Operations Committee 2001

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Operations Committee 2001

• Collision Industry Conference
• Las Vegas, NV
• November 2001

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Mission Statement
To provide information and tools from all
collision industry segments that facilitate
ideas, recommend solutions, and promote
cooperation, allowing the various segments to
more efficiently operate and improve their
businesses.
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Operations Committee Members

• Randy Profetta Toyota Motor Sales
• Roy Smalley Eurowerks, Inc.
• Margo Smith Storm Appraisal
• Bob Smith Storm Appraisal
• Randy Stabler Pride Collision

• Frank Terlep
• Barry Thomas Becca
• Thomas Wray ACTIF
• Robert Wright Burkeville Body Shop
• Roger Wright CARSTAR

• Bill Eveland Eveland Brothers
• Jerry Harn ProcessClaims
• Dan Klatt Glorified Bodies
• Bob Matejzel
• Alan Murdy Akzo Nobel
• Tony Passwater AEII

4
Operations Committee Co-Chairs

• Charles Baker Collision Repair Industry INSIGHT
• Tom Moreland Akzo Nobel

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Direct Repair Program Structure

• Allstate - Priority Repair Option
• 6,000 participants
• 37 of claims processed through program
• Farmers - Circle of Dependability
• 2,200 participants
• 40 of claims processed through program
• GEICO Guaranteed Repair Shop Program
• 1,200-1,300 participants
• 6 of claims processed through program

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Direct Repair Program Structure

• Nationwide Blue Ribbon Program
• 1,900 participants
• 31 of claims processed through program
• State Farm Service First and Select Service
• 18,000 participants
• 47 of claims processed through programs
• USAA S.T.A.R.S. Agreement
• 1,600 participants
• 45 of claims processed through program

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Direct Repair Program Training Requirements

• Allstate, Progressive, USAA
• CIC Class A required
• I-CAR certification or gold standards required
• ASE certification required
• Farmers
• CIC Class A required
• I-CAR certification or gold standards required
• ASE certification preferred
• GEICO, Nationwide, State Farm, Travelers
• CIC Class A required
• I-CAR certification or gold standards preferred
• ASE certification preferred

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Direct Repair Program Facility Requirements

• Allstate
• Required estimating system - CCC
• Required CSI program - AutoChex
• Required scheduling preference to insureds
• No minimal liability requirements
• Required equipment list
• Farmers, USAA
• No required estimating system
• No required CSI program
• Required scheduling preference to insureds
• Minimal liability requirements - 1 million
• Required equipment list

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Direct Repair Program Facility Requirements

• GEICO
• No required estimating system
• No required CSI program
• Required scheduling preference to insureds
• No minimal liability requirements
• No required equipment list
• Nationwide
• No required estimating system
• No required CSI program
• Required scheduling preference to insureds
• Minimal liability requirements - 2 million
• Required equipment list

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Direct Repair Program Facility Requirements

• Progressive
• No required estimating system
• No required CSI program
• Required scheduling preference to insureds
• No minimal liability requirements
• Required equipment list
• State Farm
• No required estimating system
• Required CSI program shop choice
• Required scheduling preference to insureds
• No minimal liability requirements
• Required equipment list

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Direct Repair Program Facility Requirements

• Travelers
• Required estimating system ADP or CCC
• Required CSI program
• Required scheduling preference to insureds
• No minimal liability requirements
• Required equipment list

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Direct Repair Program Repair Process Requirements

• Allstate
• Required parts discount
• Required use of new non-OE parts
• No materials caps/thresholds
• Required minimum warranty 2 years
• Farmers
• No required discounts
• Required use of new non-OE parts
• No materials caps/thresholds
• Required minimum warranty - lifetime

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Direct Repair Program Repair Process Requirements

• GEICO
• No required discounts
• Required use of new non-OE parts
• Required materials caps/thresholds
• Required minimum warranty lifetime
• Nationwide, Travelers
• No required discounts
• Required use of new non-OE parts
• Not on current year models
• Required materials caps/thresholds
• Required minimum warranty - lifetime

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Direct Repair Program Repair Process Requirements

• Progressive
• No required discounts
• No required use of new non-OE parts
• No required materials caps/thresholds
• Required minimum warranty lifetime
• State Farm
• No required discounts
• Required use of new non-OE parts
• CAPA certified
• No required materials caps/thresholds
• Required minimum warranty - lifetime

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Direct Repair Program Repair Process Requirements

• USAA
• Required discounts in certain markets
• Required use of new non-OE parts
• No required materials caps/thresholds
• Required minimum warranty - lifetime

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Issues/Quotes

• Parts Usage
• Salvage parts utilized when applicable, and
  permitted by law, at 25-30 over repair facility
  cost.
• Think repair first! If not repairable consider
  LKQ, used, reconditioned, and Aftermarket. OEM is
  last choice.
• Salvage, reconditioned, and aftermarket parts are
  not to be considered when appraising current
  model year and one prior model year with less
  than 15,000 miles.

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Issues/Quotes

• Record Keeping
• Each repair facility will maintain a related
  paper file for all repair work performed under
  this agreement.
• All pertinent information regarding the vehicle
• Work orders
• Photographs taken
• Invoices for parts delivered
• Insurers initial estimate
• All written supplements
• Parts ordering information/documentation
• Authorizations, disclosures, and disclaimers

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Issues/Quotes

• Materials
• Paint and materials will be based on x number
  of dollars per hour at a maximum of 300.
• Refinish threshold for paint supplies set at 350
  for two stage, and 400 for three stage.
• Maximum limit for paint supplies is allowed.

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Issues/Quotes

• Estimates
• Insurer will write all estimates in accordance
  with policy contract provisions and insurer will
  write all supplemental estimates.
• The shop can begin repairs immediately upon
  appraisal and shops completion of damage report,
  provided the owner has received a copy of the
  appraisal and shop has authorization from the
  vehicle owner.

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Issues/Quotes

• Stipulations
• Work will not be postponed or given
  non-preferential status in comparison with other
  repair work performed by Provider.
• Provider agrees that unexpected delays in repairs
  will be promptly reported to vehicle owner and to
  insurer.
• The repair facility and insurer will warranty
  repair work for as long as insured owns the
  vehicle.
• The repair facility guarantee will be primary,
  and they will help the vehicle owner resolve all
  applicable warranty claims.

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Issues/Quotes

• Stipulations
• Insurer will receive automated appraisal data
  that will allow staff to manage the process and
  monitor trends that ultimately impact payout.
• Insurer will also reduce total claim costs.
• One critical success factor to implement a
  successful direct repair network is to leverage
  volume commitments in return for discounts, where
  appropriate.

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Next Steps

• Turn information over to the CIC Insurance
  Committee.
• Work with insurance committee to achieve a
  rationalization between insurers practices as
  they relate to Direct Repair Programs.