Although illegal, many collision repair shops believe that steering routinely happens across the collision industry. For this week’s Ask the Industry, we asked several collision repair shops about their perceptions of steering and how it has impacted their businesses.
Phil Mosley, general manager of Mercedes-Benz Collision Centers in West Chester, OH and Amelia, OH, said, "In my opinion, the steering issue is huge. I think it’s racketeering. A distinction needs to be made between steering and interfering. Consider the car owner, who calls in his or her claim and has no idea where to take the car to be fixed. Legitimately, the insurer might have a right to steer or direct that owner to a shop with which it has a relationship. On the other hand, if a car owner calls in his or her claim and has a choice of where he or she wants the car repaired, anything that the insurer says to persuade, encourage or intimidate the owner into having another shop do the work isn’t steering — it’s interference with a business relationship and should be prosecuted as such. This has gone way over the edge and has become akin to, in my opinion, criminal racketeering."
"Steering has had a huge impact on my company with regard to my non-DRP accounts,” Lee Amaradio Jr., president of Faith Quality Auto Body Inc. in Murrieta, CA, said. “When I discontinued my DRP relationships with three companies, they worked incredibly hard to steer my return customers away. My contingency plan was to spend more on advertising ($10,000 per month) to educate consumers on their rights and to get customers in my door. So when an insurer recommends another shop, not only are they taking a potential customer from me, they’re depleting my customer base and costing me dollars. The insurers are drastically trying to take control of our customers and they’re successful most of the time. I feel steering is a major issue that needs to be addressed. Even though we know the law and explain it to our customers, the insurers are still able to intimidate them into using one of their preferred shops."
Bob Winfrey, owner of All Precision Collision Repair in Marshville, NC, said, "Insurer steering has completely changed how I approach my business and my customers. Instead of selling my shop to the customers, I also have to warn them about what they’re in for next — how their insurance company is going to try and send them to the cheapest shop or one they have a sweet deal with.
"I don’t write estimates much anymore, I create signed work orders and then process claims. My customer drive-up count is 25 percent of what it used to be. Tow-ins are next to none. I had a customer tell me that the adjuster had his car towed out of his driveway and to the DRP shop, and he thought he had no rights in the matter. We have several anti-steering statutes on the books but no one to enforce them. It’s like a dog with no teeth.
"Business is down and we have ‘leaned out’ all we can to survive. Thank God we’ve been in business as long as we have and have a pretty steady flow of customers. We also do customizing, restorations, custom paint work and, of course, our regular collision repairs."
