"Prevailig Rate" Article
Luz forwarded an article about "What is the Prevailing Rate" which appeared in a past "Hammer & Dolly" (August 2008) issue. She solicited comments so here goes.
Although the author made some excellent points I don't fully agree with the concept that we should "legislate" changes. Legislation merely fills the pockets of all the lobbyists and the insurers will throw tons of money to get the final bill watered down. We would be spinning our wheels. Shops need to know their cost of doing business and charge accordingly. We need to get out of the "bid" mentality and charge what we need to fix the vehicle. Shops also need the nerve to ask for fair payment from the owner and in addition they should be filling out the State Farm survey and encouraging others to do the same. I would also strongly recommend funding an independent survey to keep the bean counters honest. The State Farm survey is really somewhat of a joke but right now it's the only thing we have. If enough people filled it out and put down realistic rates, plus doing the independent survey you would see rate movement.
Getting the government involved in our business is not the answer. Sadly I feel the Department of Insurance is almost as corrupt as Chicago/Illinois politics. I am sure California did nothing to the people who submitted a 2008 survey which falsely documented 2004 rates from M2 Collision that failed in that year. The word "fraud" comes to my mind when this sort of thing happens.
Sadly the insurance industry is dealing off the bottom of the deck. They don't really care if you starve to death or even die. Their only goal is making money and they will do anything to make that happen.
Our industry needs to get paid fairly. The average pay increase in the insurance industry is 4% a year for the past 20 years. How many in the collision industry have gotten increases like that? What is really sad is that the insurance industry is pocketing billions of dollars in the soft economy and they still want to "control" labor rates and chisel estimates.
Chasing legislation is what the insurers want us to do. It delays the process and they will simply spend enough money to control the outcome. Even if a law got passed it would not be enforced.
My suggestion is to call your neighbors and competitors and encourage them to fill out the State Farm Survey. You should not talk about how they should fill it out, only that they "should fill it out".
Submitted by Bob Isham
Although the author made some excellent points I don't fully agree with the concept that we should "legislate" changes. Legislation merely fills the pockets of all the lobbyists and the insurers will throw tons of money to get the final bill watered down. We would be spinning our wheels. Shops need to know their cost of doing business and charge accordingly. We need to get out of the "bid" mentality and charge what we need to fix the vehicle. Shops also need the nerve to ask for fair payment from the owner and in addition they should be filling out the State Farm survey and encouraging others to do the same. I would also strongly recommend funding an independent survey to keep the bean counters honest. The State Farm survey is really somewhat of a joke but right now it's the only thing we have. If enough people filled it out and put down realistic rates, plus doing the independent survey you would see rate movement.
Getting the government involved in our business is not the answer. Sadly I feel the Department of Insurance is almost as corrupt as Chicago/Illinois politics. I am sure California did nothing to the people who submitted a 2008 survey which falsely documented 2004 rates from M2 Collision that failed in that year. The word "fraud" comes to my mind when this sort of thing happens.
Sadly the insurance industry is dealing off the bottom of the deck. They don't really care if you starve to death or even die. Their only goal is making money and they will do anything to make that happen.
Our industry needs to get paid fairly. The average pay increase in the insurance industry is 4% a year for the past 20 years. How many in the collision industry have gotten increases like that? What is really sad is that the insurance industry is pocketing billions of dollars in the soft economy and they still want to "control" labor rates and chisel estimates.
Chasing legislation is what the insurers want us to do. It delays the process and they will simply spend enough money to control the outcome. Even if a law got passed it would not be enforced.
My suggestion is to call your neighbors and competitors and encourage them to fill out the State Farm Survey. You should not talk about how they should fill it out, only that they "should fill it out".
Submitted by Bob Isham
I applaud the ASA for posting the article on "Prevailing Competitive Rate" this shows to me that this organization is definitely moving in the right direction, WAY TO GO!! This will show that the Insurance "DRP" program is all about what is wrong with our industry and how manipulative these practices really are. At no time does the policy holders rights per their policy come into play. The insurance companies get a ton of concessions from the shop saving them money and an opportunity to price fix. The shops get steered work and agree to not perform, or bill for necessary procedures or materials in the repair and also get to help our industry by assisting in the manipulation of the so called survey process! OK, so were does the policy holder sit on all this? Do they get a break on their rates? Do they get a properly repaired vehicle, or do they get a concession repaired vehicle? Policies are a contract between the insurance company and the consumer. DRP'S are a contract between the insurance industry and the participating shop. OK, so again where is the consumer in all this, are the concessions that are being made at their expense explained or revealed to them? of course not. I understand that some have to do what they have to do in order to stay in business, but at who's expense? We have been saying for a long time that "PREVAILING COMPETITIVE RATE" is an insurance term and tactic to keep our industry at bay. We have also been saying that it should be called the "PREVAILING NEGOTIATED RATE" because that is exactly what it is. The time of hiding behind corporate labels, or assisting in the corruption of the everyday consumer has got to stop. we hear appraisers tell us almost everyday that (You know we cant pay that, or company policy does not allow that)but is that told to the policy holder? We deal with shops that are eager to take vehicles from our shop because the policy holder has been convinced that a shop that does not make concessions for them is (hard to deal with, Does bad work, or many other steering tactics)So again, where are the consumers rights per the policy that they have paid for, and why are some so eager to take away those rights at someone else's expense?? I literally don't get it! show me the right in any of this.
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PREVAILING RATE CALL IT WHAT YOU WANT YOU CAN GET ON THE STF WEB SITE 24/7 CHANGE YOUR RATES AT ANY TIME AND SHOP OWNER STILL WON"T GET ON TO MAKE CHANGES IT"S THAT EASY. WHAT THEY TELL US HERE IN TUCSON AZ WHAT EVER DISCOUNTS YOU GIVE TO OTHER INS CO YOU HAVE TO GIVE US. SO WE I DON"T GIVE ANYONE ANYMORE THAT"S WHAT WE HAVE TO DO AS AN INDUSTRY. THEY WILL PAY THEY WANT WHAT THE INSUED WANT"S A GOOD JOB GOOD TURN AROUND TIME AND BE HONEST
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So when and how will the consumer in general be educated, how do you get them to read the contract when they purchase Coverage, do you read it? its the consumer who will be the 2nd greatest influence in changing things the way they are, and as someone else said it will take owners of shops to stand up and say this is my minimum rate, I don't know about ya'll but as a vendor I can't sell things at or below my cost if I want to continue to eat.
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HH,
The education process starts at the first contact with the consumer. The amount of policies that are purchased from the Internet or some similar source are purchased without informing the consumer what the purchased policy consists of. The only thing that is disclosed or agreed upon are policy limits, thats it. The consumers of today are literally purchasing policies that they do not get until, like a week later in the mail. We have several customers that know their policy in and out, but your right most have no idea. We help our customers understand their policy, some care,some don't but if we keep trying hopefully one day it will catch on.!! I think that the consumer has been dooped into thinking that they have no rights when it comes to dealing with their insurance company and quite frankly the insurance companies treat most policy holders like they don't!! The fear tactic is alive and well and it is not just aimed at our industry, its everywhere. I have had the displeasure of working for an insurance company so I have learned the importance of reading everything that they send me. The consumer is #1 and will always be.
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hmmmm... Perhaps some not for profit organization should have a read before you sign public awarness seminar in every state of the union, or place ads in major newspapers or take out tv ADs or use Billboards to get the message out.
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HH,
I think that all of the above are good choices. I was under the impression that this organization could help in some of this information, as well as sharing this information from all of us
with the consumer rights groups in our state.I truly believe that once some of this information or education is out to the everyday consumer then questions will start to be asked and procedures will begin to be looked at more closely.
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