Automotive Retailers Association says allegations of collision repair overbilling are unfounded
VANCOUVER, BC–(Marketwired – November 20, 2017) – The president of British Columbia’s aftermarket automotive association is speaking out against allegations that member collision shops are overbilling the Insurance Corporation of British Columbia.
Ken McCormack was reacting to suggestions by the union representing ICBC estimators that some collision repair shops accredited with the ICBC Express claim program have been overbilling the corporation. ICBC has said there is no evidence of overbilling the system that allows accredited repair shops to submit estimates directly by using the specialized Mitchell Collision Repair and Claims Management computer program.
“Overbilling doesn’t happen and really can’t happen with the province-wide estimating system that won’t allow an accredited shop to submit a repair estimate that doesn’t meet established criteria,” McCormack says.
Speaking about statements by the provincial government indicating ICBC has a $900 million deficit, McCormack says the suggestion of overbilling is an attempt to wrongly blame member collision shops for ICBC’s financial problems.
The cost of ICBC claims according to its most recent published financial report was $3.892.2 billion with collision repair costs averaging $584 million or 15 per cent of the total.
“Material damage is such a small percentage of ICBC’s expenditures when compared to bodily injury claims. As suppliers, we are already as lean as we can be and there simply aren’t any more areas where we can lower costs and remain viable. The open door to fraud is with the bodily injury component and the government should be looking in that direction,” he says.
ICBC uses the same Mitchell system of computer-generated estimates that private insurers use all over North America. The system employs numerous compliance checks and balances which can flag estimates for a more detailed analysis by ICBC. If the estimator is still not satisfied, they can call for a site visit to compare the estimate to the damaged vehicle.
On top of this, ICBC conducts audits on accredited shops using the Express collision repair program. “Express repair is a privilege shops earn if they meet ICBC performance standards. No shop would willingly risk that status which would limit or prevent them from doing ICBC work which is the majority of collision repairs in this province,” McCormack says.
He likens the program to having a NEXUS pass that streamlines border crossing. “There is a reason shops have this accreditation and it’s an earned privilege. ICBC auditors can walk into their shop at any time and they could lose their privileges. No business owner would ever risk that preferred standing.”
When asked to respond to allegations that industry is dictating rates to ICBC, McCormack says that he wishes the industry had more influence and the ability to directly impact rates. He points out that under federal competition law, ICBC insists that they must unilaterally sets rates with little or no input from the industry.
ICBC sets collision repair rates depending on shop type and level of accreditation and those rates are the same province-wide. Profitability in the industry is very low with an average 3.4 per cent profit on an average repair bill of $3,300.
“This isn’t much when you factor in equipment, wages, training and operating costs,” he says. “Implying shops are overbilling harms the reputation of many reputable companies, many of them family-owned businesses.”
Media availability: Monday November 20: 10:30 a.m.
Craftsman Collision, 810 West 1st St., North Vancouver
For more information www.ara.bc.ca
President and CEO
Automotive Retailers Association of BC
Peak Communicators Ltd.