SCRS Continues DOI Dialogue About Consumer Complaints

Published in Hammer & Dolly – Thomas Greco Publishing

When a vehicle owner encounters challenges in the claims process, their collision repair facility often works with them to file complaints with their local department of insurance, but they often “become frustrated with that process because they’re expecting a different outcome than these departments are scoped with and that they intend to address through their processes,” suggested Aaron Schulenburg, executive director of the Society of Collision Repair Specialists’ (SCRS) during the organization’s recent Open Board Meeting in Palm Springs, CA.

In an effort to alleviate some of these frustrations, SCRS has made an effort to open the door to more communication between its members and these departments, beginning last April when the Virginia and North Carolina Commissioners of Insurance were invited to discuss their departments’ duties (read the recap at grecopublishing.com/hammer-and-dolly-june-2023). The open dialogue was so well-received that SCRS embraced the opportunity to continue the discussion, Schulenburg explained as he introduced California Department of Insurance (DOI) Deputy Commissioner Tony Cignarale.

Sharing his background as an attorney who was raised in New York, Cignarale recalled spilling green paint all over himself in his father’s body shop. Most of his team, which specifically handles the auto repair complaints, also has various levels of prior experience, either in a body shop or as an insurance appraiser. In the past year, his department received approximately 200,000 phone calls and 50,000 written complaints, of which 42 percent were auto complaints. According to Cignarale, 90 percent of those complaints came directly from consumers, while 10 percent were filed by auto repair facilities.

“There’s three parties and us: the consumer, the shop stuck in the middle and the insurer,” he said. “And it creates tension between trying to take care of the customer and get paid what you feel you’re owed and dealing with the insurance company trying to limit what they want to pay. And that does create some issue and tension for us with regard to some of the outcomes because we’re not a judge or jury that determines how many hours for an operation. 

“But if a shop has a particular issue getting paid for performing certain operations that are OEM required procedures, it has been really helpful when shops actually send that [documentation] to us; however, we do have some issues with regard to recommended guidance because it’s not required,” Cignarale continued. “It’s just a suggestion, so it’s difficult for us to resolve those issues.”

Cignarale discussed the top five auto insurance complaints that his department receives: estimating standard operation times, labor rates, towing and storage, steering and paint estimates.

When it comes to operation times, California implemented a regulation preventing insurers from deviating from the estimating software. “Whether it’s Mitchell, CCC or Audatex, if the program says eight hours, the insurance company can’t come back and say four,” Cignarale said, though he acknowledged, “There are exceptions where they have some support through particular facts of the case or pictures that may create a factual dispute that we might not be able to resolve, but 90 percent of the time, we’ll tell them, ‘You deviated from it and need to put it at least up to that level.’”

In the case of P-pages with input time, there’s some subjectivity that requires negotiation between the insurance company and the shop which makes it difficult for the DOI to get involved. 

Unfortunately, no California law allows the DOI to regulate how insurers pay labor rates, though Cignarale’s team created a standardized labor rate survey to create a more level playing field. “Those standardized surveys seem to work very well when they’re used. Unfortunately, not every company uses it.” 

He also acknowledged that there are differences in rates between shops within the same geographic area, referencing the need for different rates based on facility size and the type of vehicles they specialize in. Another issue he identified related to insurers using DRP rates in the surveys they conducted. “We were able to get rid of that [practice], so that was really helpful.” 

When a recently passed law created confusion in regard to towing and storage charges, the California Bureau of Automotive Repair (BAR) provided useful guidance for interpreting that statute. “We were able to put a regulation and said any reasonable charges must be paid,” according to Cignarale. “We forced companies to remove those caps from those policies.”

Referring to steering as the “most difficult issue for us to deal with because it’s very subtle,” Cignarale noted that anti-steering laws passed in recent years have reduced the number of steering complaints received, but he expressed doubt that steering has actually been eliminated. “I’m sure it didn’t solve the problems; I’m sure it is still an issue.”

Inflation over the past three to four years has increased issues related to refinish material costs. According to a California regulation and statute, “The insurance company can’t deviate from the method of refinishing costs used by the body shop,” Cignarale explained. “If I’m using an hourly rate for paint in my estimate, the insurance company cannot come back and say, ‘Well, we used a paint calculator and it’s less.’ It has to be apples to apples.”

Cignarale also discussed various other issues that his department encounters, including inspections, bill deductions, sublet repairs, policy variances and rate increases. 

When asked about what happens when an insurer commits repeated violations, he noted that the department first receives a citation, which is recorded in the system, and the DOI reviews the number of violations within a given year to look at systemic issues and get them resolved and also for enforcement reasons. “If it’s a big enough issue, and it comes to us frequently enough, we’ll gather evidence and  refer it over to our market conduct area, who will then go into doing a targeted exam that will focus on a particular issue,” he said.

Regarding other states’ DOI, Cignarale pointed out that most are not as large as California’s, so they do not have the same capacity that his department has or a staff dedicated to auto complaints. He recommended that any association interested in discussing issues with their DOI should request a meeting.

During the SCRS Open Board Meeting, the association’s committees provided updates on their current initiatives. SCRS Chair Amber Alley (Barsotti’s Body and Fender; San Rafael, CA) acknowledged a professional milestone, soliciting a round of applause in recognition of Schulenburg’s 15 year anniversary as executive director. 

Schulenburg announced that SCRS has opened its call for content for SEMA 2024 and indicated that using the “opportunity to highlight voices that haven’t been in front of those audiences, finding new discussions to have that let somebody come home and be influenced, is really important to us.”

The Education Committee’s Dominic Martino (Gold Coast Auto Body; Chicago, IL) presented the Kool Tools discovered at SEMA 2023, including a POD 2.0 Pressure On Demand Steamer, Kent Automotive 4PLASTIC Bumper Push Hand Tool, an Innovative X-Stand from Innovative Tools & Technologies Inc. and more products designed to make body work easier and more efficient. 

Tools aren’t just important for shops; schools educating the next generation of collision repairers also need access to up-to-date tools and equipment. Continuing the program started in 2022 to award a level two glue pull repair system to one vo-tech school per quarter, based on nominations from SCRS affiliate organizations, Chris White (KECO Products) announced the most recent winner: Olathe Advanced Technical Center (Olathe, KS), nominated by the Kansas Auto Body Association.

Updates were provided on SCRS’s 401(k) and healthcare plans (a detailed look at these valuable member programs is available at grecopublishing.com/hd0223natlfeature).

Erin Solis (Certified Collision Group) of the Media Development Committee announced that SCRS had recently released a video of Michael Bradshaw’s (K&M Collision; Hickory, NC) IDEAS Collide presentation on culture as well as a consumer tips video on protective films with Mike Anderson (Collision Advice) and Danny Gredinberg of the Database Enhancement Gateway (DEG). The next round of videos will begin production in March. Schulenburg encouraged industry professionals to contact SCRS with any specific topics they’d like to see addressed in the consumer tip videos as the goal is to provide interactive material to help educate shop customers on different areas of the repair process. He also encouraged shops and vendors to link to the videos.

SCRS Treasurer Robert Grieve (Nylund’s Collision Center; Englewood, CO) updated attendees on the Blueprint Optimization Tool (BOT). “It’s working great for the industry. Many shops across the country have found huge success using this tool. In fact, since launching the BOT almost four years ago, well over 100,000 operations have been added to repair plans across the country,” he shared. 

Gredinberg’s DEG Report focused on explaining the purpose of the resource (see grecopublishing.com/hd0523natlfeature) and encouraging repairers to submit inquiries. In 2023 alone, a total of 202,165 inquiries were submitted, and “nearly 52 percent of the inquiries submitted for CCC users resulted in a resolution and a change in the database,” he said.

Schulenburg addressed the importance of participation in these types of conversations: “The world is run by those who show up. We’re all grateful for those of you who decide to show up for this industry, your businesses and the people we serve. The people who care deeply about making a difference show up to do so.”

In honor of National Mentoring Month, he encouraged, “Find people you can lean on. That’s what the association is about; it is a community. The people in this room are those who show up and make a difference. We’re sharpened by the best in the industry. Know that your passion and the things you do matter. And the people you do it with are critical. Find the people who believe that, surround yourself with them, and be part of that. We’ve got a lot of work to do.”