Pike Collision Owner Don Richardson helped introduce legislation this year that would combat steering and require OEM repair procedures be used.Don Richardson sprays a 1997 Jeep TJ tub in PPG Concept “Sarge Green.”

Indiana shop owner draws line in the sand

Don Richardson says ‘no’ to short-pays, non-OEM parts, working from adjusters’ estimates, and subpar repairs

Petersburg, Ind.—Many of us start each year with the best of intentions: to lose weight, get in better shape, maybe get a handle on our personal finances. Ready to make some changes, Don Richardson, owner of Pike Collision, had a New Year’s resolution of his own, to overhaul some of his business practices.

 “I thought, ‘What a better way to measure how much those changes affect my income than to just start January 1?’” he said.

“I wanted to raise my rates [to match those of area shops], I decided my billing is going to be 100 percent off my estimate, I’m not going to accept any short-pays, and I’m not going to use used or aftermarket parts.”

Richardson had opened his first body shop in 1997 before working 11 years as an auto insurance adjuster, until 2013, when he opened his current shop, when he still had the mindset that “what the insurance company writes on an estimate, that’s it; that’s all they’re going to pay.”

The shop was profitable, but Richardson, who performs all work in the small-town shop, from estimating to painting, knew there was room for improvement. He began networking with fellow shop owners on the Facebook group, “Collision Repair Technicians United.”

“I’ve made a lot of friends with some people on there that have been doing this a lot longer than I have who have refined their processes,” he said.

And after attending a class last summer on writing better estimates by Larry Montanez, of P&L Consultants, he came back to his shop “pumped” to implement some changes based on class material recommendations.

“One of them is writing your own estimate and not working off of an insurance estimate, like a lot of shops do,” he said.

Looking over some of his older customer files, Richardson realized he had often relied on the insurance adjuster’s estimate for the initial estimate, he said, calling them to come back for a supplement once the need for additional repairs was discovered.

“The only estimates I was writing was for cash customers or those smaller insurance companies that have adjusters who would review the shop estimate.”

That meant Richardson was not getting paid for certain repair steps he was performing. Now, he said he is careful to refer to the “P” pages for not-included operations as he writes his estimate in CCC ONE. He also refers to “P” pages for the other estimating platforms in the case of an adjuster showing some as included operations. For OEM repair procedures, he relies on AllData Collision or short-duration OEM site subscriptions.

Working for the insurer taught Richardson how to examine what’s written in an insurance policy, he said. Most companies’ policies are similar, with minor wording changed from one to the next, but if he doesn’t already have an example on hand, he’ll ask a customer for a copy of theirs for him to examine.

He’s steadfast in insisting on maintaining high quality: using OEM parts, full aperture refinishing (see related article on this subject in this issue), and all required repair steps on the estimate. Doing so means he needs to advocate for his customer, but should he run into resistance from an insurer, he likewise needs their assistance.

“I’ve told people, ‘If you can’t help, I don’t know if I can fix your car properly,’” he said. “If the customer is not going to help me fight to get paid for what I’m doing to their car, I’d rather not work on it. I’m putting it out there that this is how I operate, and then leaving it up to them if they want to come back.”

Although most adjusters have been reasonable to deal with, Richardson still has friction, in particular, with one company known for its discount insurance policies.

 On a $10,000 first-party repair, the insurer refused to pay for $1,800 worth of operations it said were included, such as repairing weld burns on panels adjacent to the new quarter panel. The customer paid the shortfall to Richardson, but then she sued the insurer in small-claims court. Richardson went to court with his customer, and the case was continued to June.

“I’ll be going with her to explain the differences in my estimates and theirs,” he said.

 

Taking the fight to the statehouse

After seeing a post in the Facebook group from Brian Gerhart, owner of Brownsdale Auto Body in Brownsdale, Minn., on a 2017 Minnesota law prohibiting steering, Richardson approached Indiana Sen. Mark Messmer with his issues. Using the Minnesota legislation as a template, with a few tweaks, Messmer sponsored SB164 and asked Richardson to speak to the senator members of the Insurance Committee at the capitol in Indianapolis. Richardson got some reinforcement from the president of the Indiana Auto Body Association, Doug Martin, who owns Martin’s Body Shop in New Salisbury, Ind., and from two other shop owners.

“One of the most important parts of the bill, beyond steering, was that insurers had to follow either the procedures in the estimating software or OEM procedures,” Richardson said. Unfortunately, although the bill had passed the Senate, it was returned from the House of Representatives with amendments that Richardson said were from the influence of insurers’ lobbyists. Those amendments would have effectively neutered the new legislation, because even though it retained the requirement that repairs be “made in conformity with vehicle manufacturer repair specifications,” it also added the language “or to generally accepted industry standards,” which would be the status quo.

As Messmer was unsuccessful in getting the House to accept the bill as originally presented, it died before the end of the 2018 session. Richardson is undeterred, though, and plans to regroup with other shop owners to try again.

“This was a first for me, so I’ve learned a lot about how this works,” he said. “With what we’ve learned, we hope to refine it for next year.”

 

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.