Some independent auto body repair shops in Rhode Island are launching a public relations campaign — which will include a Web site — this fall, aimed at teaching consumers about their rights when it comes to having repairs done after an accident.
It is a campaign designed to help them counter so-called direct repair programs, or DRPs, in which insurance companies have established links with local repair shops, said John DiCola, president of the Auto Body Association of Rhode Island. DiCola co-owns J. Ulbin’s Collision Service Center in Johnston.
Members of the statewide professional association, composed of about 70 shops and suppliers, fear insurance companies could begin steering customers toward “preferred” shops, leaving independent businesses scrambling, DiCola said. And, he added, ABARI members also worry that insurance programs could push unwitting consumers into accepting replacement auto parts, which are not made by their car’s original manufacturer and could be inferior.
But spokespeople for two of the largest auto insurance carriers serving Rhode Island said insurers are generally trying to help busy customers expedite repairs and keep costs competitive.
And, they contend, Rhode Island’s laws protect consumers by prohibiting the use of after-market parts in vehicles within 30 months of the manufacturing date and requiring insurance companies to tell customers if after-market parts will be used in a repair.
Neena Sinha Savage, legal counsel for the state Department of Business Regulations, said an insurer can be fined or have its license revoked or suspended if it violates these laws. DBR regulates both insurance companies and nearly 400 auto body shops here.
“Our program is committed to honoring our customer’s choice and complying with all local and state regulations. If a customer asks us, we will recommend a local shop,” explained Gary Mellini, assistant vice president of Allstate’s Priority Repair Option program, or PRO.
“In essence the concept is to streamline the repair process,” Mellini said. When a customer asks for a referral, a shop is located and an appointment is made for him, then “literally the day the car arrives at the shop, the shop will begin (assessing damage) … instead of waiting for an Allstate representative,” he added.
“We show a higher level of customer satisfaction,” said Mellini, adding about 34 percent of Allstate’s customers opt for PRO shop repairs.
“Rhode Island is a highly competitive market; people shop for price all the time. There are a lot of companies licensed to sell auto insurance there,” explained Larry Alan, director of government relations in New England for Nationwide Insurance Co. The way to satisfy customers is “to get them back in their cars as soon as possible,” he said.
Some customers prefer not to wait for a claims adjuster to inspect the damage, write an estimate, arrange for a rental car, and the post-repair inspection, Alan said.
With Nationwide’s Blue Ribbon program affiliated body shops arrange for the rental car and can begin assessing damage right away, he said. Independent shops must wait for an adjuster to visit before they can begin repairs, he added. Nationwide is the state’s fourth largest auto insurer.
Providence Business News was unable to obtain information on some of the state’s other major auto insurance carriers before deadline. The head of MetProperty’s local office was away on business. And a local claims manager for General Accident Insurance Co. said he couldn’t comment because the company is merging with another and its policies could change.
DRPs have been a part of auto industry life for at least 10 years and are regularly the topic of articles in trade publications, said Raymond Huelbig, a former ABARI president and its current treasurer. Huelbig owns Friendship Auto Body in Providence.
And ABARI has been instrumental in passing several laws in recent years to protect the auto body industry, including the law requiring insurance companies to disclose use of after-market parts and another that prevents insurance companies from steering customers to a specific shop.
But ABARI’s leadership has decided to launch this campaign now, because some customers have been confused and some members are concerned about battling insurance company guidelines to get certain repairs authorized, Huelbig said.
“We’ve started this fight, now we’re bringing it to the public awareness,” he said.
“Managed care sort of whacked us on the head,” said ABARI spokeswoman Jami Ouellette. “Now people at least know what it’s like to have an insurance company control your decisions.”
Huelbig said he recently did fight with insurance adjusters while repairing a 1993 Honda for one customer. He had to order an original equipment manufacturer (OEM) fender and an after-market fender. Then, Huelbig said, he had to show them the after-market part wouldn’t fit properly to justify using the OEM part, which cost about $100-$120 more.
“They know they’re not the same; it’s not a surprise to them,” said Huelbig, who incurred the expense of ordering the extra part and returning it.
“Sometimes the difference between the parts is only $25 but they held up the claim for three days, and were still paying for a rental,” he added.
But why bother to spend the time fighting to use an OEM part?
Huelbig said there are several reasons, including the fit and because he couldn’t be sure how the fender would hold up in an accident. After-market parts typically aren’t crash tested, he said.
Ken Roberts is vice president of communications for the Automotive Service Association in Bedford, Texas, which is a nonprofit trade association representing about 13,500 garages nationally. “More of our member shops participate in DRPs than do not. Our position is that it’s an individual business decision,” Roberts said.
But the association does play “watchdog” in two areas: preserving customers’ rights to chose a repair facility and ensuring garages aren’t “compromised” on repair quality, he added.
“Some DRPs do benefit both the consumer and the participating shops, and that’s obviously what we hope is the intent,” Roberts said.
Shops that affiliate with a DRP typically agree not to charge the insurance company for some common services, in exchange for a steady flow of business, he explained. DiCola, ABARI’s president, contends insurance companies typically ask DRPs not to charge for services such as towing, cleaning the car after repairs, and resetting electronic equipment after re-connecting the car’s battery.
Not all insurers have these exact policies. For example, Nationwide does not require auto body shops to waive towing fees, a company spokesman said.