Late last year, the Society of Collision Repair Specialists (SCRS) wrote to seven major paint manufacturers and asked for each company’s recommended procedure for applying clearcoat to qualify for a lifetime refinish warranty. Specifically, SCRS wanted to know if there is an acceptable procedure to tape, melt or blend clearcoat mid-panel rather than extending it to the natural breaking point.
All of the paint companies responded in writing that you must extend clear to the natural breaking point in order to qualify for the lifetime refinish warranty. You can read all of their responses on the SCRS website by visiting ABRN.com/SCRSpaint. Then look for the link to “2014 Clearcoat Response” for each paint manufacturer).
“Applying clearcoat to the entire panel is a requirement for coverage under the Axalta Coating Systems warranty for collision repair finishes,” that company’s response to SCRS states. “This approach helps produce a durable repair that will not weather prematurely.”
“(F)or PPG Lifetime Limited Paint Performance Guarantee purposes, the clearcoat application must extend to the nearest panel edge or break point,” that company stated.
That means if you put a quarter panel on and there’s a roof molding along the roof rail, you have to extend clear all the way to the natural breaking point, all the way down to the A-pillar. Or if you put a quarter panel in, you may have to clear the rocker panel all the way forward if there’s not another natural breaking point. And if there’s not a roof molding, for example, you have to do an “up and over,” clearcoating the roof and the other quarter panel.
The paint manufacturers are not alone on this. Some auto manufacturers have issued position statements that concur.
“Ford Motor Company does not condone or recommend the procedure of clearcoat blending,” the company’s document states in part. “The preferred process – and the one Ford approves – is to blend the basecoat color as necessary and then clearcoat the entire panel.”
Toyota and Volvo have similar published statements; other automakers do not address the issue directly but do state that the paint manufacturer procedures – which include the statements saying that not extending the clear to natural breaking point is not a warranted repairer – should always be followed when repairing their vehicles.
Yet I still hear from shops, “Mike, the insurance companies won’t pay me for it.” Insurers, are you trying to tell me you know something the paint companies don’t? Are you saying you know something the automakers don’t?
It’s time to stop this nonsense.
As with other topics like this, three questions will help you demonstrate to an insurer that the process needs to be done and is therefore something for which shops should be compensated.
Question 1: Is it required to fully and properly repair the vehicle? Go to the website above and get copies of your paint company’s statement showing what is required if the insurer and customer expect a lifetime refinish warranty.
Question 2: Is it included in any other labor operation? A quick review of your estimating system guide will tell you that it is not. The Mitchell International procedure pages, for example, state that, “It may be required to extend the application of clear to the nearest panel edge or breakpoint. The performance of this operation is NOT INCLUDED in the Mitchell refinish labor time.”
Question 3: Do the estimating system providers provide a pre-determined time or calculation method for this procedure? Here the answer varies. If a time or formula isn’t provided, I suggest you submit an inquiry at the Database Enhancement Gateway website (DEGweb.org).
And remember when you do clear the aperture all the way forward, are you charging to remove and reinstall the door weather strips at the top of the roof rail so you don’t get a hardline? Are you charging to remove and reinstall the windshield molding or to precision mask the front windshield to prevent overspray?
Shops, insurers and customers all want lifetime refinish warranties, and the paint companies have been very specific about the need to extend clearcoat to the natural breakline in order to achieve a warrantable paint job. It’s time for insurers to stop asking shops to do anything less.
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Today’s cars and car parts are made not just in one place, but many. Toyotas hail from Mississippi, Volkswagens are assembled in America, and Chryslers aren’t just made in Detroit any more. But replacement parts for all these car types and makes come mainly from China. (FAQ: What kind of parts are used to repair my car?)
When a car needs structural repair, parts for a GM, Chrysler, VW, or even a BMW are sourced from factories that have never produced, or likely ever even seen, the whole vehicle.
Replacement body parts often don’t come from the manufacturer that produced the originals used in the fabrication of the car, but very likely will come from a factory that produces only parts for the aftermarket network of buyers and distributors.
That’s because there is a flourishing market in parts manufactured all over the globe, but mainly in China, that represents a billion dollars plus in imports to the U.S. market.
Crawford’s Auto Center has filed a class action suit against State Farm, Allstate, GEICO, Progressive, Farmers Insurance, Liberty Mutual and Nationwide insurance companies for allegedly violating the Racketeer Influenced and Corrupt Organizations Act (RICO) by dictating unfair compensation for collision repairs.
The Downington, Pa. shop’s suit alleges that because the defendants collectively hold 70 percent of the national auto insurance market, they are pivotal in establishing the prevailing rate for repairs. However, they have used “fraud, deception and artificial restraint” to drive down the compensation rates paid to their non-DRP shops for labor, paint, parts and materials.
The alleged insurance company tactics include pressuring direct-repair program shops to suppress rates, utilizing most-favored nation clauses, which ensure insurance companies are given the best rate afforded any other customer, and discussing rates among themselves to create an artificial market rate for compensation.
The independent information providers — CCC, Mitchell and Audatex — are deemed co-conspirators, according to the complaint, for their role in establishing the scope and extend of repair procedures necessary to restore vehicles to pre-loss condition.
“The information providers are simply not the independent authority of repair standards and costs. [They] furnish Defendant insurers with the framework and tools to accomplish their goal to suppress compensation to repair facilities,” the complaint states. The information providers are significantly influenced by insurers, as they earn the majority of their revenue from insurers or their direct-repair program network facilities, the suit says.
The current condition of the market is forcing shops to make a choice, the complaint alleges: “Sell their repair services into a rigged market at suppressed rates or do not sell at all — and go out of business.”
The plaintiffs are seeking compensatory and punitive damages, attorneys’ fees, suit costs and all other appropriate relief.
May 14, 2014—Crawford’s Auto Center Inc. in Downington, Pa., has filed a lawsuit against seven major insurance carriers and their affiliates, accusing them of short pays and conspiring to establish and enforce “an artificial market value for collision repairs,” according to the complaint.
The suit was filed in an Illinois district court on April 30, and names State Farm, Allstate, GEICO, Progressive, Farmers, Liberty Mutual and Nationwide as the lead defendants, along with a slew of their respective subsidiaries.
Attorney Steven L. Bloch of Berger & Montague P.C., representing Crawford’s Auto Center, told FenderBender that the suit was filed in Illinois for strategic purposes, as “several of the defendants are based in Illinois and conduct a great deal of their business either in Illinois or emanating from Illinois.”
“I think [the suit] speaks for itself,” Bloch said Wednesday when reached by phone. It stems from “the artificial establishment and perpetuation of a so-called prevailing rate, which is used to suppress compensation to collision repair facilities.”
Filing under the Racketeer Influenced and Corrupt Organizations Act (RICO), the suit accuses the defendant insurers of “long-running unlawful conduct to suppress compensation” to shops.
The suit goes on to say that the insurers have worked to implement a “prevailing rate” for collision repair compensation that is lower than that of market value, aided by industry information providers that the suit labels as “conspirators.”
This is the latest in a recent string of lawsuits filed on behalf of the collision repair industry against insurers.
The Mississippi Collision Repair Association, along with a number of its affiliated body shops, filed last summer to block State Farm’s PartsTrader electronic parts procurement mandate for its Select Service shops; a Tennessee shop accused Progressive of steering and underpament in November; and an Ohio MSO alleged short pays from State Farm in another suit in March.
There is also a suit pending from industry advocate and shop owner Ray Gunder to block the State Farm PartsTrader initiative in Florida, and a suit recently filed on behalf of a number of Indiana shops.
June 5, 2014—The Rhode Island Senate Committee on Judiciary will hear a series of controversial bills impacting the auto body and insurance industries Thursday.
Rhode Island newspaper, The Valley Breeze, reported Tuesday that there are four bills that will be heard:
- One prohibiting insurance carriers from requiring the use of used or remanufactured airbags and/or suspension parts
- One creating two separate license classifications and labor rate surveys for shops facilities, allowing for differing pay for different shops
- One not allowing insurers to increase rates without a hearing
- And one amending the definition of “aftermarket part” to mean all motor vehicle replacement parts.
The Auto Body Association of Rhode Island supports the legislation, The Valley Breeze reported.
The Property Casualty Insurers Association has released statements over the past several months opposing all four pieces of legislation and released a 6-page report that outlines various ways the auto body industy has seen increased costs due to legislation, including laws backed by ABARI in the past.