Shops must service two customers: the insurer and the consumer

I’ve been developing a negotiation skills workshop for my clients and it occurred to me that there are significant differences between the quality measurements used by the insurance companies and those used by repairers. These differences are driven by many things, with the key difference being the price. What is sacrificed to accommodate pricing? How many times have you heard, “We don’t pay for that,” or “The shop down the street doesn’t charge us for that.”

Insurers often focus heavily on time and money, leaving the issue of quality to be determined by the repairer, who is, in fact, the repair professional. They alone determine whether the vehicle is repaired properly. What can be challenging is that same repair professional often cannot make an independent determination about what is right for the car, and have it paid for, without input from the insurer. After all, the customer drives away in a repaired vehicle for which the repairer assumes all the liability for the repairs.

Insurers set up service menus with their direct repair (DRP) shops. It’s very much like the difference between going for dinner at a fast-food restaurant and going out for a fine dining experience. So what happens within this discounted repair experience when repairing a collision-damaged car? Repairers may be pushing vehicles through their production processes, and cutting corners along the way, to meet insurance company mandated KPIs. At the end of the day, the insurance company is a customer and one who may be paying the bill. But repairers also have a customer in the consumer, and an ultimate responsibility to this consumer, to the car and to the public in general to ensure proper repairs are completed, regardless of KPIs.

The industry mandates that a customer have the right to choose — choose their repairer and the way in which their vehicle is fixed. But, depending on the insurer you are dealing with and how much you push, everything from the quality of the parts to the quality of the paint operation to the quality of the welds can be “negotiable” to the insurer. It is vital to support your repair work with documentation so there is no question about its necessity for a quality repair.

I speak to repairers all over the country and it isn’t a secret that they now perform 80 percent of the administrative functions for the insurer. In addition to taking on the administrative functions, DRP agreements also often set standard pricing and process requirements. In this business game we play every day, the deck is often stacked against the repair shop. So how do you stay motivated? Preparation. This preparation includes arming yourself with information. If you’re going to play the game, come to the game better prepared. What matters is always what’s best for the customer and their vehicle.

Repairers in the collision repair industry need to understand that they do control their own destiny within this process. But, they don’t know it. However, there is light at the end of the tunnel. It is in the proper identification and use of information.

The repairer must be prepared when negotiation with an insurance company takes place. This preparation is the gathering of information from as many sources as you can to justify, prove, validate, and most of all get paid for what you are doing. If an agreement cannot be reached, bring the customer into the discussion. Make copies and share the supporting documentation with the customer and explain where the deficiencies are. Explain to them that if they (the customer) want their vehicle fixed correctly, that these are the steps required to make it happen.

Never forget that they are your customer, and you have an obligation to fix the car to the industry standards of repair. Will this cause the repairer problems dealing with the insurer in the future? Perhaps, but it also sets a precedent that the repairer is prepared to justify the work  that is necessary to return a vehicle to pre-loss condition in every way.

Now let’s look at the part situation. Just because a part is intended for a particular vehicle, it doesn’t necessarily mean that it will fit. There are “standards of fit” and each person’s interpretation of what that means could be miles apart. Just like the fit. Again quality, but most of all performance should be considered as the “need” in the repair, not just cost.

Finally, estimating. Estimates are guesses. Some are better than others, but they are still guesses. Repair plans are the complete blueprint for repairing the vehicle. These require a complete and thorough disassembly process and damage analysis. These take time and cost the repairer to perform. Repairers who don’t complete a thorough and comprehensive damage analysis and blueprinting procedure are lowering the bar, impacting expectations across the entire industry.  

Knowledge will get you through the difficult times ahead. Preparation will get you through the discussions that will take place. Help insurers to understand what estimating, part and procedural processes are vital to the repair process to ensure a quality product is returned to the consumer.