Bodybuilders continue to protest against labor rates

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BOSTON – Representatives and Senators at Joint Committee on Financial Services got a preview on Wednesday of the debate over labor rates paid by insurers to auto body repair shops which is expected to take place ahead of a new special commission by the end of this year.

The problem persists Beacon Hill for more than a decade, and a previous special commission conducted its own in-depth study of the matter in 2008. Nonetheless, owners of auto body repair shops told lawmakers on Wednesday that they were being reimbursed by insurers at a rate. average of about 40 $ per hour – which they say is the lowest in the country – and pushed for legislation regulating minimum labor rates.

“In 2010, when I opened my business, insurers reimbursed consumers a labor rate of 40 $ one o’clock. Eleven years later, the same insurers reimburse consumers the same labor rate of 40 $ one o’clock,” Brian bernard, owner of Total Care Accident Repair at Raynham, told the committee. “Eleven years with a zero percent increase in that rate. Over the same period, your insurance premiums have increased 48 percent.”

Bernard, the Massachusetts Alliance of Automotive Service Providers and others have backed a handful of bills dealing with auto body labor rates, including Rep. H 1111. James hawkins which would require insurers to reimburse bodybuilders at a minimum rate equal to the rate in effect when the Insurance Reform Act was passed in 1988, adjusted for inflation. Thereafter, the rate would be adjusted according to the consumer price index.

According to US Bureau of Labor Statistics, $ 1 in 1988 is equal to $ 2.36 purchasing power in 2021.

Hawkins said he ran a body shop before he became a teacher and was “very involved” as a member of the Rhode Island Auto Body Shop Association. Back then, which he said about 25 years ago, the labor rates that insurance companies paid to stores were about the same as they are today.

“I just had my truck serviced at the Chevrolet dealership, it is $ 125 an hour for work. I dropped off my motorhome for maintenance this week and it’s $ 175 one o’clock. And we only pay the bodybuilders 40 $ an hour, “he said.” And it’s not what the employees get, it’s what the store gets. “

Several people testifying also told lawmakers that the low rates make it difficult to recruit young technicians in the field.

Christophe stark, executive director of the Massachusetts Insurance Federation, said the problem is a supply and demand issue, arguing that as the need for auto repairs has declined, the number of stores has mostly remained stable.

“Basically it’s an excess of repair shops and fewer physical damage claims,” he said, adding, “In 2003, there were 606,000 physical damage claims. . In 2019, there were only 472,647. That was a decrease of over 22%. the number of physical damage claims as cars became safer. In 2000, there were 797 registered repair shops in the Commonwealth. Today, there are 698. That’s only a drop of 5.5%.

Stark also urged lawmakers not to revert to “government pricing” more than a decade after Massachusetts the authorities deregulated the auto insurance market from a “fixed and established system” to a “managed competition” framework to invite more options for consumers.

“We have learned our lesson… Massachusetts, throughout that period of fixation and establishment, was consistently the fifth, seventh, highest premium in the country, ”Stark said. “But after making these reforms and ending this kind of government pricing, we have fallen to 15th and we are still 14th.”

Wednesday Joint Committee on Financial Services the hearing will likely not be the last time the subject of collision repair labor rates will be debated Beacon Hill this session.

In the fiscal year 2022 budget, the Legislature created a special commission to study auto body tariffs, made up of lawmakers from the two major parties, three people appointed by the Office of Automobile Insurers, three people appointed by the Massachusetts Alliance of Automotive Service Providers, a representative of a school or a professional-technical program and a car dealership.

House Minority Leader Bradley jones named Seekonk Rep. Steve howitt, car enthusiast, as a member of the special committee.

“His interests and years of experience in these areas make him the ideal choice to serve on this special committee which will ensure that bodywork labor rates are fair and reasonable,” Jones said.

The panel is tasked with producing a study which includes “(i) an analysis of labor rates of auto bodies in the Commonwealth, including a comparison of labor rates in neighboring states; (ii) an analysis of the impact of managed competition in the motor insurance market on labor rates; (iii) an assessment of the reasonableness of current labor rates and, if not, an assessment of potential methods of calculating a reasonable labor rate; (iv) the number of auto body shops in the Commonwealth each year from 2008 to date, including the number of shops that have closed during this period; and (v) an analysis of the impact of labor rates on body shop labor. “

The group is expected to hold at least two public hearings “in geographically diverse areas” of the state and is expected to file a report with its findings and recommendations for possible legislative or regulatory action by December 31st.

representing James murphy, who, as co-chair of the Financial Services Committee, will co-chair the special commission on labor rates with Sen. Brendan Crighton, said he expects the special commission to be operational shortly.

“We’ll have a process in place – that we’ll decide as a committee what that process will be, whether it’s hearings or visits around the Commonwealth or whatever – we’ll look at past commissions to see. how they were presented and what were the conclusions, although we know some of the conclusions anyway, ”he said.


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