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Educating Our Customers

4/1/2008


I’ve read almost every article with great interest in BodyShop Business and other publications on the problems caused by insurance companies steering work.

My husband and I purchased a body shop about 10 years ago. My husband has been in this business for 47 years and my son has been in it for 20 years. We were like every other first-time owner in that we had to work hard to build up our customer base. Customers loved that we were a small, family-owned shop. We got on the State Farm DRP, but then it downsized, so to speak. Still, we did really well.

Our customers started saying that their insurance company was telling them that we weren’t qualified to work on their vehicles and they had to take them to one of their preferred shops instead. Some of these customers were up in age and were very scared that if they didn’t do what their insurers told them, their rates would go up. We tried to tell them that couldn’t happen based on what shop they chose, but fear took over and they were gone. In the past couple weeks, more and more customers have come back to us with the same kind of story. We retained them, but it took a lot of convincing that they wouldn’t lose their insurance because of what shop they chose.

Aside from educating our customers, we’ve called the insurance company at fault and also the insurance commissioner. I feel like a schoolgirl who runs to the teacher to tattle, but this is our bread and butter. We do a very good job on the repairs and we’ve had no customer complaints, but these insurance companies are scaring customers into going to their so-called “reliable” shops.

I have a copy of the letter that was sent out to the insurance companies about Minnesota Statute 72A.201 that prohibits an insurer from engaging in any act or practice of intimidation, coercion, threat, incentive or inducement for or against an insured to use a particular contractor or repair shop. It goes on to say that Minnesota law gives consumers the right to choose a repair shop to fix their vehicles, and that their policies will cover the reasonable costs of repairing their vehicles to pre-accident condition no matter where they have the repairs made.

Can I send out this flier to customers to make them aware of this law? As it currently stands, they have no clue what’s going on in this business. These rights are the rights of the customer who is paying for the insurance. It’s really hard for me to sit back and watch our business fail because the insurance companies get to see these people first. They’re not being fair to the repair shops or the insureds.

Response from BSB Editor Jason Stahl: Judy, I think your idea is a fine one. Consumer education is one of the keys in this battle. Consumers are generally clueless about the collision repair industry. On average, they get in an accident once every seven years. Generally, they just want to get their car fixed fast and move on without battling anybody. And they generally trust that their insurance companies are looking out for them.

Many body shops have made a similar decision to yours to embark on an aggressive consumer education campaign. One group of body shops in western New York printed bright yellow banners that read “It’s the Law!” and hung them outside each one of their shops. Customers would see them and, when they came in, ask what they meant. That’s one good idea. Other shops have reached out to the local media to tell their story. Some have pooled their money and bought radio and/or TV spots. It’s an uphill battle against insurers that have hundreds of millions to spend on advertising, but it’s one small, positive step.

The least you should do is make signs and hang them all over your reception area educating the consumer. It has to become a part of your daily business.

P.S. You shouldn’t at all feel like a tattling schoolgirl by reporting an insurance company to your department of insurance (although it may be ineffective because departments of insurance don’t get involved in what they deem “business disputes” between body shops and insurers. See more on that in last month’s issue of BodyShop Business [“DOIs: The Fox Guarding the Henhouse?” pg. 44]. You’re right – your shop is your livelihood, and you have every right to defend it from unfair business practices.

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