Maryland Legislation

EXPLANATION FOR THE NEED OF MARYLAND HOUSE BILL 1084

From: Aaron Schulenburg

WMABA Treasurer

Bill Denny’s Body Repair

Havre De Grace, Maryland

We find ourselves at a crossroads in our industry, where the future financial viability of the Collision Repair Trade is in serious question.

Over the past several years, the professionals that own collision repair businesses have been faced with consistent increases in operating costs and employee overhead. From the increase in paint and materials costs, gas costs, and the natural succession of cost of living, the means in which the collision industry is reimbursed for the services it renders have remained stagnant and far from keeping economic pace to the requirements.

As seen in the industry at large, Maryland businesses have experienced a rise in the average age of the technician, due to a younger generation’s lack of interest in pursuing our trade. The reality is that younger technically-capable individuals with the aptitude required to repair today’s vehicles can easily pursue a technical career in any industry, from fixing copy machines to HVAC, with a future that ensures a far greater financial return for their training and time invested.

We have also often seen the consumer placed in a position to become financially responsible for the obligatory requirements of the cost of repair. While insurers will argue, and accurately so, that they do not dictate, establish, or control the pricing of collision repair labor and materials, they do in fact control the rate in which the consumer is reimbursed.

Often it is through the collection of skewed data that supposedly represents a snapshot of the prevailing market rate; including collection of field representative opinion or factoring of rates that are suppressed through contractual agreements, differing from the actual repair facility door rate, in return for the promise of repair volume to an individual location. These activities alter the accurate reflection of a true market area rate and impact collision repair business owners, employees and most significantly, the consumers that elect to have their vehicles repaired at many facilities of their choice.

Often the consumer is penalized for electing to have their vehicle repaired fairly and properly by quality repairers and notified that the shop charges above and beyond the insurer-established or identified market rate. This does not promote competition and does not hold the responsible party accountable to their obligation to indemnify for accurate and fair repairs.

Collision repair is a needed and valuable trade in our country and in our state of Maryland. When recognized publications such as Forbes rate our industry in the top 10 riskiest businesses to operate due to “razor-thin margins” that result from “Insurance companies paying the bills, and they don't like to pay much,” it restricts the ability for the industry to grow and captivate a new generation of employees. When financial margins disappear from our independent businesses the employees suffer through a loss of benefits and employment security. When a business or industry faces economic hardships, safety and equipment upgrades are some of the first items dismissed, again affecting the employees within the state.

Legislation allowing our states’ independent businesses the ability to establish the accurate prevailing cost of service, and allow for that cost of service to keep pace with the requirements of the trade, allows for the industry to survive like any other whose consumers are not reliant upon reimbursement from a third party.

It is of the opinion of both the Washington Metropolitan Auto Body Association and myself that legislation such as HB1084 allows our industry the opportunity necessary to amend our situation and move forward.

As collision repairers in Maryland and as leaders of our industry, we ask for your vocal support of this bill.

Any repairer can inform their delegate or state representative of issues that are of significance to support.

Anyone can help make a difference.

Thank you in advance for doing your part and offering your support.

     --Aaron Schulenburg