Speaking as a repairer and a student of the industry, I see us experiencing a tug-of-war regarding Advanced Driver-Assistance System (ADAS) repairs, as well as some other vehicle manufacturer repair procedures and position statements. We are caught between the vehicle manufacturers who are telling us (with increasing specificity) how and when to perform diagnostic and repair operations and insurers who often question the validity and necessity of these operations.
Many of us experience this friction constantly with our daily interactions with insurers. I work with a number of insurers who have set their own policies regarding repair methodologies. Some of these are determined by local people and may be different in other parts of the country. Some examples include deciding under what circumstances they see the validity in scanning and calibrations that are contrary to OEMs; use of salvage parts such as quarter panels that are contrary to OEM policies; demanding use of reconditioned and aftermarket parts that are of questionable nature; not replacing front-wheel bearings when replacing surrounding components (instructing shops that they will pay for a replacement if the bearing fails afterward, a potential safety issue); and deciding upon whether or not to pay for calibrations regardless of vehicle manufacturer direction.
State legislative efforts on the part of insurers to equate factory repair standards to industry standards are further evidence. The term “industry standard” is an oxymoron, since it lacks precise definition and therefore is not a standard at all.
Assessing risk
At the root of this issue lies the willingness of the decision makers — repairers and insurers — to determine what risks they are willing to take. Insurers are in the risk management business and in many cases know how often failures (from specific repair methodology to ignoring some potential risk items) occur. Areas that don’t produce many failures or complaints are often ones that insurers are reluctant to embrace. Especially after high-profile litigation cases, repairers are increasingly reluctant to take such risks. Though the frequency of failure is low, the consequences to a repairer can be catastrophic, including significant financial loss potentially devastating to a business as well as personal injury or loss of life of a consumer.
At a recent Collision Industry Conference (CIC), an association executive director stated that she often has repairers expressing concerns over insurers who in the interest of conserving expense want them to either deviate from or ignore vehicle manufacturer repair procedures, directives or suggestions. She stated that a common phrase is “on a case-by-case basis” they will support or deny payment for specific procedures, regardless of the manufacturer’s position. She publicly asked how to address their concerns and what advice she should give them.
Owning resposibility
In my experience, many insurer representatives who are instructed to approve or deny payment for operations on a case-by-case basis — especially when regarding electronic high-tech repairs — often are without criteria for making good judgements and must guess, based on the age of the vehicle, its features and nature of the impact whether or not certain repairs should be approved. I’ve seen many examples of poorly made decisions that are void of manufacturer support and would no doubt not hold up in court. And as we know, the shop participates (at very least) in the ultimate responsibility. In most cases, the shop completely owns the responsibility.
This is among our industry’s most significant issues at this time. I sympathize with the rising costs for insurers. As a consumer, I want reasonable premiums like everyone else. I also support interacting with insurers, and all other entities in our industry, to offer cost-effective repairs. Yet at the same time I find very little opportunity for compromise. I hear some say that we are getting too many expensive features on vehicles. I hear some say that as repairers we should do more to keep repair costs down. The practicality is that we as repairers have to repair the collision vehicles that come our way. Consumers vote with their vehicle purchases and they are demonstrating that safety and convenience features are important to them.
I find it ironic that insurers have been calling for more safety features for decades and now seem alarmed, almost surprised, that as a result repair costs increase. Between consumer interest and some government influence, electric and autonomous cars are coming our way. All evidence indicates that vehicle complexity will increase, not decrease.
So…..how would I answer the question of how repairers should approach the issue and how shall they interact with insurers? First and foremost, do the right thing! Protect our consumers! Protect our businesses! Businesses are made up of people, and we have responsibilities to protect them including their futures and livelihood. Don’t jeopardize your business! When in doubt, safety should come first, certainly before cost. Of course, we should only charge for what we do and should make efforts to be competitive and cost effective. Yet we are living in a new technological world. As repairers it has become necessary to first educate ourselves and then educate our customers as well as educate insurers. While insurers should educate themselves as well, it is up to the repairer to be the expert. As proven in court, the vehicle manufacturer is the ultimate expert and has the say in what the appropriate repair procedures are. Vehicles are too complex for deviations based on assumptions and anecdotal information. And then we should charge fairly for what we do, nothing more nor less. And we should be paid accordingly.
This is more than an adjustment to our industry. Instead it is a transformation. It will no doubt occur as an evolution, but the sooner the better for all of us. As always, ethics, accountability and safety should be our guide.
