there was ready to hire my student. They know the students who compete take it seriously and can apply themselves well.”
Best of Technology, Exploration and Career Center West is also heading to Atlanta this June. Best received gold in the automotive refinishing category.
Collin College is proud to have three students advance in all three areas of the competition. All three prepped hard for the competition, spending four to six hours a day outside of school working on their skills, says Raven Luna, instructor and advisor for
According to his instructor Jonathan Hegarty, Best is a graduating senior from Marcus High School. “Grady has been in my class for two years,” reports Hegarty. “During his first year, he competed in SkillsUSA for collision repair. He received silver at district with a marginal points gap to first. He lost to one of my other students who ended up winning at state and going to nationals. Last year was the first year our campus made it to nationals. So, this will be two years in a row we’ve advanced to nationals: last year for collision repair and this year for refinishing.”
Best plans to attend Collin College for his associate's degree in applied science for auto collision, Hegarty reports. He was proud to have three students on the podium at Corpus Christi as Carson Petersen earned silver in collision repair and Hector Nevarez received bronze in automotive damage appraisal.
“This year is the first year we have competed in Refinishing and Damage Appraisal. I am very proud of Hector Nevarez for trying something new and earning bronze at State for damage appraisal,” he says, adding, Petersen “did great to receive silver for collision repair.” TXA
The Collin College SkillsUSA team (from L-R): Hermilo Garcia, Peter Summers, Elijah Coyne, Levi Suarez, Demarcus Smith, Eduardo Lopez, Pablo Sanchez, Joshua Meza, Vu Mai, Raven Luna and Winferd Vermillion
Grady Best of the Technology, Exploration and Career Center West won the Gold in Automotive Refinishing
Isaac Leo Perez and his instructor Felix Cano, Jr. of the Ratteree Career Development Center
Join Reliable Automotive Equipment’s Dave Gruskos for a conversation with leading OEM representatives of certified collision repair programs, sharing the latest news & updates from the OEM. This month, we meet Volvo’s Kenneth Park.
Certified Collision Repair Q&A With: KENNETH PARK VOLVO CARS USA
Dave Gruskos: What mandatory tools, equipment or facility parameters must a shop adhere to in order to be part of the program?
Kenneth Park: The tooling and equipment requirements for centers to participate in the program is quite long. High level centers are required to have the approved spray booths, welders and frame machines, as well as various other hand tools.
DG: Are there any new program requirements of initiatives you would like to share with our readers?
KP: We recently upgraded our welder requirements from 12,000 amps to 13,500 amps to ensure proper marrying on heavily structural repairs in certain areas of our vehicles.
DG: How does Volvo support shops as they navigate the investment in tools, equipment or facility upgrades to maintain certification and repair to OEM standards? Does Volvo have preferred vendors for purchasing required equipment and tools, and do these vendors offer support to the shops?
KP: We essentially do not require specific tools from specific vendors. We do have a list of approved/required tools such as benches, welders, spray booths, refrigerant machines, etc., that do comply with our requirements. However, most required tooling can be purchased from a vendor of the center’s choice. We find that vendors supplying these tools to locations offer support when necessary and we’re always happy to assist any of our Volvo Certified Centers when they’re looking to make a purchase.
DG: What role do certified shops play in communicating Volvo’s standards of quality and adherence to OEM repairs to consumers? What is Volvo doing to help these shops stand out to consumers in an increasingly competitive market?
KP: We believe that clear communication and continuous education are essential to promoting the core values of the Volvo Certified Collision Program. This program is built on the principle of prioritizing occupant & pedestrian safety, both before and after a collision. We emphasize this commitment across our network, empowering our certified locations to share that same message with Volvo drivers. Additionally, we engage with customers through multiple channels to raise awareness about the importance of high-quality collision repairs and the potential risks associated with improper procedures. Repair requirements can vary not only between vehicle makes but also between individual models. Factors such as structural design, advanced technology, and the materials used in manufacturing may necessitate specific techniques, tools, and training for proper repairs.
ABOUT THE PROGRAM
# of Volvo Certified Collision Center locations: 285 (Continental US & Hawaii)
Ratio of independent to retailer-owned locations: 71% independent, 29% retailer-owned
DG: How does Volvo help shops adapt to the constantly increasing complexity of vehicle technologies, like ADAS or EV repair?
KP: We require our repair centers to maintain up-to-date training through I-CAR and to actively use our proprietary software, VIDA. This is the same diagnostic and repair platform utilized by our retailers, ensuring consistency and accuracy across all service points. By using VIDA, our centers gain deeper familiarity with our vehicles, repair procedures, and all associated parts, enabling precise and efficient repairs.
DG: What unique challenges and/or opportunities do you see for certified shops who specialize in repair of Volvo EVs?
KP: The electric vehicle (EV) market has seen steady growth, and in many regions, it's now common to see EVs on the road alongside traditional internal combustion engine (ICE) vehicles. This shift presents a significant opportunity for collision centers to expand both their service capabilities and technical expertise.
However, EVs differ significantly from ICE vehicles and often require additional training, specialized tools, and a higher level of investment to ensure repairs are performed safely and correctly. These added requirements may discourage some centers from pursuing EV repairs, particularly in areas where EV adoption or charging infrastructure is still limited.
That said, in markets with a high EV car parc, the opportunity is substantial. EV owners typically seek out repair facilities that are both experienced and certified by the manufacturer. By specializing in EV repairs and obtaining the proper certifications, a center can position itself as the go-to destination for EV repairs, potentially receiving referrals from other shops that focus solely on ICE vehicles.
In Q3 of 2024, we launched the EV Tier of our certification program. This new tier includes five days of hands-on training with our vehicles, prerequisite coursework, and a suite of EV-specific tools, in addition to those already required by our Certified Collision Program.
This initiative not only ensures the highest standards of safety and quality in EV repairs but also gives customers the confidence that their vehicles are being serviced by trained and certified professionals. Only collision centers that are already Certified are eligible to pursue EV Certification.
Kenneth Park Volvo Cars USA
Ask The Expert
by Robert L. McDorman
What Are the Latest Developments with TEXAS' Mandatory Right to Appraisal Journey?
Dear Mr. McDorman,
I own and operate a collision facility in North Texas. I, like many readers, have been following the editorials on the Texas Mandatory Appraisal Bill journey and appreciate everyone’s hard work on this important consumer protection issue. I am pleased to see this important Mandatory Appraisal Bill seemingly making serious progress through the Capitol. Can you please provide another update on where we are in the process, and your expectations on whether it will finally be passed?
Thank you and many other readers so much for keeping up with the journey for mandatory appraisal rights in Texas for all motor vehicle policies. The support has been amazing and heartwarming. On May 20, the Texas House of Representatives had the third reading of SB 458, and the vote was AYE 143 and NAY 0. The Mandatory Right to Appraisal Bill SB 458 was unanimously voted out of the House. The legislative support behind SB 458 is emotionally overwhelming for me. It is so obvious our voices have been heard.
SB 458 will now go over to the Senate to vote on the added changes from the House. The changes are minor, such as moving a September 2025 deadline to January 2026 and negligible revisions in the Appraisal Clause wording. As I write this, I am unsure when the Senate will be asked to concur with these changes but hope to find as soon as possible to keep everyone updated.
Today, with great pride, I can say that my expectations have soared over the passage of SB 458 Mandatory Right to Appraisal Bill in Texas. We are one step away from seeking the Governor’s approval for SB 458! I, along with many other dedicated individuals, have spent many hours over the last eight years educating law makers, lobbyists and interested parties about why mandatory appraisal rights benefit and protect all parties involved in motor vehicle claims in Texas. I can clearly see that our hard work has paid off by the interest and questions I receive from lawmakers, lobbyists and interested parties such as yourself about this important subject. We should always keep at the front of our thoughts that “Safe Repairs Save Lives.” As reflected in the overwhelmingly positive House vote noted above, our legislators here in the great State of Texas also want safe repairs for all Texans.
The Auto Body Association of Texas (ABAT) lobbyist Jacob Smith has done a wonderful job working with lawmakers and lobbyists over the years to get us where we are today. Our lobbyist at Auto Claim Specialists, Andrew “Drew” Graham, has also done an amazing job educating and working with lawmakers and other lobbyists on the importance of mandatory appraisal rights in motor vehicle policies in Texas. I cannot say enough good things about these two men and their desire to help the insured citizens of our great state concerning mandatory appraisal rights. I love them
Robert is a recognized Public Insurance Adjuster and Certified Vehicle Value Expert specializing in motor vehicle-related insurance claim resolution. Robert can be reached by phone at (800) 736-6816, (817) 756-5482 or via email at AskTheExpert@autoclaimspecialists.com.
both and commend their dogged determination to watch over and protect the insured Texans’ interest relating to a covered loss.
The under-indemnification in repair procedure claims in Texas is rampant. Most of the estimates and supplements we see for repair claims have many overlooked (by design) safety and OEM-required operations needed to restore the loss vehicle to its pre-loss condition to the best of one's human ability. Limiting or removing the insured’s right to appraise a repair procedure is a serious safety issue. The limiting or eliminating the Right to Appraisal by the insurance carrier in a repair procedure dispute would be the nail in the coffin for safe roadways in Texas.
Our position at Auto Claim Specialists has always been that the Right to Appraisal should be a mandatory contractual right in every policy. We, the insureds, are many, and I am confident that if we join forces and all do what we can, we can be successful in securing our rights and our children’s rights to contest insurance settlement offers that would result in underpayment of losses and/or shoddy and dangerous repairs.
The spirit of the Appraisal Clause is to resolve loss disputes fairly and to do so in a timely and cost-effective manner. Invoking the Appraisal Clause removes inexperienced and biased carrier appraisers and claims handlers from the process, undermining their management’s many tricks to undervalue the loss settlement and under-indemnify the insured. Through the Appraisal Clause, loss disputes can be resolved relatively quickly, economically, equitably and amicably by unbiased, experienced, independent third party appraisers as opposed to more costly and time-consuming methods such as mediation, arbitration and litigation.
In today’s world, regarding motor vehicle insurance policies, frequent changes in claim management and claim handling policies, and non-standardized GAP Addendums, we have found it is always in the best interest of the insured or claimant to have their proposed insurance settlement reviewed by an expert before accepting. There is never an upfront fee for Auto Claim Specialists to review a motor vehicle claim or proposed settlement and give their professional opinion as to the fairness of the offer.
Please call me should you have any questions relating to the policy or covered loss. We have most insurance policies in our library. Always remember that safe repair is a quality repair, and quality equates to value. I thank you for your question and look forward to any follow-up questions that may arise.
Sincerely,
Robert L. McDorman TXA
President’s Message
continued from pg. 4
know what OEM-certified shops are seeing and if shops with fleet accounts are experiencing the same downturn. I suspect that OEM certifications are starting to really pay off for some shops that have been making those investments for nearly a decade, but I’m curious what other shop owners believe. (And I’m specifically interested in feedback from shops with standard OEM certifications; those that are certified in luxury vehicles have a different business model that may not apply as broadly.)
Is your shop feeling the pinch? If so, what are you doing about it? Have you changed any of your business practices as a result? Are you still asking for all the OEM procedures that are needed to properly repair your customers’ vehicles?
If you’ve managed to avoid the reduced workload that most of us are seeing, how did you do it? What is your shop doing differently? Was there a weather event that’s adding to your workload?
ABAT wants to know what you’re doing! Most shops are still doing their best to make sure vehicles are being repaired properly, but with the market slowing down so much, a lot of people are stuck and need a little inspiration! And we’d love to help, so please share your secrets to success with ABAT Executive Director Jill Tuggle (jill@abat.us).
After all, our industry is stronger when we all work together and help one another. That’s why you’re reading this article; it’s
why you’re a part of ABAT. You want to do better in your business, and when one of us does better, we can all do better by coming together and sharing ideas. There’s no better place to share ideas and get inspired than at the Texas Auto Body Trade Show, taking place September 12-13 at the Marriott Dallas Allen Hotel & Convention Center in Allen, TX (details at abat.us/trade-show).
burl.richards@proton.me TXA
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