Insurers last year were more receptive to shops which asked to be paid for not-included procedures than in 2015, according to new “Who Pays for What?”…
Faced with what it calls the lowest auto body labor rate in the country, a Massachusetts collision repair organization has asked the Legislature to throw it a bone and force insurers to pay body shops the average of five nearby states’ rates.
Cloots Auto Body and Repair owner Gary Cloutier told the Massachusetts Legislature’s Joint Finance Committee on Tuesday that insurers are living in “fantasy land” to say that the marketplace will eventually produce higher rates if merited, according to a State House News Service account posted Tuesday by Nashoba Publishing.
“This is a market question,” Massachusetts Insurance Federation Executive Director John Murphy said, according to the News Service. “Ultimately there are no cars going unrepaired in Massachusetts because of this issue. If there were, you’d be hearing about this. But apparently there are enough shops out there,” Murphy said.
But Cloutier said repairers of less complicated machines were making more than collision repairers, according to the News Service.
“When did fixing a bike, or a lawnmower, or a snow blower become more complicated than fixing a car,” Cloutier said, according to the news Service. “… They’ve created a huge mess that’s about to blow up.”
Ironically — particularly considering this is Blue State Massachusetts — the hearing saw Republican state Sen. Vinny deMacedo supporting the price controls and Democratic state Rep. Chris Walsh leaning towards the free market, according to the News Service.
Senate Bill 561 and House Bill 805 would make insurers pay shops at least what Mitchell says is the average of damage repair rates in Connecticut, New York, New Hampshire, Rhode Island and Vermont. (Other auto labor rate bills were on the agenda for Tuesday, but they appeared to be the main labor rate debate based on the News Service’s coverage.)
According to the News Service, Association of Automotive Service Providers-Massachusetts President Molly Brodeur said that her state’s shops only make an average of $37 an hour, compared to $48 nationally and $45.44 for the nearby states.
“Our labor rate in Massachusetts still remains the lowest in the country” Brodeur says in a video pitch for the bill.
If the insurer uses one of the other two estimating services (or none of them), it should still pay the larger of the Mitchell rate average or the average of what the insurer pays in all the other states, according to the bills.
This must be calcuated every two years.
“It will allow us to compete better in our marketplace,” Brodeur said.
State House News Service, July 14, 2015
State House News Service via Nashoba Publishing, July 14, 2015