Sponsors 
Welcome to your CRA Member Newsletter for February 4, 2008.
We deliver industry news straight to your mailbox.
In this issue...
CRA Tackles Insurer Steering Practices
Left to Right: CRA board members Roy Carnevale, Byron Orris; CRA lobbyist Richad Steffen; Senator Pat Wiggins; CRA board president Gene Crozat;CRA director Allen Wood and seated, CRA board member Lee Amaradio.
At CRA’s request Senator Pat Wiggins (D-Santa Rosa) says she will introduce tough, new provisions to California’s anti-steering law. CRA executive director Allen Wood said the bill is needed to counter the Department of Insurance’s lack of enforcement of the current anti-steering statutes. “We are grateful to Senator Wiggins’ s willingness to help our industry fight the unfair and illegal practices of insurers. This bill, sponsored by the CRA, is aimed at insurers as well as the Department of Insurance which is charged with enforcing laws to protect an open-marketplace.”
Her legislation, proposed to be introduced within a few days, seeks to add the following new provision to Section 758 of the Insurance Code:
“(b) When a policyholder first reports vehicle damage to an insurer, the insurer shall determine if the policyholder has selected an auto repair facility prior to providing any information regarding a program or a facility that performs auto body repairs. If it is determined that the policyholder has selected a repair facility, the representative of the insurer shall cease, and not engage in, any discussions regarding a program or a facility that performs auto body repairs. ”
CRA lobbyist Richard Steffen added, “We want public debate about the harm caused by insurer steering. I’d like insurers to explain to legislators and regulators why consistently steering claimants away from a specific shop is not restraint of trade. ”
The CRA requests members to send steering complaints to Richard Steffen, 3174 16th Street, Sacramento, CA, 95818. He will hand deliver the complaints to the counsel for the Insurance Commissioner each Friday. Additionally, he will retain copies to distribute to legislators who will be voting on the CRA’s anti-steering measure.
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URGENT! Click Here to Sign Up for CRA’s All Import Legislative Conference: April 1 and 2 in Sacramento!
No Voice is Stronger than the CRA’s. Reserve Your Room Today!!!
The CRA’s headquarter hotel is the Embassy Suites, 100 Capitol Mall, Sacramento, Ca 95814; Phone 916-326-5000; Fax 916-442-0719. The CRA Room rate is $169.00 and includes free shuttle service to the airport, breakfast and a reception on April 1, 5:30-7:30 p.m. Make your reservation for Tuesday, April 1 by calling 1-800-EMBASSY; or 916-326-5000. Deadline is March 11 to obtain the CRA Rate. Indicate that you are with the Collision Repair Association of California.
The CRA is sponsoring two critically important bills this year. We need all members in the State Capitol on April 2nd to tell legislators how insurer steering and insurer repair mandates are bad for consumers and the open marketplace. This is it! Either walk the halls of government, or stay home and let others make decisions for you.
Agenda:
Tuesday, April 1: Working Meeting at the Embassy Suites 10 a.m. to 5 p.m. Discussion of business practices, guest speakers and briefing on legislative and regulatory issues. There will be a working lunch (about $25 per person) at Noon and a Reception starting at 5:30 p.m.
Wednesday, April 2: CRA members will meet with state legislators at the State Capitol. CRA will schedule the meeting times. The following State Senators have already agreed to meet with CRA members: Senator Dave Cox (Sacramento,Roseville); Senator Lou Correa (Orange County); Senator Dennis Hollingsworth (Temecula, El Cajon); Senator George Runner (Antelope Valley, Santa Clarita); Senator Carole Migden (San Francisco and Marin counties);and Senator Pat Wiggins (Sonoma and Napa counties). About a dozen other legislators will be added to this list. This is your chance to talk directly with key members of committees that decide policy affecting your business.
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SB 1059 Shakes Up Sacramento Special Interests
Lobbyists for insurers and aftermarket parts manufacturers are trying to understand the ramifications of the CRA’s sponsored SB 1059 which simply says insurers cannot require a repairer to use aftermarket parts in the repair of a vehicle under factory warranty. The bill allows use of aftermarket parts if the repairer agrees to use them. While insurers don’t like the bill, they have to be careful in their opposition. “We want to make the customer whole” is the common refrain from insurers. Voiding warranties with the use of aftermarket parts is not a consumer-friendly action. Hey, how about letting the licensed repairer make the call? The CRA thanks Senator Carole Migden (D-San Francisco) for authoring legislation to protect consumers and repairers alike. The bill reinforces the fact that the contract to repair a damaged vehicle is between the vehicle owner and a licensed automotive repair dealer, not an insurer. CRA lobbyist Richard Steffen said the bill will be amended to exempt glass from its mandates while setting a limit on the warranty time in which the mandates will apply (five years is suggested). He said he expects significant negotiations to begin on the bill in about two weeks. He also indicated there might be “surprise amendments” offered from an important source.
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CRA Member Joe Hinkens, Mainline Autobody, Santa Maria, Fights for the Spirit of SB 1059 and Asks Other CRA Members to Join Him!
Insurer lobbyists were stunned when told by CRA that aftermarket parts have a high return rate due to poor quality, misapplication and damage. Repairer Joe Hinkens of Mainline Autobody, Santa Maria, and the CRA board are challenging members to send their data on aftermarket part returns to Allen Wood, CRA executive director, who will compile the results in data to support SB 1059. Please email Allen:
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
. Here is Joe’s report:
Aftermarket Parts Usage
To: Aftermarket Vendors and Insurance Representatives
From: Joseph Hinkens
We are very committed to maintaining high levels of customer satisfaction. Delivering the vehicle in a timely manner is a big part of achieving this objective. The benefits of a satisfied customer translate to repeat business, renewed policies, reduced claims costs, reduced administration, and a smoother claims & repair process.
The use of aftermarket parts in our area poses some unique challenges from a geographic standpoint. Yet the most significant hurdle we are faced with is the huge ratio of rejected parts. These rejects range from poor fit, incorrect application, to damaged parts, just to name a few. Below, I’ve illustrated the data collected in our shop for our most recent one-month billing cycle.
1. LKQ Corporation 22 Invoices 15 Returns 68% Failure Rate
2. Alpha Distributors 14 Invoices 8 Returns 57% Failure Rate
3. Dynacorn 25 Invoices 12 Returns 48% Failure Rate
The average for these three examples is a whopping 57% failure rate. These deficiencies result in costly production delays, decreased cycle time, added administration costs, and most importantly, reduced customer satisfaction. Because we are graded on all of these areas by our insurance partners, I think it’s important to share this information.
In anticipation of the “Well you’re the only one….” response, I counter with the obvious rationale, that we’re the only one that has taken the time and effort to collect and share the data.
I’d like to suggest that our insurance partners strategize with us soon in an effort to correct this situation. Not only does our shop performance suffer under these circumstances, but we both share the certainty of dissatisfied policy holders and customers alike.
I welcome your reply.
Joseph Hinkens
Mainline Autobody
1104 West Betteravia Road
Santa Maria, CA 93455
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