comment 0

How Do We Get To Correct Repairs?

We need to get there, within 18 months correct repairs will not be optional and inadequate repairs will be very hard to hide. It will still be possible to hide incorrect structural repairs, but it is the ADAS systems that will force everything into the open. The owner cannot see the frame rail that should have been replaced or the improperly welded door post. But they will very quickly notice that the camera is giving wrong information or the lane departure is not working as it should. $25,000 cars have had these systems for two years now and by next year a lot of people will be driving them.

What is keeping the collective collision repair industry from getting there?

Repairers would have us think that if it was left up to them all cars would be fixed properly and safely, and everyone would be happy. The picture painted is that they cannot fix cars properly because insurance companies are interested in nothing other than profits and are preventing good, honest and contentious repairers from doing the right work.

The insurer’s message is, not surprisingly, different. In our jurisdiction of British Columbia ICBC has added at least 50 estimators province wide. In a June 18thBC Government press release the reason alluded to for this increase in staff was not to make sure that cars are repaired properly and safety, but to make sure that over-billing concerns were addressed.

In March of this year Aviva in Ontario set up a sting operation to catch fraudulent repairs and this was covered by W5 on CTV

From the repairer side the messaging is that the insurance companies are getting in the way. From the insurer side the message is that they are protecting themselves and their customers from dishonest repairers.  Neither of these positons are coming from a place of trust and collaboration.

If the insurance industry does more messaging about fraud and overbilling prevention than it does into quality control it is sending a negative, but planned, message to its customers. If the industry side continues to harp about the insurance companies preventing them from doing good work the message they are sending to their clients is that the insurance companies are who they need to be protected from. The vehicle owner will tune out both sides and make decisions on who knows what criteria.

Why is This Happening?

A very real problem that insurers face is that the repair industry is not a monolithic body made up of only one type of operator. The repair industry participants run the gamut from fully equipped, well trained and ethical to a small number who are outright dishonest. Between these two there is a range that includes both ‘sincere but not there yet’ as well as the ‘what worked last year will work today’ crowd. In this middle there are thousands of repair facilities operating with inadequate equipment and incomplete training plans for their technicians.

There has been a resistance from the industry to certification and tiering of shop capabilities. This resistance does not come from those operators who have chosen to invest and stay current. I saw a comment posted after a recent conference that ‘mom and pop’ shops need to be protected from insurance companies and backroom deals by the banner companies. The contracts between the banner companies and insurers probably should be exposed to the light of day more than they are but ‘mom and pop’ shops also have to face the reality that today’s cars cannot be repaired in under equipped facilities with untrained staff.  We once were, but we are no longer a ‘mom and pop’ industry

The banner operators are not as on side with correct repair procedures as they would like us to believe. At another conference a few weeks ago there were two comments from the banner operators that spoke to the truth. On the one hand they talked loudly about the importance of safety and training, but when asked about equipment they admitted that they license shops to carry their banner but they do not buy equipment. This means that they are delivering a product without a brand standard; there are around 600 Canadian shops flying the banners with a far broader range of capabilities and standards than the head offices would like to admit. They will get to the right standard quicker than 600 completely unaffiliated shops, but they are not there yet.

While the insurance companies do take advantage of their market control they also have a significant issue in that they have no way of knowing who they are dealing with. An unregulated industry cannot be counted on to deliver anything close to standardized predictable work. With minimal or nonexistent outside penalties for poor work the insurance companies have little choice other than to make their own rules. This can easily look like the fox guarding the chicken coop.

Looking at the above paragraphs it appears that I am putting the problem on the repair side of the industry more than the insurance side. In fact it is the solution that is being presented to the repair side. Collectively they have a lot of control and can affect real change in the overall industry.

One Solution

The concept of a self-regulated industry has been gaining traction in the last year. Self-regulation means just that; it is not certification by manufacturers or insurers but by the industry itself. Many models are available as templates or guides.

For the collision repair industry CCIAP (Canadian Collision Industry Accreditation Program) managed by the AIA nationally and the ARA in BC can serve as the nucleus for this self-regulation.

However for this self-regulation to work there needs to be some initial momentum and here is where the insurance companies can cooperate; with repairers and each other. If they all insist that as a base level all facilities repairing their cars have to have CCIAP certification they have moved together and one of them has not put themselves at a monetary disadvantage by moving ahead of peers and competitors.

Manitoba can be looked at as an example. MPI controls most of insurance in that province and has let the repair industry know that I-CAR Gold status is required to work for MPI. Of the roughly 450 Gold Class shops in Canada about 240 are in Manitoba. CCIAP is similar in spirit and objective to I-CAR Gold Class. If there were a requirement for CCIAP accreditation to do business with an insurance company many facilities would take the steps.

This help from the insurance companies works very well for them in the long run as well. They, along with the manufacturers, will continue to have a say in repair procedures and the discussions becomes a far more efficient, collaborative and open process with communications managed through a central body.

This boost from the insurance companies will allow the development of the needed critical mass. The hard work for the repairers will be to make sure that is truly industry self-regulation, run by repairers with the insurance companies kept at a distance (foxes and chicken coops again.)

Another huge advantage of an industry program is that regulation of the complex repairs we are doing is inevitable, with government safety agencies soon enough seeing the need for enforceable standards. If they see strong voluntary progress on the part of the industry, they will be far more likely to add credibility to that effort than to expend the energy and money to build their own regulatory system. The models for this relationship are also out there now.

 

Leave a Reply