Mark Twain once called insurance companies the "power behind the throne ... more powerful than the throne itself." With 6,726,000 police-reported crashes in 1997 alone, and the cost of repair in 1997 averaging at $2,189 (less the deductible), insurance companies have a great deal of stake in how and for how much their customers' vehicles are repaired. The average collision repair shop has the same concerns, but with different reasons -whereas the average collision repair shop is interested in doing a quality repair at the highest price, the average insurance company is interested in having a quality repair done at the lowest price.

Because of their often common customer, collision repair shops and insurance companies must find some way to reconcile, or at least combine, their differing goals for that customer so that all are satisfied. That process, however it adapts, forms a relationship.

Educational institutions, such as the Automotive Management Institute (AMI), offer classes specifically to teach managers how to work and negotiate with insurance companies, with the vision that enhancement of and increased emphasis on professional negotiations from both repair shops and insurance personnel serve to make the repair process more efficient.

The Automotive Service Association (ASA) also places emphasis on working with and cooperating with insurers.

The purpose of ASA's Collision Division Operations Committee Insurance Subcommittee is to develop a platform for dialogue between collision repairers and insurance industry executives. Such dialogue serves to identify common problems experienced by both collision repairers and insurers, and to develop viable solutions to those problems. Some of the issues the Insurance Subcommittee is working to address during 1999 are the outsourcing of claims, establishing a liaison with insurers to work with information providers, encouraging insurers to take Inter-Industry Conference on Auto Collision Repair (I-CAR) estimating classes, and gaining the support of insurers for ASA's Parts Disclosure and Consent Form and Bill.

Nick Gojmeric, co-chair of the Insurance Subcommittee, believes in its potential for good. "Finally, the collision repair industry and the insurance industry have opened a meaningful forum directed at addressing and ultimately resolving the issues that exist today between our respective businesses," he said. "Simply stated, whether you are a small shop or one of the consolidators, a small regional insurance company or the largest, one entity cannot survive without the other. And it has become evident that our customers will no longer tolerate inefficiency or poor service on either side. So working together to promote communications in the customer/insurance/repair facility triangle is not only good business sense, but it's mandatory for survival of both entities. There is no doubt that the issues we hope to solve are complex. But our ultimate goal would be for both of our industries to help the other side to do what it does best, so that both sides succeed and prosper."

Keith Kumler, also co-chair of the subcommittee, agrees. Said Kumler, "The Insurance Subcommittee has high hopes of closing the communication gaps that have existed between insurers and repairers in earlier years. It is thought that a better understanding of each business by the other will build a better product for our mutual client."

Despite good intentions on the part of many, the relationship between collision repair shops and insurance companies may not always be equitable, or even friendly -not for Bob Juniper, anyway. Juniper owns Three-C Auto Body in Columbus, Ohio, and denies that he and the insurers could ever have an amicable relationship. In fact, he denies that he and the insurance companies in his area have any relationship at all.

"My relationship is unique because I don't have a relationship. The insurers deal with us because they write a check. Most big body shops end up treating the insurers as customers -I don't. I believe they're only paying the bill, that they're hired by the consumer to pay the bill. The vehicle owner is the customer, and the insurer just happens to be lucky enough to be in the deal."

However, in at least one way, Juniper appears to have found the insurance industry very useful. "I saw ... my customers getting siphoned away to other companies [through direct repair programs (DRPs)]. It occurred to me that I had to educate consumers and get to them first. If the customer wrecks a car and goes to the insurance company first, he's going to do what they say."

So Juniper started a radio campaign. And then he founded a marketing company, Jupiter Marketing & Advertising, Inc. His radio advertisements center on various insurance company "scams." One alleges that to become part of a DRP, collision repair shops must agree to take short cuts in repairs. Another brings forth the idea of an insurance agent standing in an operating room, directing the surgeon to use certain parts and procedures. The intended result is to foster distrust in consumers about their insurance company's intentions and actions, and Juniper says he finds this very beneficial.

Now, said Juniper, "The customer comes to us before the insurer. They used to call the insurance company. If you break a leg, you don't call your insurance company first, you go to a doctor."

"We notify the insurance company [of the vehicle owner's claim] in most cases. They're livid about it. They don't have control of it, and their whole business policy is to get control." Juniper said that this has translated, conversely, into fewer conflicts between his 10 shops and the insurers. "They've realized if they bother me too much I'll involve the customer and they'll lose a customer."

Juniper's stand against insurance companies has translated into a very valuable and successful marketing tactic. Other collision repair facilities also use marketing campaigns centered on the distrust of insurers. For instance, Best of the Bay Collision Repair in San Mateo, Calif., posts on its Web site this statement: "Ask the shop if they have any affiliation with insurance company direct repair programs. If they are under contract to work for any specific insurance company they cannot work for you. Working for both sides is not ethical. Look for a repair facility without insurance company ties. The DRP agreement requires the facility to work on 'their' cars first, offering discounts on parts and labor, as well as making concessions on repair procedures. This could affect the quality and safety of repairs, resulting in loss of resale value to your vehicle, and extensive delays in repair."

Through anti-insurer advertising, some shops are able to use many customers' already-present suspicions about insurance companies in general to gather business for themselves.

There are more amicable, and more widely used, methods of dealing with insurance companies. One method of having a relationship with an insurance company is an agreement, generally referred to as a direct repair program (DRP), in which a collision repair shop, in exchange for certain concessions, is put upon an insurance company's recommended list, and thereby receives more business.

Joe Stiffler, owner of Stiffler CARSTAR Collision Service, Inc., a family-owned and operated collision repair shop in Columbus, Ohio, is one shop owner who has made DRPs an integral part of his successful business.

Stiffler, who has five DRPs, describes at least 90 percent of his work as dealing with the insurance companies in some sense. He states that they treat him fairly.

"They do a lot to make things easier as far as taking pictures and faxing estimates. Once you build a relationship with an insurance company, they'll want to look at something, but they don't want to hold you up. If you play fair with them, they'll play fair with you. If they're hard it's because some other shop has done something and they have a reason."

When there is a conflict, said Stiffler, instead of becoming antagonistic, "What we try to do is work with them. Say a quarter panel calls for a repair but needs to be replaced. We may call the company out to reinspect. We keep the car hooked up, and show what's happening with it. A lot of times they see that, and see we've made a conscientious effort to repair but it's not working. They'll take care of that. If we can't agree we'll bring in the car owner. We look at the owner as the customer; he or she's the one we have to please. We mediate between the customer and the insurance industry."

Said Stiffler, "We want to satisfy the customers. They're going to tell their friends and family ... The No. 1 thing we want to get across to the customer is we want to fix their car, on time, and the insurance company is right along with them."

Bill Mayer, assistant vice president of claims for GEICO Insurance, the sixth largest personal auto insurer in America, agrees. "We like to view them as partners," he says about the collision repair shops in GEICO's Guaranteed Repair Shop program. "We don't see them as our customer, and we don't see ourselves as theirs. We have a common customer, and we look to our partner to help that customer."

There are advantages, said Mayer, for the vehicle owner, the collision repair shop, and the insurance company in a DRP relationship. "The biggest advantage to the customer is in getting the car back faster, probably. Also, they get a properly repaired car ... Body shops aren't like the grocery store, where you go every week. It's kind of a resource you hope you never have to use. Many people don't know where to go, don't have friends or family who work there, and so will ask friends to recommend a place, or will ask us.

"For the shop, we look at it as a partnership. It's an advantage for the shop in that they get a volume of claims; it builds the shop's customer base. A customer agrees to go there, gets the car repaired properly, then when they get into an accident they go back, or they tell their friends.

"For us, we get a production gain, and another service option for the customer. It's another claim to be handled without having an additional staff person see it." Mayer explained that if an average staff member can handle 100 claims a month, and if GEICO can also refer 100 claims to a Guaranteed Repair Shop, particularly in a large metropolitan area, then that's one less staff person who must be hired.

In return for the benefit of increased volume, Mayer stated that after a shop qualifies for the Guaranteed Repair Shop program, it does have guidelines to follow. "We ask that they use aftermarket or used parts first, and if they're not available, then original equipment (OE); we only ask for Certified Automotive Parts Association (CAPA) parts. Part of my job is also a performance review of the staff; I review estimates written by our staff. When I'm in an area to review the staff I'll go to a Guaranteed Repair Shop and ask for an estimate, and review it as if a staff member did it. I treat our staff and our shops the same way." And, added Mayer, the rate GEICO agrees on with its Guaranteed Repair Shop is always the prevailing rate in that shop's area.

Stiffler said the insurance companies also have to make concessions for their DRPs. "Anything we had to do to qualify for the programs has made us a better business. The insurers have also had to sacrifice because they have to trust us when we tell them something. Maybe before they wouldn't buy what we were telling them, but now they trust us."

Mayer also added a possible explanation as to why some shop owners express negativity about insurers and DRPs. "It's possible that they have a negative attitude because they don't have a history of getting along with the insurers, and so aren't in the program. They see customers that could come to their shop go to another because of the program. They probably lose customers, as cars go from their shop to the program's shops. If I were a shop owner I probably wouldn't like it. If I were a shop owner I would want to be in a program."

As it becomes more valuable to hold a DRP and to cooperate with the insurers, it becomes harder to hold and express antagonism against insurers and remain as successful and respected as before. Said Stiffler, "You really can't afford to have enemies. You choose to do business with certain companies and you have to do business their way, like you'd like them to do business your way."

If there is a lesson in the spectrum of relationships between insurance companies and collision repairers, and the effects of the DRP, it is that in the end, the vehicle owner is still in charge. The money may be coming from the insurance company, and the collision repair shop may be doing the actual repair, but the vehicle belongs to its owner, and the end result is all up to him or her.

Customers can, and will, refuse to settle for a repair job they don't like. They can, and will, switch insurance companies and/or take their car do a different shop next time. Both collision repair shop owners and insurers realize this fact, and it is perhaps that, more than anything, that unites them.

Julie A. Finn is the assistant to the ASA Collision Division director. She can be reached at (800) 272-7467.

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