My average billing cost for winshields has decreased by $18.13 but all my expenses have gone up in 2006!

Seems to me you have to choose one (or more) of the following:
a) Raise your prices; or...
b) Charge for other services (i.e. mobile install, shop supplies, glass disposal, etc); or...
c) Reduce operating expenses; or...
d) Live with making less money

I, for one, am not a big fan of "d" and would encourage everone to strongly consider "a" and "b"... especially if you've tightened your belt and there no where else to cut!!

I should have finished the statement. We are getting more money from every catagory except the insurance and networks.

I not complaining just wondering when the insurance companies will start paying a "fair and reasonable" rate?

ANSWER: when enough shops demand it!

You are soooo right xxx!!!

So what are we waiting for?

How would you define a 'Fair and Reasonable' Rate?
Please be specific.

Would your 'fair and reasonable' be the same in your location? Sleepy Eye, MN? and Metro New York?

Body Shops use a system where they all charge list for the parts and add published labor time at local prevailing labor rates. This seems to work for them.

Wouldn't this system be a good start?

Hal,

You've used the body shops as an example of "works for them" before.

It does NOT work for them, it has NOT worked for them for 30 years. The network shops that benefitted from steering were the only ones that ever said it "worked for them" and now even THEY are screaming now that many of them are being dropped from programs. They feel that the rates are depressed and artificially manipulated JUST as much as the glass industry does. And then there's the freebies, free storage, free towing, free rentals, free procedures, free detail, free pickup and delivery, and this is just to name a FEW. All this working on a labor rate that, accounting for inflation, hasn't gone up since the early 80s, and in fact, accounting for inflation, has gone down. OH, and BTW, the majority of insurers expect discounts from OEM list too. Most push the AM parts while shoving the liability for those AM parts on to the repairer.

Either you're being naive, or you're treating us as such.

And one other thing, the readers here don't NEED to figure out what fair pricing is everywhere in the country, the OPEN MARKET does that. Individual owners need only figure out what a fair price is in their OWN market. Funny how anti-trust laws support that theory too.

Sorry, but I cannot agree. I managed our 28 State Direct Repair Auto Program for a number of years and I know your comments are not completely accurate.

We [the insurer]have standards for participating shops. However, we do not ask for discounts, we do not ask for free rentals, we do not ask for free towing, etc. [We do ask the give us 3 days to remove totals before charging us storage.]

The Body Shop model I see has worked and does work.
The Glass Shop model is the one needing help.

Each and every one of you who do not agree that the reimbursement for insurance work is fair and reasonable should NOT sign the O&A. Once a vast majority the retailers show insurance companies that their terms are unacceptable by refusing to agree, they will be forced to make a change. I've said it here before and I'll say it again. Instead of telling them, show them. Your actions will speak loader than your words. If you do not agree with the offer, then don’t sign the O&A -Doing so negates your right to complain.

HAL,
Would you(as an insurance company) be willing to accept pricing on glass that was not based on NAGS? NAGS no longer represents a reliable base to price glass off of. It has no relation to either the cost of the glass from my distributors or the Original Equipment List Price.
I do not price any glass off of NAGS except for insurance companies that require it.

Before I go into my ideas of ways to improve, tell me what you think needs to be done as you view it from the insurance side.

Hal,

In addition. When you stated:
"Body Shops use a system where they all charge list for the parts and add published labor time at local prevailing labor rates. This seems to work for them.
"
What is list? Is that the Origiinal Equip list price? IF it is then do they get paid that price even if they use aftermarket parts? If they use aftermarket parts where does that list price come from?

Hal,

Respectfully, you need to get out of your office once in a while. You see the world from your desk, not from the repair shop, but then that's not really your job, is it? You see the world from your compliance and cost saving reports.

How can you say you that you have "Standards" for participating shops, then follow that up with the statement that you "don't ASK" for anything? What the heck are the STANDARDS for??????

I suppose it would be accurate to say that insurers don't ASK for any discounts from glass shops either, right? I would agree, no one is ASKING us for anything, they're TELLING us this is the way it is, and it's a take it or leave it option. I've NEVER been ASKED what a fair and reasonable price was in my area, yet, as a professional, I'm the one most qualified to answer the question.

If this "tell don't ask" issue wasn't true, why do you short pay bills that don't meet your 'standard'??? Without investigating a darn thing as to what was used in the repair of the customer's car. Elaborate on the question of how you pay shops re: OEM or AM parts in your collision program. How many of these AM parts do you require as a goal for the shops to use?

I realize that you are speaking of your program(s) unique to STate Auto, and perhaps I have generalized a bit too much in referencing YOUR programs, but don't tell me what I said wasn't completely accurate past that.

Spend some time with collision folks, and see what they have to say, and listen past the parameters of your own program.

Oh, and while you're doing any research, check out those big consolidators in collision that have signed any and every DRP agreement out there....how many is it now that have gone bankrupt? How many are on the rocks? Some that are having troubles making ends meet may be on the west coast out of your area, but that does not negate my point.

And finally, once again, where is the contract of repair between you, the insurance company, and our repair company for repair of the insured consumers car that you are applying your standards to? If there isn't one, why are "WE" having this discussion?

Hal,
I don’t think that "fair and reasonable would be that same for Sleepy Eye as it would be for NYC.

That's my point; I have the misfortune of living and working in the northeast. The northeast CPI has risen at a pace of almost five percent for the last few years. All our shops are "A" pricing territories and we have seen little to no increase for glass and no compensation for fuel. I cannot understand how tier pricing especially the “A” tier is based solely on population?

I was talking to a person who just moved here form Dallas. They were explaining to me that he is trying to sell his 8 year old, 3500 square foot gated community home for $250,000 and had no buyers. It struck me as funny because here that same home will go for $650,000 to 1,000,000. Correct me if I am wrong but we receive the same "A" tier discount because we have equal population?

Hal that to me is not fair and reasonable pricing. I feel we our price increases or decreases should be tied to the specific regions CPI and it should be moved up or down bi annually. I think that would a lot more reasonable (and possible legal) then the current TPA’s unknown way establishing pricing. Don't you think that would be fair and reasonable Hal?

Hal, When I say pricing I am speaking of labor rates too.

ST,

I agree that we should make a statement but not a boycott.
I have no problem doing business with insurance companies or TPA's I just think we should be able to pass on things like increase labor, fuel and insurance increases like any other industries do.

We don't boycott LOF or PPG when they implement fuel charges but we should not let PPG (I mean LYNX) disallow us the same privileges. I think an understanding letter sent to the insurance companies/ TPA’s and cc'd to glassbytes may be more affective then an all out boycott. But one letter would not be affective they would need to recieve a lot of them.

As for a boycott there is no way that most companies would walk away from that segment of the market. Nor should we, we just need to bridge the "fair and reasonable" gap.

SB: I think you may have missed my point. I am NOT suggesting a boycott. In fact I'll say it again -I am NOT suggesting a boycott. What I am saying is that if a person does not agree with the terms of a deal, then that person should not sign an Agreement stating that they do accept those terms and then complain about it later. I personally do not think that the insurance companies are not listening to the complaints by the glass shops when a vast majority are accpting the terms by signing O&A's. Their job is to maximize profitability and in doing so they take care of their investors. Part of the process is taking care of their customers. This is just like the rest of us. What I am suggesting is the concept that if the insurance companies started to see that a large percentage of the glass shops are refusing their business because they can not accept the terms being offered, they might change their offer.

Let me put it this way: If you (anyone) can not accept the price you are being told you have to pay for a product or a service, you go somewhere else, right? What if you do not want to go somewhere else or there is no other place to go. I would guess that you either accept the price and pay it, or you go without.

Hal,
I think local prevailing labor rates would be a good start. Will they be dealer service rates, Auto Body rates what do you suggest? Can you tell LYNX and SGC to start as of September 1?

the body shops use mitchell books, and their time for glass is different from nags, but isn't mitchell and nags owned by the same corp? how come the labor times don't match? could it be they DON'T KNOW WHAT THEIR DOING!!!!!

Hal,
I was hoping for a response to your question? What are your thoughts about tying labor and glass discounts to the regions CPI?

mojo,
The way I understand the difference in labor times between mitchell and NAGS is that mitchell seperates each item where as NAGS is all inclusive.

Example: I had to show my body shop accounts that they needed to be charging for panel removal, installation, broken glass cleanup , etc. It is not all included like NAGS.
NAGS times include cleanup of broken glass, removal of door panels, etc.