An emotion that too often adversely affects repairers is the belief that creating new legislation meant to right the wrongs imposed on us by outside entities often does just the opposite. There may be a need for new legislation to protect consumers and repairers in some states, but the theory that enacting just any new legislation, no matter how unadvisedly prepared, is superior to working to enforce existing laws on states’ books, can only cripple shops’ interest. Is new legislation the key to your future, or would repairers and consumers in your state be better served by working together to enforce existing laws already on the books? What is it in us that causes us to believe that insurers will abide by new legislation when they’ve done everything but abide by laws already on the books?

Montana is one of a number of states that recently went through the arduous process of enacting legislation that was intended to be “repairer friendly”. But after insurer attorneys obviously had their say and way, the resultant laws can only further mire repairers of that state. It’s hard to imagine that a shred of competent legal representation was involved, let alone assistance from a repairer association or society that had repairers and consumers best interests at heart, in orchestrating this new legislation. In fact, it would appear it was written entirely by insurers. Consider the following, with the new/revised Montana statutes italicized, and my comments in normal print.

“An insurance company… may not… engage in any act or practice that intimidates, coerces, or threatens a claimant or that provides an incentive or inducement for a claimant to use a particular automobile body repair business or location.” Where is this law’s definition of what constitutes “intimidation”, “coercion”, and “threatening of claimants”? And what is supposed to be intended by insurers’“… providing an incentive or inducement” for a claimant to use a particular shop or location? Would insurers’ quite common practice of reducing or eliminating a claimants deductible if taken to the insurer’s DRP shop be considered “incentive or inducement”? It is one of a number of terms that remain undefined in this new law, which is convenient if you’re an insurer.

“An insurance company… may have access to the motor vehicle for purposes of preparing a competitive estimate.” While insurers have a right to inspect collision damaged vehicles to collect VIN, take photos, and the like, Montana just handed over vehicle owners’ keys to insurers, 95% of whom have no ability or motivation to write accurate estimates of repair, nor any right to attempt to write a “competitive estimate”. Shops can write “competitive estimates” because the majority have hands-on experience of each of the many steps required in repairing collision damaged vehicles. On the other hand, insurer reps generally write cost-containment sheets that reflect their primal interest in keeping their severity to a minimum… a far cry from a “competitive estimate.” Insurer reps’ having sat in on some insurer-skewed “estimating” courses and possibly a few generic I-CAR courses in no way qualifies them to write blueprints for repairs. Because of this, some shops including ours rubberstamp each insurer-generated estimate received, preferably in the presence of the insurer rep, with the words, “This insurance company paperwork is accepted for information purposes only, and will not be used to determine the methodology, extent or cost of repairs.” Office Depot will make you one of these jewels for around $40… money well spent almost anywhere but Montana.

“Except as provided in subsection (2)(b), if an insurance company has direct repair programs with automobile body repair businesses or locations, the insurance company may not limit the number of automobile body repair businesses or locations with whom it maintains direct repair programs.” Then, immediately following, the law continues (b) An insurance company may limit the number of automobile body repair businesses or locations participating in the insurance company's direct repair program to those automobile body repair businesses or locations that comply with the provisions of subsection (2)(c). This language now codifies the DRP system. In most things in life you can’t have it both ways, but apparently not so in the arena of insurer-influenced/dictated repairing. The law continues, “An insurance company is not required to establish a direct repair program in a particular market area in which the insurance company's number of policyholders does not support establishing a direct repair program with any automobile body repair business or location. Not exactly sure what this means, but it gets worse.

“Upon request, the insurance company shall provide, without prejudice or bias…” Where is this prejudice-less, unbiased insurer with which Montana’s vehicle-damaged consumers are supposed to consult? If there are no unbiased, unprejudiced collision repairers (ask yourself who does the best repairs), then there sure as Helena are no unprejudiced, unbiased insurers. Continuing, “The (unprejudiced, unbiased) insurance company shall provide the claimant (what about the insured?) with an (unprejudiced, unbiased) list that includes all automobile body repair businesses or locations that are reasonably close or convenient to the claimant…” Aside from the fact that the consumer’s locating of a competent repair shop shouldn’t be influenced in any way, shape, or form by insurers, even down to providing them a “list” of favorites, would shipping vehicles to a “repair warehouse” by railroad or car-hauler be considered “reasonably close or convenient”? Reasonably close in relation to what and to whom?

This law continues, “…and (that are) willing to provide services…” What services? Services for whom?... the vehicle owner, or the insurer? There are bulls in Montana more than willing to provide “services”. “…and that meet the insurance company's criteria…” (What happened to shops’ providing what is “reasonable and necessary” in the best interests of the insured/claimant?)

“…regarding whether the automobile body repair business or location: (i) possesses the equipment necessary to undertake repairs;…” When have insurers ever really been concerned with shops’ “possessing the equipment necessary to undertake repairs”... let alone in shops’ having the training necessary to use this “necessary equipment”, …let alone in shops’ actually using it?

“…(ii) (that the shop) undertakes training of management and technical personnel with respect to repair information and the claims process;…” Same comment as above. “…(iii)(that the shop) agrees to perform quality repairs at the prevailing competitive market price and that meet reasonable industry repair standards; Here we go again: where in this legislation is “quality repairs”, “prevailing competitive market price”, and “reasonable industry repair standards” defined. Truth be known, there are no definitions for any of these terms as they are loosely used here or anywhere else relating to the collision industry. As we’ve said so many times before, to date this industry has never had any standards other than the self-imposed standards to which individual repairers themselves adhere. Attempts at establishing repair standards in the past have been rendered toothless, in part due to the influences of certain outside entities and repairer disinterest. And why are repairers consulting insurers, as stated above and as all of this law implies, when REPAIRERS’ CONTRACT IS WITH THE VEHICLE OWNER…NOT WITH THE INSURER. Shops’ having allowed insurers to reverse the roles is one very major reason the collision industry is in the sad state it is.

“…(iv) (that the shop agrees) [“that the shop agrees”…again and again in this legislation - this has all the earmarks of a DRP “agreement”] “…(that the shop agrees) to warrant the quality of work, including refinishing, in writing to the claimant, for a period of not less than 1 year from the date of repair; Whereas most shops already warrant their work longer than a year, insurers’ warranty is that the insurer will force the shop to re-repair ad-infinitum any work deemed not “quality”, or risk legal action and/or blacklisting.

“…(v) (that the shop) agrees to inspection of its repairs and services by the insurance company and agrees that the insurance company may terminate the direct repair program with the automobile body repair business or location if the repairs and services are below the standards of quality required by the insurance company; Again I ask, on what basis can insurer reps, who have no collision repair experience themselves, “inspect the repairs and services” of the repair shop? But then, the best thing for the shop would be to be booted from their DRP so they could learn how to perform proper repairs and be paid sufficiently for their efforts. What a concept!!!

“…(vi) (that the shop) if requested, agrees to execute an agreement with the insurance company that may contain additional criteria that are not designed to unfairly limit the number of automobile body repair businesses or locations with whom the insurance company maintains direct repair programs. I’m willing to bet that no shop owner in Montana or anywhere else has the foggiest idea what the above is futilely trying to describe. But shops have no right to “execute an agreement with the insurance company that may contain additional criteria” where consumers rights are concerned.

Though this Montana legislation continues, you get the idea. There’s an old WW2 watchword, that “loose lips sink ships.” For the collision industry it might read “lousy decrees bring shops to their knees.” This is not to imply that there is never a need for new legislation. Rather, half-cocked legislative efforts, like half-cocked shotguns, have great potential for disastrous results. “Be careful what you wish for…”

As I’ve pointed out here, I’m not an attorney. If you disagree with what I see as harmful in this legislation, you’re probably an insurer or an insurer-dependent shop. But if you are one of the enlightened (which in my book indicates you can think on your own without consulting the seven-letter folks) contact me from the information below, and “let us reason together”. There is a better way, and I know what it is!... and it doesn’t involve your writing new legislation that will be skewed to your disadvantage.

Dick Strom
Modern Collision Rebuild
Cell = 206-310-2008
moderncol@qwest.net