HB 291 in Montana which would redefine auto glass replacement pricing has some interesting changes. The bill was read today for the 3rd time and now returned to the house with amendments.

Key amendments would focus on prevailing competitive rates vs. the current “lowest” rate. Prohibit insurers from establishing agreements with glass brokers that set prices that repairers must meet. Finally, it would not allow insurers to require claimants to use a particular shop.

Click here for the full text of the bill.

Recently, the question on how long it should take an auto body shop to repair a vehicle has been raised by a few insurers. The reason this is a hot button topic is that insurers don’t wish to pay unnecessary days of rental car coverage if the shop is delaying the repairs.  The most common method utilized by insurers is a calculation based on total labor repair hours on an estimate divided by reasonable repair work expected during an eight hour day.  It would be easy to say that if a vehicle has 16 hours of labor time on an estimate, the work should be done in 2 days, however no facility can be expected to work 8 hours straight on one vehicle.  Parts delay issues, unforeseen circumstances, other vehicles in the shop, lunches and even weekends make a straight 8 hours unrealistic.  

This has led to an industry accepted range of what can realistically be expected. The question is, what is realistic. Some insurers say as many as  6 1/2 hours a day is expected while others say 4 hours a day is reasonable.  AutoClaims Direct conducted a quick informal survey of some large, mid-size and smaller insurers to take a pulse of what is currently accepted.  After adding them up and coming up with an average, the trend is currently a 4.75 hours per day expected work time plus weekends.  This means if an estimate has 40 labor hours, repairs would be expected to be done in 8.42 days.  With a 5 day work week, that means a two day weekend would have to be added in. The calculation would be  8.42 days plus 2 weekend days would yield an approximate 10 day repair. This would mean the vehicle owner would need 10 days of rental.  While no calculation can be perfect, this is currently the average based on the survey we completed.  Repair facilities we spoke with generally agreed with our findings but a few claimed a 1 week per $1000 dollars calculation is more accurate. 

While the perfect calculation will never be agreed upon our current informal survey shows 4.75 days/total labor hours to be the average accepted method.

Data source:  © 2009, AutoClaims Direct, DirectLink