CIC discussion takes ‘steering’ debate in a different direction

Detroit—The Collision Industry Conference (CIC) held this past summer in Detroit, Mich., was hardly the first time the quarterly gathering has included a discussion of “steering.” But the CIC “Governmental Committee” tried to lead the open discussion in Detroit in some new directions, including considering whether the increased complexity of vehicles may mean consumers would be better served by fewer restrictions on steering.

Steve Regan, chairman of the committee, posed a hypothetical in which an insurer knows that a customer’s chosen shop is not equipped or certified to properly repair the type of vehicle or damage involved in a claim — and may not even be able to buy the structural parts needed from the automaker — yet is prevented by anti-steering regulations from discussing that with the consumer.

“I don’t think that’s right,” Regan said. “That’s his policyholder, and he should be able to have that discussion.”

Others were less convinced. Dusty Womble, of Roger Beasley Collision Center in Austin, Texas, agreed that the Internet has led consumers — of all goods and services — to looking more than ever for recommendations. The problem, he said, is that insurers are doing too little to vet the shops they choose for their direct repair program.

“They’re not doing anything to keep the cockroaches out of our industry,” Womble said.

He acknowledged that he sought a recommendation from his homeowner’s insurance company when he needed a roofer a couple of years ago.

“Because there was a certain level of confidence I had in them having culled out the bad players in the roofing industry, but they’re not doing that in the collision industry,” Womble said. “They’re basing [shop] participation in the program on price or discounts or rebates.”

He said there should be a higher standard both for being considered a collision repair shop and for qualifying to participate in an insurer’s direct repair program.


Customer perception is the issue

Jordan Hendler of the Washington Metropolitan Auto Body Association agreed.

“If [consumers] are given a shop name, their perception or understanding is that is a reputable business that the insurer has vetted for quality,” Hendler said. “Because that’s what consumers are going to care about — quality. [But] that shop is probably not vetted for the things that consumers care about. And as long as the customer satisfaction score is still high, the shop can stay on the program. But with the numerous come-backs and re-repairs that our association has been made aware of in our area, for a multitude of insurers, I know that there’s a problem there.”

Hendler contrasted that to shop recommendations based on OEM certification, in which automakers are “vetting shops to protect their brand based on repair quality.”

“Realistically, I know it’s extremely difficult to vet shops for quality, and yet I still think it is the insurer’s responsibility and to their benefit to make sure that a shop is at least equipped and capable of performing a proper repair,” Hendler said. “But in my view [insurers] have actually backed further away [from that sort of vetting in order to reduce] their own liability in making the referral.”

Tony Passwater, of the Indiana Auto Body Association, said one of his concerns related to steering is consumers who choose a shop outside the insurer’s direct repair program. Such customers can face long delays for insurer reinspection of vehicles along with cautions that they may have to pay more out of pocket.

“When the consumer decides to got to their elected place of repair, the customer experience is made so bad today, in every way possible, that it’s almost like penalizing the consumer for making their own decision,” Passwater said. “That’s what we really need to look at.”


Steering difficult to identify

Darrell Amberson, of LaMettry’s Collision, in Minnesota, cautioned that eight years ago when he was with another company, staff came to him with examples of two customers who they said had been steered to another shop. Amberson said he contacted the local claims supervisor of the insurance company involved.

“To their credit, they investigated both situations, including listening to recordings between their staff person and the consumer,” Amberson said. “In the first case, they said the wording the [insurance company employee] chose probably crossed a line and was steering.”

The insurer told Amberson that employee was reprimanded.

“In the second one, however, the results of the recording indicated that the customer in no way was steered,” Amberson said. “She was given ample choice to go wherever she wanted. As it turned out, she was a friend of the [shop] owner but decided she wanted her car fixed elsewhere, and instead of telling us that she chose someone else, she told us the insurance company made her go there. So my point is: [Steering can be] difficult to identify. There’s often extenuating circumstances. While I know steering at times exists, it may not be as prevalent as we think.”

Regan returned to the concept that some state regulations may unduly limit an insurer’s ability to help a consumer find a shop adequately prepared to fix their specific vehicle.

“My take-away is: We may have to go into a direction of providing more assistance to the customer, rather than less, and freeing up some of those handcuffs that have been placed upon people in the industry,” Regan said.

The next CIC is Nov. 3-4, in Las Vegas, in conjunction with SEMA.

Parts & People

Parts & People is published monthly by Automotive Counseling and Publishing Company, Inc., a Colorado corporation, P.O. Box 18731 Denver, CO 80203, 303-765-4664. President-Lance Buchner. Founded by Lance Buchner and Dave Lucia.