Sure you can
demand OEM parts! Then the Insurance Company tells you to pay the difference. Oh, sorry they NEVER want to be the "Bad Guy", so they tell
me, to tell you to pay the difference. And of course, I don't want to loose a Customer, so I get
screwed and end up eating it, more times than not.
Where do I get my information? 30 years of being in the Auto Body Repair Business, you get a real fast education, it will only take you 2 weeks to figure out that they run the business.
Price fixing, lets see where do I start?? Oh how about if you decide that you want to charge an hourly rate for repairs of lets say $40 / hour and you have a job towed in by a Customer who has XYZ Insurance. XYZ Insurance looks at the car and either writes their own estimate or accepts yours. When they write their own estimate they decide how much they are willing to pay for a particular repair, and guess what they often do? The correct answer is, "figure less than the job is worth".
One of my favorite tricks the Insurance Co's use when they write an estimate for the customer they say, "
If your Repair Shop needs more money just have them call us." The Customer thinks, "Wow what nice people they will do anything to make me happy". Then I call the Insurance Co. to say, " I need more money on this door repair, you only figured 2 hours and its a 5 hour dent, then the same Insurance Co. says "NO".
Of course the Insurance Co's only use estimating programs that meet their approval, meaning, if I am in the Estimating Software Business, and offer an estimating program that figures the jobs at a fair price. They will refuse to accept the estimating program. And then since the Insurance Co's won't accept the software, no one is going to pay $300 a month for it. So, to stay in business, I have to cut the times in my software until it meets their approval, then they will
magically accept it. Next, the Insurance Co. asks you what is you hourly rate, you tell them say, $40 for example, they will reply. "Well we only pay $35, thats what we determined is the customary rate for your area". And of course they say they determined this rate using a formula after surveying the shops in your area. Try asking for a copy of the report or the survey used to find these mysterious numbers, and you will be told, "no". We always were told that we would not be paid an hourly rate anywhere near the Transmission Repair Shop down the street, the Appliance Repair Shop in our area, and the best of all the Lawn Mower Repair Shop. Even though we had more overhead than they did, your simply told, "This is all we pay". Would'nt be cool to be able to go into the Grocery store and tell them, "I don't pay $10.99 /lb for steak" Now of course you have options you can turn the job down, starve and go bankrupt, or they will tell you, "Charge the Customer the difference", That never works because the guy down the street, who is renting an old abandoned building or working out of his garage, will tell the Customer no problem, "I'll do it for what they wrote". Of course, the fact that they have no overhead and will not be around next year to stand behind the job, are overlooked, and its bye bye to the job. The same thing happens with the after market parts, and often the used parts, you take a hit, to keep it all going.
The Insurance Companies will go to an Aftermarket Supplier, usually the worst one of all, and say, "if you want us to use your parts on our estimates we want a discount, the Supplier has no choice but to either give in or be left out in the cold. Then the Insurance Co's, tell the Supplier how much the discount will be, and how much they are allowed to discount the part to the Repair Shop. Cutting the Repair shops mark up from the standard 20-30% to say 10%.
Hows that for price fixing? Sure you don't
haveto use that supplier, but you will
not be given the money to cover the additional cost if it is higher.
They will even make deals, Like with a particular Glass Company, that
they will have them come to your shop and use your facilities, to install the glass on the car that your repairing, for your Customer, and you don't get a penny. If that Glass installer who is using you facility for free, gets hurt, slips and falls, etc., you still get the law suit though. Does that sound like a good fair business practice? Then, when that glass leaks because they are a fly by night outfit,
YOU, the guy who did not make a dime off the glass gets the irate phone call, because, the customer does not even know the Insurance Co. had the glass put in by "Schmukies Glass". (Any attempt to enlighten the Customer about these matters shatters the illusion of how wonderful the Insurance Co. is, and get you into all kinds of hot water. So,
you take the hit on
your reputation).
If you are operating a good shop with the latest equipment, using quality materials, and qualified experienced workers, it is a very tight profit margin you have to work with, you have to have a steady volume to make any real money. So, this is another way they get their hand in your pocket. they invented something called, "Direct Repair". The Insurance companies take work off the street with these programs, you can not bid on these jobs and have a fair chance at getting them, leaving you to either; starve or sign up. You need the volume to stay in business so you make a deal with the devil and agree to give them even a better price to try to stay on top. You really have no choice if you want to stay open. And yes, they can't
make people go to the "Direct Repair" shop for their repairs, but they have very crafty ways of getting around that.
As far as the anti-trust laws go, there is all kind of information out there on that,
http://www.sonnenschein.com/docs/docs_e-alert/Insurance_Antitrust_Exemption_Elimination_IRG.pdf, is just one link, every attempt to make the Insurance companies have to comply, is met with fierce resistance by the insurance lobby. (BIG MONEY)
I don't make things up, I can back up everything I say. I had to fight, almost every day with theses Clowns for the right to make a living.
I could write several books about how Insurance Companies
really operate. This is just the tip of the iceberg.
If you
really, want to know how they operate, don't go by the impression their, (the Insurance Co.'s), clever marketing leaves you with, it is all designed to give you a false impression that
they care, ignorance is bliss.
.
Get to know your local Body Shop Owner,
then ask then what the Insurance companies
really care about, one word sums it up
profit.
A non-oem warranty is usually only as good as the dealer who sells it.
