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ADE: Failed auto body shop case had benefit, lesson of consumer education

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Business Practices | Insurance | Legal | Repair Operations

Though collision repairer plaintiffs across the country suffered a major legal setback last week, consumers have been alerted to insurer practices, an industry expert said Friday.

Fostering that education should be the goal of auto body shops regardless of future legal decisions, Auto Damage Experts President Barrett Smith said, calling the recent U.S. District Court ruling “an opportunity.”

U.S. Florida Middle District Judge Gregory Presnell on Wednesday killed A&E et al v. 21st Century et al, which had served as a flagship for about two dozen similar cases across the country consolidated in his court.

In dismissing all A&E claims against top national auto insurers with prejudice (see order)  — meaning they can’t be refiled as in the past — Presnell seemed to indicate the cases brought by shops in other states would fail on the same grounds. 

“While this is certainly not the news that many quality-minded repairers were hoping for, it may not be a total ‘defeat’ or ‘the end’ as some may suggest or believe,” Smith said in a lengthy series of statements released Friday. “There are still remedies that plaintiff counsel will likely pursue to keep the litigation alive, and even if not, the insurer’s less than appropriate activities have been exposed and more and more state legislators across the country are watching and listening. More importantly perhaps, consumers are being educated.”

Though optimistic, Smith warned that some adjusters could see the ruling as “incentive to conduct themselves even more aggressively and egregiously in their day to day dealings with consumers and body repairers under the guise of reducing claims costs.”


How to compete with MSOs at SEMA Repairer Driven Education

Those wanting to learn more about how to succeed in a time of consolidation should attend “Competing with Consolidators” with David Luehr, Elite Body Shop Solutions and “Don’t Let Consolidators and MSOs Steal Your Insurance Work” with Michelle Nelson, B2B Automotive. The presentations will be at this year’s SEMA Show as part of the Society of Collision Repair Specialists’ Repairer Driven Education series. Register here.


But collision repairers have another remedy besides the law: Wake up, place the liability back on the party causing the difficulty (See more on that subject here.) and tell your customer why your perspective is the right one.

“It’s time for repairers to seek methods of conducting business in a more effective manner, that not only better edifies and serves their true customers, but also properly addresses the many liabilities often associated in the business of collision repair,” Smith said in a statement. “Repairers need to begin shifting avoidable liabilities to those they belong… unless of course the repairer is properly and fully compensated to accept them.”

“Of course the comment is in reference to insurers and while the insurer owes the repairer nothing…who’s explaining the issues and the refusal of payment, the potential outcome and associated liabilities to the consumer…their true customer?

“It’s imperative for quality-minded repairers to understand that when a repair involves insurance it is the consumer’s claim and repair professionals should be there; not only to offer and perform quality repairs, but also to properly inform and educate their customer when that level of repair cannot be met.

“Whether it is due to the consumer’s desire to save money and/or a result of the failures and/or denials of involved third-parties, consumers have a right to know and repair professionals have a professional duty and moral obligation to advise them.”

Smith also exhorted collision repairers to see anyone steering as a competitor, but noted that even direct repair program shops could see benefit from going on the aggressive to inform customers.

“Repairers need to adopt and employ proven business activities such as marketing, branding and educating their community members to pro-actively combat and nullify the third-party’s efforts to steer,” Smith said in a statement. “Simply stated, those who would steer against you must be viewed and dealt with as direct competitors. Our ADE Coaching/ Consulting clients have learned how to properly position themselves as to edify and empower their customers to combat insurer refusals and short-pays. Even those who have DRP relationships are using the systems to increase profitability. Many ADE clients have found it beneficial to divest themselves from such referral programs altogether.”

As individual shops became more aggressive, the industry as a whole would benefit.

“The more repairers who adopt such management philosophies and ‘get it’, the easier it will be for others in their market-place to get on-board and the more accountability will be placed on those who don’t.,” Smith said in a statement. “If they are not part of the solution, they may very well become part of the problem!

“Regardless of the ultimate outcome of the litigation, my hope is that repairers realize that there will be no White Knight riding in to save the day and that any positive change will be up to them, individually…which hopefully will one day turn collectively.”

More information:

All’s Not Lost in Judge’s Dismissal of FL Collision Repairer’s Lawsuits

Auto Damage Experts, Sept. 25, 2015

Featured image: Though collision repairer plaintiffs across the country suffered a major legal setback last week, consumers have been alerted to insurer practices, an industry expert said Friday. Fostering that education should be the goal of auto body shops regardless of future legal decisions, Auto Damage Experts President Barrett Smith said. (Tyler Olson/iStock/Thinkstock)