Bray’s Report

According to this article we found, it appears the Democrats in Michigan’s House of Representatives want to turn over the power to set insurance rates to a government official. This flies against the Free Market. Click here for the full story.

In the UK, auto insurers provide free legal advice to attorneys when an insured is involved in a non-fault loss. By doing this insurers get discounted rental car rates. Unfortunately this crazy alliance has caused the carriers a loss of millions. Click here for the story.

I recently spoke to some UK auto damage appraisers and was alerted to a scam some Direct Repair auto body shops have been doing when they know a field representative is never going to inspect the vehicle. Many insurers who rely strictly on a level of “trust” with a DRP facility can be taken for hundreds of thousands of dollars by this trick. Insurers in the United States who place a high regard on DRP usage could be fooled as well.  Frankly, I had never heard of the scam but what a shop does is simply use a “plastic wrap”  and create the appearance of  cracked glass, panel scratches and dents. The photo looks real enough but the truth is much different. If an auditor is not really concentrating and looking for such things, this could easily slip by.

This is yet one more reason why we are firm believers in having a trained set of eyes inspect every vehicle in person.

Here’s a sample of what we were able to accomplish right here at the office on our own personal vehicles.

In an article we found,  GM is suing a supplier of steering columns which has cost the company over 30M in repair work. GM is saying that  the columns “had excessive gear backlash, thereby causing the columns to rattle under certain driving conditions.”

Click here for the full story.

According to this posting we found, the Minnesota Commissioner of Commerce issued a Consent Order to GEICO. The company was fined $30,000 and accepted the terms which also requires GEICO to call claimant’s on older files and reimburse them for the amounts that should have been paid.  Click here for the story.

Here’s a snapshot of the current repair rates in the high desert town of Lancaster,CA

With data pulled from five years of claims processed through AutoClaims Direct’s industry leading business solution, here’s a graph showing the trends of parts usage. This shows a significant reduction in OEM use while recycled and aftermarket use has been on the rise.

In this story we found, a tow yard in Chicago was featured in a news investigation for allegedly damaging cars it tows and stores. Click here for the full story and video.

After reading the news yesterday about the ruling in which a group of repair shops won $15 million in a verdict against an insurer for allegedly dictating repair labor prices, and pushing vehicle owners to use certain shops, it will be interesting to see where this leads.

Will this ruling cause waves nationwide? It’s too early to tell but  with the Attorney General of Connecticut strongly supporting the ruling and that fact he is asking the Federal Government to review on a national level could move this issue to the forefront.

The core issue is that when Insurers attempt to dictate reduced labor rates with non DRP shops to a level they have arranged with their DRP facilities, they  are stepping into questionable territory. A more accurate labor rate analysis would survey all repair shops in an area to create what is a fair market survey.

Secondly, Insurers who strongly push DRP programs risk the appearance of steering vehicle owners to shops thus pressuring these owners to have the repairs completed at shops the Insurer has a relationship with.

Over the past five years we’ve seen many Insurers cycle through the DRP model and out and back again. Every time this happens, a new crop of managers hope that DRP’s will help their office control costs. Ultimately, however, DRP programs end up costing more in the long run in than had the Insurer simply conducted an independent appraisal which accurately assesses the damage and was fairly negotiated with a repair shop of the vehicle owner’s choice. I’ve seen all sides first hand and am a big believer that vehicle owners should always take their vehicle to the repair shop of their choice. Ninety-nine percent of the time a highly trained and skilled auto damage appraiser can work with any shop to come to an accurate, fair and reasonable assessment to put the vehicle owner’s car back into pre-accident condition. Unnecessary costs can be contained when the focus is on appraisal accuracy, use of alternative and recycled parts and reasonable negotiations rather than cut rate labor costs and funneling of vehicles to certain facilities.

Evidently an auto body repair group in Connecticut filed suit against Hartford for allegedly suppressing labor rates to DRP levels for independent shops. The shops won and were awarded $15 million and they now seek injunctive relief. Click here for the story we found.