Auto body industry makes final push for fair reimbursement bill

  • Mike Knox, an employee at Full Tilt Auto Body and Collision, works on a car at the shop in Hatfield. GAZETTE FILE PHOTO

For the Gazette
Published: 3/27/2022 10:12:49 AM
Modified: 3/27/2022 10:11:53 AM

BOSTON – Members of the auto body repair industry highlighted the consequences of low reimbursement rates set by insurers and urged lawmakers at a recent hearing to report favorably on the bill that intends to fix the issue. 

“It kind of surprises me that the labor rate is so out of whack,” said Rep. James Hawkins, D-Attleboro, who is also the sponsor of the bill. “This is a very technical field, and if we pay just $40 an hour, considering the overhead costs that have just ballooned recently, that leaves very little room for these shops to pay minimum wage to their workers who are doing very technical work. It just doesn’t make for a good trade.”

Auto body shops have been advocating for an increase in the rate at which they are reimbursed by insurance companies, a rate which has been stagnant for decades while the cost of doing business has surged exponentially. 

“Thirty-five years ago, I was at the doorstep of the State House with my father. I was 12 at the time. We were looking to increase the labor rate at that time,” said Elias Akiki, president of the Akiki Auto Group, based in Hyde Park. “Thirty-five years later, here we are, still looking to increase what we are paid.”

Shop owners, technical instructors, and auto body industry organizations testified before the Special Commission on Auto Body Labor Rates about their experiences with insurance companies that they said manipulate the market and underpay shops.

Owners voiced their frustration at the fact that in a sector where vehicles have become more technologically advanced and require more sophisticated work, labor rates make it is impossible to function.

Add in the high cost of living in Massachusetts and owners are struggling to make ends meet. 

“Large organizations in the other areas of the country are going through similar challenges, and they have been routinely seeing an increase in rates, and are even demanding for more,” said Aaron Schulenburg, executive director at the Society of Collision Repair Specialists, which represents auto body shops across the country. “Now think about how that extrapolates to businesses in Massachusetts, who have not seen any increases in decades.”

Schulenburg also rejected insurance company suggestions that there are more shops than work in Massachusetts.

“The current trends we are seeing do not indicate that. We have seen an increase in the number of vehicles registered in Massachusetts, and we have seen an increase in the length of repair,” he said. 

And even if what companies are claiming was the case, a rate increase would still be needed.

“The rising costs in the past few decades are an indicator that the rates must be adjusted to keep up. In the same way that the insurance carriers have adjusted their premiums with the rising cost of doing business,” said Schulenburg. 

The special commission, upon the request of business owners, plans an in-person meeting soon at a vocational school, to speak with enrolled trainees looking to get into the trade. 

With the testimony completed, the commission will issue a report before the June 30 deadline. 

Aryan Rai writes for the Gazette from the Boston University Statehouse Program. 

 


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