Shop owner/manager speaks out

by Anne Koppel Conway

“Our biggest problem,” said “Andrew,” who chooses to remain anonymous, “is the steering issue. I honestly don’t know a whole deal about Oregon law, but I believe if an insurance adjustor is told by a customer that he has already picked a shop, the adjustor has to stop recommending their preferred shops.”

“Some of these insurance adjustors come up with devious ways of getting around” the law, he said. Sometimes it’s blatant; sometimes, subtle.

“It is legitimate for the insurer to recommend shops to people who don’t have a clue where to take their cars, but if the customer has already picked out a shop, the adjustor should drop the DRIP,” stop mentioning it.

The subtle forms of steering Andrew mentioned included adjustors telling customers that insurers can’t guarantee the work of shops not on their preferred shop list. “That’s just bogus,” he said. “Insurers don’t guarantee any shop’s work” – whether it’s a DRIP or independent facility. The shops guarantee their own work, he said. “A lot of customers don’t understand” how it works.

And that’s a big hurdle for independent shops.

Some customers, he said, seem to get the impression from the adjustor that if they don’t “follow the insurer’s shop recommendations,” they, the customers, will be subject to “insurance rate increases or even get their policy cancelled.” So it’s not worth it to them to buck the system, as they see it. It’s a subtle threat. It’s wrong. But it works some of the time.

Some insurers imply, or state outright, that repair costs will be higher at the independent shops than at their DRIP shops. Insurers also tell customers that the length of time to complete the repair will be great at the independent facilities, so customers will be responsible for car rental days the insurer won’t pay for. “Both are bogus,” Andrew said.

One unconcealed attempt at steering Some insurers have even tried – more than once, but so far unsuccessfully, to move vehicles to one of their preferred shops when they were already, securely lodged at Andrew’s.

A customer had authorized Andrew’s shop to do the repairs on his damaged vehicle, and the car “had already been torn down. The customer had obviously chosen us.”

The Safeco adjustor then came out, inspected the dismantled car, wrote up an estimate and sent it to the customer. In addition to general information, the adjustor’s letter acknowledged, “The choice of a repair shop is yours.” But then, “Safeco,” the letter continued, “has relationships with preferred body shops that are well qualified to perform the needed repairs, and they are able to do so at the agreed price for your repairs. We can provide you with the name of a shop convenient to you.

“If you choose an alternative shop” which the customer had “you may be responsible for amounts charged in excess of the estimate.

“Safeco also has provided you with an estimate of the length of time you may reasonably expect your car to be in the shop for repairs. If Safeco is paying for a rental vehicle for you, please be aware that any unreasonable delays in the repair process by the shop of your choice,” [non-DRIP shop] “may result in Safeco not being responsible for the additional cost of a rental vehicle.”

All to no avail – the customer gave the adjustor a resounding, no. He wanted his car left at Andrew’s.

Once a DRIP shop

Andrew has been in the auto collision repair industry in Oregon for almost 35 years. His independent shop is certified. Up till a few years ago his facility had been a State Farm DRIP, Direct Repair Insurance Program shop, one of the insurer’s preferred shops.

Then he received a notice that his shop had been eliminated from the program. He was told that in order to cut costs, State Farm was streamlining its program and cutting 50% of the shops from their herd. The remaining shops were willing to discount their rates and use a certain number of aftermarket parts.

Aftermarket Parts

The big problem with aftermarket parts (AMP), as Andrew sees it, is the fit. AMP could be used, salvaged parts or parts not manufactured by the Original Equipment Manufacturer (EOM). “There’s always some vague difference from the OEMs.” Sometimes there is poor quality. “If they don’t fit, we send them back,” Andrew said.

Sometimes it isn’t that simple.

In one case, Farmers had insisted that the shop install a used car door in a vehicle, so the insurer could save $100. The customer complained.

“Farmers said,” Andrew recalls, “‘Too bad, put it on anyway.’”

So that the new paint would adhere to the metal of the used door, the wax and grease had to be washed off, he said. Farmers would not pay for this extra step. The used door arrived at his shop, and it “looked fine,” Andrew said. No one could predict what happened next.

When the new paint was applied, unwanted, previously undiscovered waves became visible on the used door.

Farmers said, Andrew remembers, “Too bad,” if there was a problem with the door, “you shouldn’t have painted it.” The insurer first refused to pay anything for the used door – parts or labor – and told the shop to install a new one.

“That’s [installing a new door] what we wanted to do in the first place,” the shop owner said.

In the end Farmers paid $38 an hour instead Andrew’s base rate of $48 and discounted what they were willing to pay for both the new and the used doors. “That’s all they would pay,” he said.

Although the customer was happy with the end results, he was “unhappy with Farmers throughout the entire process.”

Problem with customer

One customer claimed that his vehicle had never been repaired. But “even nearly perfect repairs can be spotted if you have the eye for it,” Andrew said.

________________________ Andrew’s wish: that “it wasn’t legal for auction houses to sell totaled cars.”