Wednesday, Jan. 31, 2007 | 7 a.m.
A group of auto body shop operators, tired of their grease monkey image, is pushing for changes to Nevada law that it says will identify the best shops, improve service and help hold down repair and insurance costs.
It faces opposition from the insurance industry, which worries that it may boost insurance rates, and from owners of smaller body shops who fear they may lose business.
"Our industry has come a long way since the days when you walked into a filthy garage and sat on a broken back car seat in a dusty waiting area," said Michael Spears, owner of the Collision Authority body shop in Henderson and a founding member of the Nevada Collision Industry Association. "Our proposed law changes are consumer-driven to further improve the image of our industry and benefit our customers."
The draft legislative package seeks to:
Former North Las Vegas Assemblyman Bob McCleary, executive director of the Nevada Collision Industry Association, says the bill drafts are slated to go before the Assembly Transportation Committee but as of yet have no legislative sponsors.
The association claims 81 members from among the state's 250 licensed body shops.
Spears, who has been in the business for 30 years, says the Class A designation bill is intended to give consumers peace of mind.
"Wouldn't you as a consumer want to know that the shop that is doing major collision repairs on your car has ongoing training of personnel and certified equipment to make proper repairs?" Spears said.
"Any shop can fix a parking lot dent, but when it comes to major collision repairs the Class A designation will elevate the playing field and keep costs in line by increasing competition," Spears said.
Smaller-shop owners who cannot afford some equipment but still do work that is up to factory specifications, which insurance companies require, take exception to that reasoning. They say the bill would give an unfair business advantage to larger shops.
"It looks like what they are trying to do is weed out the smaller shops," a longtime Las Vegas mobile collision repairman said. "That could lead to Class A shops getting too much business and not getting the cars repaired and out quickly, which will inconvenience customers."
Dean Hood, who has been in the auto body business 30 years and owns the one-year-old Sunland Collision shop on Boulder Highway, said he may not seek a Class A rating for his medium-sized business.
"A lot of this business is referral work from the insurance companies," said Hood, who is not a member of the body shop association. "If you work well with the insurers like we do, your shop will always have plenty of work regardless of whether you have an A rating."
Under Nevada law, consumers may choose any licensed body shop to make repairs and their insurance company must foot the bill.
However, it is not uncommon for people to ask their insurance company for the recommendation of a good body shop to fix their cars.
Bob Feldman, secretary-treasurer of the Nevada Insurance Council, says that while there are good points about the Class A proposal, there also are concerns that some Class A shops will cite the designation to boost their parts prices and labor charges.
"Any issue that has the potential of increasing prices for auto repairs or insurance rates has to be looked at closely by the Legislature," he said.
The proposed bill that would prohibit insurance companies from prorating the value of some damaged parts faces strident opposition from insurers.
"Our (insurance industry) job is to make you whole - that is, return your car to the same condition as it was before the collision - not completely restore your car to like new," said Bob Compan, the chairman of the Coalition of Nevada Insurance Lobbyists.
He said if that bill becomes law, insurance companies will have to raise rates or replace old damaged tires and batteries with undamaged but similarly worn items.
The bill draft to prohibit insurance companies from owning collision shops would affect just one business in Nevada, a Las Vegas shop owned by Allstate Insurance.
Mike Rorman, former president of the body shop organization, said the bill draft is based on a law passed three years ago in Texas.
"There were studies there that found that shops owned by insurance companies were repairing damaged parts that should have been replaced in an effort to cut costs that were not in the best interest of customers," Rorman said.
"It also creates an unfair competitive advantage because the insurance companies will steer their claimants to their shops."
The counter argument is that insurance companies are fitting owners of body shops because their oversight would prevent the unscrupulous practices of unnecessary repairs or charging for parts that are not installed.
"It's a profit issue," Feldman said. "Insurance companies could run their shops at less profit than privately owned shops and that could help reduce rates."
Feldman said the success or failure of any of the association's bills rides on whether lawmakers believe significant changes in the industry are needed.
"I'm not so sure that at this time there is a need for any new legislation," he said. "Overall, we have a good, reputable body shop industry in Nevada."
The Nevada Collision Industry Association was created after a 2003 law required Nevada insurance companies to deem a car totaled if the cost of repairs - after the deduction of labor, paint, taxes and towing expenses - exceeds 65 percent of the car's value. The law effectively cut into the body shop business.
McCleary said lawmakers passed the measure without consulting the collision industry.
"That was because there was no association - no voice to tell our side of the story," McCleary said. "Now we have a voice."
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