There were noteworthy differences in every comparison study, in terms of the materials used and the construction of the parts. This is important because a big role these parts play is to transfer energy occurring from a collision, and this can be severely impacted if the parts are not constructed to the proper standards. Additionally, this energy transfer plays a huge role in the response of vehicle safety restraint systems (SRS), and this could affect how airbags function during a collision. However, there were also tests performed with A/M parts that were manufactured by companies who used the same materials as the OEM, and who used 3rd party testing, and these parts performed better in the tests.

This demonstration set the wheels in motion for associations and some insurance companies to take action on the issue. First, the Automotive Body Parts Association cautioned its entire membership that it should review with its suppliers the quality and testing of structural replacement parts, and if testing is not available, or inadequate, these parts should not be used. The Taiwan Auto Body Parts Association also took notice and advised its members to stop selling and manufacturing non-certified parts.

Now it seems as some insurance companies are noticing the potential consequences of continuing to use some A/M parts after seeing the results of the above demonstration. In January, GEICO Insurance sent a notice to its adjusters that it would no longer specify aftermarket bumper reinforcements, brackets and energy absorbers. “They basically told all the adjusters that they won’t be using any more structural pieces from aftermarket,” says one shop owner on GEICO’s program who asked to remain anonymous. “That includes reinforcements, radiator supports, structural brackets and things like that.”

Esurance Insurance also sent notice, to their network provider shops that it would only use OEM bumper absorbers and bumper brackets on estimates. In a statement prepared for ABRN, Joe Laurentino, stated the following:

“At Esurance we believe competition from the aftermarket suppliers has proved valuable in maintaining stability in the pricing structure, while helping to maintain abundant parts availability. Our long held belief that certain structural components vital to the Supplemental Restraint System warrant replacement with OE parts was reinforced by the demonstrations of Mr. Toby Chess. Our decision to expand our policy to include the brackets and absorbers was influenced by that same demonstration. Esurance continues its participation and support of the [Collision Industry Conference] and all other partnerships focused on education in unison to better serve our customers.”

So how do you know if your A/M parts are of the same quality as the OEM? Your best bet is to first try to only have your vehicle’s structural parts replaced with OEM. For other parts, make sure they are CAPA certified (if applicable). CAPA is a non-profit organization that certifies the quality of automotive parts used for collision repairs. They certify various metal, plastic, and lighting parts. The CAPA certification process involves the manufacturing facilities being approved, individual parts submitted for testing, and are subject to random tests for continued compliance.

Some suppliers such as Keystone have parts tested by 3rd party companies and have their own quality standards, so buying from them may give you a little more assurance. Other than that, it will be hard for you to tell whether or not you’re A/M part will be of the same standard as OEM. Most of the A/M parts manufacturers are overseas, and go through a various network of distributors, so just trying to trace the part back to the original manufacturer can prove to be difficult. Lastly, you can choose to replace your damaged parts with used (LKQ) parts. Typically, insurance company guidelines state that LKQ parts will be the same year or newer than your vehicle (so your vehicle will technically be put in the same condition it was prior to the accident), and since they are original parts (just used), at least you will have the satisfaction of knowing what is being put on your vehicle.

If you do have your vehicle repaired, and you are being told CAPA parts are being used, you will see the above tag on the part.  If you don’t, you need to find out why.

To see the powerpoint presentation comparing A/M and OEM parts, click here.  Then click on the banner in the middle of the page.

One thing you need to do is shop around for insurance.  It is not uncommon for rates between two different insurance companies to differ by hundreds of dollars for the exact same coverage.  Currently, the auto insurance industry is extremely competitive, so chances are there is an insurance company willing to offer you a competitive teen rate, but you won’t know unless you actually shop around.  Adding teens to a family policy rather than putting them on their own will also lower the rates.

Give teens a lower priced secondhand rather than a brand new one.  Usually, the more expensive the car, the more the premiums are (A disclaimer here is that some lower priced cars just happen to be very popular to car thieves, which can make them more expensive to insure).  A vehicle with air-bags, an alarm system, day time lights, and anti-lock brakes can also lower your rates.  Teens that have completed a course in defensive driving may also warrant a lower rate.

It would also be a good idea to check how much your premiums would decrease if you raised the deductible.  In most cases, the higher the deductible, the lower your monthly premiums are.  You should also encourage teens to get good grades.  Insurance companies know, or seem to think that students with better grades will be more responsible on the road.  This results in lower premiums.

The most important thing you can do is make your teen a safe driver, and you can do this by teaching them responsibility.  Hold them accountable for their actions, and make them responsible for that $1000 deductible.  Doing so may just be enough to encourage them to drive just a bit safer, which may result in more than just monthly savings.

Here are some interesting teen driving stats:

1. The accident death rate for male teens is around 1 ½ times more than that of female teen drivers.
2. The highest risk of teens having an auto accident occurs within the first year of driving.
3. Having male teen passengers in a vehicle has been shown to increase the likelihood of high risk driving behaviors among teenage male drivers.
4. According to studies, of the male teen drivers b/t ages 15-20 that were killed in an auto accident, 38% were speeding and 24% had been drinking alcohol.
5. More than half of teen deaths from auto accidents occurred between 3 p.m. and midnight and 54% occurred on weekends.
6. Teen drivers are more likely to speed and tailgate.
7. Teens have the lowest rate of seat-belt use.  According to surveys, about 10% of high school students report they do not wear seat belts.
8. Because they lack driving experience, teen drivers tend to underestimate hazardous driving situations and are less able than older drivers to recognize dangerous situations.
9. Teens are about 10 percent of the US population and account for 12 percent all fatal auto accidents.
10. The risk of being involved in an auto accident is the highest for drivers b/t 16-19 years old.

Absent the seatbelts, airbags, and crush zones, the structure of the Bel-Air proved to be weaker during the impact.   During the test, the Bel-Air’s body crumbled severely, the windshield popped out, the steering column smashed into the dummy driver, and the driver’s side door opened.  The damage in general to the vintage car was quite devastating.  The Malibu, on the other hand, provided enough protection to earn the IIHS’s highest safety rating.

I guess all that steel wasn’t as safe as we all thought.

To check out the crash video, click here.  Be sure to compare the effect the impact had on each dummy driver.  For the Bel-Air dummy driver, the injuries would have been extremely severe.

Airbag theft has become a major problem in recent years, representing around 10% of all auto thefts, and an annual loss of around $50 million to vehicle owners and their insurance companies. They have become a hot commodity on the black market. Many law enforcement agencies are even calling airbags “the new car stereos.” It’s due in part to their growing popularity among auto thieves. In just a few minutes, a thief can be off with airbags worth thousands of dollars.

A new airbag can retail for around $1,000 from a car dealer. On the black market, however, they can cost $50 – $200. Because of the huge difference in cost, and because of their portability, airbags can be easily removed and installed as “new” by

unscrupulous collision repair shops. These shops then charge the vehicle owner or the insurance company the full price for the replacement, making a huge profit, and committing insurance fraud at the same time.

Here are some tips from the National Insurance Crime Bureau on how to avoid airbag theft and fraud:

- Use a reputable automobile collision repair shop that employs ASE-certified mechanics.

- Inspect the invoice to ensure the repair shop purchased the airbag from a manufacturer, dealer or recycler. Do this will ALL replacement parts which are stated on the estimate. Many shops will charge to replace a part only to repair it to enjoy a higher profit margin.

- If possible, inspect the airbag prior to installation. If new, it should be packaged in a sealed container from the manufacturer.

- The trim cover over the steering column should be the same color as the remaining trim interior (but not always). If not, it is an indication that the original airbag has been replaced.

- When you turn on your vehicle’s ignition, a red SRS (Supplemental Restraint System) indicator should light up and flash in the instrument panel display, indicating the airbag system is activated. No SRS light indicates a problem with the airbag system that could result in no airbag activation.

Well, the insurance company is not obligated to keep you in a rental for as long as the repair facility has your vehicle.  They are only obligated to pay for a comparable rental for as long as it takes to repair your vehicle PER THE ESTIMATE. This is easy to calculate; look at the end of your repair estimate at the total number of  hours needed to repair your vehicle (there will be a total at the bottom that is usually the sum of paint, repair, replace, etc.)  You then figure that the average repair technician can spend 6 hours a day on your vehicle.  So, for example, if the total number of repair hours is 60, divide that by 6, and you have 10 days needed to repair your vehicle.  You then have to add additional days to compensate for any weekend days that the repair facility is not open.  The result is the “reasonable” amount of time the insurance company should put you in a rental.  The fact that the repair facility is really busy is not the insurance company’s problem, and they usually don’t consider this.  An exception here is if the insurance company recommended the shop.  Another exception is if there are delays out of the repair facility’s hands.  For example, if your vehicle needs a special order part, it will have to come from the manufacturer to the dealer, and then on to your repair facility.  An extension of your rental should be allowed in this situation.  Further, once repairs have begun and your vehicle is torn down, there may be additional damage found.  By the time the adjuster goes to the repair facility and writes a supplement, 2-3 days could have past.  In this case, the rental should be extended for the same amount of time, as well as the additional time needed for the supplementary repairs.

The last thing I will mention is about the term “comparable vehicle.”  This basically means that the insurance company is obligated to put you into a vehicle that is similar in class to your own.  If your vehicle is a Toyota Corolla, you are not entitled to rent a Mercedes (unless you want to pay the difference out of your pocket).  If you go to the rental agency and they do not have a comparable vehicle (or even if they do), they may try to convince you to upgrade.  They make a ton of money this way.  You may also be advised to take out their optional insurance (many rental agency employees are promoted based on their “upgrade” and “insurance” sales performance).  Be aware that you will not be reimbursed for this as your own insurance should transfer to the rental vehicle (and you are legally required to have insurance).  If the rental agency has a direct bill already setup with the insurance company, and they do not have a comparable vehicle at the moment, they will usually just upgrade you for free, as the volume of business they get from the insurance company makes up for the loss of “upgrade income.”

Are you responsible for their injuries?

Well, under the Rescue Doctrine, you may be.  Under this doctrine, the party that causes the accident can be liable to anyone that is involved in the efforts to rescue that person.  The reasoning behind this is that the good Samaritan would not have been in that particular dangerous situation and sustained those injuries had it not been for the negligent party’s actions.

There are 4 main elements  which must be met in order for one to bring action against the negligent party.

1. There must be peril or the appearance of peril to a third party, caused by the defendant.

2. That peril or appearance of peril must be imminent

3. A reasonable person would recognize the peril or appearance of peril and the plaintiff must also have actually recognized it.

4. The plaintiff must have exercised reasonable care in effecting the rescue.

Depending on state, police officers, firefighters, etc. are not allowed to invoke the Rescue Doctrine because rescuing people is an essential part of their job function.  For the rest of us who have a good conscious, if we see someone in distress, we feel obligated to help.

Sometimes people are hesitant to help another because they have heard stories of good Samaritans being sued by the injured party for causing injuries to them during the rescue attempt.  Well, under the good Samaritan law, a negligent party may not be allowed to sue a rescuer.  For example, say a motorist is driving while intoxicated and flips their car over.  They are stuck in the middle of the freeway.  A good Samaritan pulls them out and carries them to the side of the road.  During the course of this movement, the rescuer seriously injuries the driver’s back, resulting in partial loss of movement.  Under the good Samaritan law, the injured person may not be able to sue the rescuer for injuring their back.

The laws regarding the good Samaritan vary by state, but some states do permit the negligent party to sue the good Samaritan if they acted in a negligent way.  For example, looking at the previous example, if the injured person was already laying on the side of the road, away from oncoming traffic, then moving them may be considered negligent, and the rescuer may be liable for any injuries caused by moving them.  With the litigious society we live in, fear of a lawsuit can stop even the most helpful good Samaritan.  This is why these laws were created, to protect the general public from liability from helping another person who they have no obligation to help (and who are not expecting anything from helping them).

The best way to prevent yourself from potential liability is by always acting in the best interests of the victim.  If you are trying to rescue someone so that you can be portrayed as a hero, you may not be protected under good Samaritan laws.

New York State law prohibits insurance brokers and/or agents from accepting payments to steer their customers to specific repair shops, but there are no laws preventing the glass shops from offering these incentives in order to gain business.  The gift cards were valued between $35 -$60 each, and the NYSID issued fines anywhere from $250 to $5000.

The owner of Bison Glass, Ralph Galluzzi, stated that this type of practice has been going on since the early 80’s and that it became so widespread that if a company didn’t pay up, it wouldn’t get any business.

“There was a time where we were all involved,” he told The Buffalo News. “It got to the point where the insurance agents were holding us ransom and wouldn’t give us any referrals unless we gave them a kickback. It became a competition for what glass company would pay the most. I’m glad that it’s done. It’s wrong. We all did it. It was the cost of doing business, until I decided that that cost of doing business was costing me more than I was making in profit.”

A DRP is a contract between an insurance company and a collision repair shop.  It is considered a contract of adhesion, as the insurance company sets the terms, conditions, and obligations of the repair shop, and the shop owner can take it or leave it.  There is usually no room for negotiation.  Insurance companies can provide a lot of business to a shop, and they know this, and since there is no shortage of shops that would love to be in the DRP, the insurance company can be extremely strict on it contract terms.

So why does an insurance company establish a DRP to begin with?  The answer is simple – to control costs.  This isn’t necessarily a bad thing.  Every company that wants to be successful has an obligation to control costs, or it shouldn’t be in business to begin with.  It is when you control the costs so much that it results in negative relationships with vendors, partners, and eventually consumers, the long term consequences of such actions may outweigh any cost savings you achieved.

The main issues DRP shops have with the insurance company are the labor rates and the excessive persuasion to use aftermarket and used parts instead of original equipment manufacturer (OEM) parts.  Let’s looks at the first issue:

Labor Rates

In exchange for being a provider shop, the repair facility gives up the right to charge normal market rates for repairs made.  Here’s an example – when I was in the field, there was a provider shop that was being paid $28/hr. for labor, even though the normal market rate in that area was between $34-$36/hr.  So what did they do to compensate for this? Simple, they just added an hour or two here and there to make up for the difference.  This is not something new, but rather common practice within the industry. Usually, in the beginning the shop is happy to be a DRP facility, but then over time and experiencing frustration with the insurance company, their attitude changes and they begin to feel taken advantage of. They want to be paid a reasonable rate so that they can make some type of profit, especially when the volume of work does not justify the lower rate.

Parts Usage

We live in a world of substitutes and generics, and vehicle parts are no exception.  The term aftermarket (A/M) simply means that the part was not made by the original equipment manufacturer.  There are numerous A/M parts manufacturers.  Some of them offer high quality parts that are just as good as OEM parts, while other A/M parts are of inferior quality.  Insurance companies like using A/M parts so much because they can cost up to 70% less than OEM parts.  Just to clear something up, most vehicle manufacturers do not design and produce all the parts used to build their vehicles.  Rather, they contract with independent companies to do this.  Then, after some time, these companies are allowed to sell these parts to distributors, who then send them off to various retailers.  So in some cases, if you call an A/M parts company and they tell you they have an OEM-part in stock, it will be the same exact part as the one you will get from the dealer, with the exception of the packaging.

Now back to A/M parts.  There has always been a great debate between vehicle manufacturers and the insurance industry between the safety and quality of OEM vs. A/M.  I will not go into here, but will just say there are some parts of your vehicle that should never be replaced with A/M parts.  One example is the radiator support.  The radiator support is considered a structural component of your vehicle, so it is best not to mess around with A/M parts.  Additionally, a hood of a vehicle should also be replaced with an OEM-part, as there is a safety issue regarding the quality of the hood latch that is sometimes integrated into the hood.  Many insurance companies recognize this issue, and will request the use of used parts instead of A/M, which is still much cheaper than using new OEM.  When it comes to sheet metal parts such as a fender, the insurance company should at least be using CAPA certified A/M parts, which are continuously tested to meet OEM specifications.

The issue repair shops have with A/M and used parts is not simply the use of them, but rather that the insurance companies insist or require shops to use them all the time.  Many DRP shops are audited on their used and A/M parts usage.  Those that do well may be given more business, while those who are not may be dropped.

Nine times out of ten you will never know if A/M parts are used on your vehicle.  It usually only becomes an issue when the repair facility tells the vehicle owner that these parts are being put on, and many of these shops have no problem instigating a dispute between the insured and the insurer.

So how does this concern you?  I mean, what do you care if the insurance company is paying the repair facility less, you just want your vehicle repaired.  Well, one common practice that shops do is to compare the repair vs. replace cost (to their advantage).  For example, if the fender of your vehicle is damaged and an A/M part is available, the shop may add the replacement time and markup on the part against “X amount of hours to repair the part, then they choose the option best for them.  This might affect you negatively because instead of having a quality replacement part put on your vehicle, it will be repaired with bondo.

Steering

Much attention surrounding the DRP issue revolves around “steering.”  Steering is the practice by which the insurance company attempts to influence you when choosing a repair facility, particularly involving the use of their DRP shops.  Steering is unethical, but most states also have anti-steering laws in order to protect the consumer.  Depending on the states, some insurers are prohibited from recommending a shop, some can offer recommendations only when you ask for one, and some are required to send you written notice concerning your rights when choosing a repair facility.

Opponents of DRP (usually non-DRP shops) argue that adjusters are unfairly taking vehicles out of repairs facilities and into their own DRP shops by telling the customer the repair facility is not adequately equipped to handle their repair, or that since the repair facility is not an “approved shop,” the insurance company will not help them is there is an issue.  I have personally seen this many times when I was involved in the collision repair industry.  In my opinion, adjusters are trained to only trust their DRP shops, and in regards to all the other shops, they have an “us against them” attitude.

Benefits of DRP’s

With the vehicle owner in mind, there are some great benefits that are associated with DRP’s.  First, since the insurance company is recommending their shop to you, they will be guaranteeing the vehicle repairs as long as you own the vehicle.  In most cases, this guarantee also applies in cases where the repair facility has gone out of business.  It is very unlikely that the insurer will go out of business, so you have a guarantee that is pretty solid.  And if for some reason the insurance company is not living up to their promise, you can always contact the Department of Insurance, who will promptly look into the matter.  If you chose a repair facility on your own and they go out of business, you are pretty much stuck.

Another benefit of using a DRP is that since the insurer chose the shop, any delays caused by the repair facility are not your problem.  So if you are in a rental car that the insurance company is paying for, they cannot reasonably deny the extension of your rental because of their shop’s delays.  However, if you were to choose your own shop, the insurance company would only pay for the number of rental days based on the repair estimate, and any delays caused by the repair facility would be your problem.

If your vehicle is inoperable, many insurers will tow it for free if you use a DRP shop.  Anyone who had ever had to deal with a tow truck driver will really appreciate this benefit, as tow truck operators are notorious for ripping people off.  A $250 bill for a 2 mile tow was not unheard in the area I worked.

My Opinion

I personally think using a DRP shop has more benefits than drawbacks.  In most cases, the repair of your vehicle will be much more streamlined than if you were to use your own shop.  With that said, there are some great independent shops out there that take care of the entire process for their customers.  If liability is not an issue, repairs can usually be started at a DRP shop the same day it arrives, whereas if you used your own shop, you will have to wait for an appraiser to go out and write an estimate, then possibly a supplement, and not to mention being caught in the middle of any disputes between the shop and the insurance company.  With the issues of labor rates and parts usage, they are always going to be there, whether you use a DRP shop or your own.  Discounted labor rates are part of almost every type of business.  When your doctor prescribes you medicine and you go to the pharmacy to fill it, it will most likely be with a generic.  This is because most health insurance companies will only pay for generics, if they are available.  Nobody ever complains about this, and we are talking about something you are putting into your body.  So why are people making a fuss about a used or A/M part?

A basic liability policy is broken down into three sections, the per person liability limit/per accident liability limit/property damage liability limit.  To illustrate this, lets look at the following:

15/30/10

The above represents the structure of a liability policy, which is abbreviated for $15,000/$30,000/$10,000.

A policy with BI of $15,000/$30,000 and PD of $10,000 will pay out as follows:

• The maximum limit for one person’s injuries, medical expenses, etc. is $15,000 under the bodily injury portion.

-So if you are liable for an accident and the person you injured incurred $100,000 in medical bills, the maximum your insurance policy will pay is still $15,000.  You would be responsible for the difference.  If you have assets, those will be at risk should the injured party take you to court.

• If two or more people are injured, the maximum limit for the accident will be $30,000.

-In some cases, the other vehicle will have multiple occupants that are injured.  If this is the case, remember that the most any one person can get is $15,000, and the most the policy can pay out to all those injured is $30,000.  It is the job of your adjuster to try and settle all injury claims within your policy limits.  This becomes complicated when the occupants are seriously injured.

• The maximum limit for damage to other people’s property (their car, their fence, etc.) is $10,000.

-This limit represents the maximum amount your insurance company will pay PER LOSS, not per person.  So if you are liable for an accident and as a result 3 other vehicles are damaged, it will be very likely that the damages exceed your limits.  Payment for rental, loss of use, etc. is also included in this limit.

It is important to look at your policy limits to ensure you are adequately insured. Many people tell their insurance company that they want the lowest rates possible, and the easiest way to do this is by offering lower limits. However, if you are involved in any moderate accident, and are found to be at fault, the small amount of money you saved on your monthly premiums may be peanuts compared to your personal exposure. If you have assets, you should definitely look into having higher limits. With the technology going into today’s vehicles, repairs exceeding $10,000 are very common.  And with the cost of healthcare these days, how far do you think $15,000 will go for treating any type of moderate injury?  Do you want to be held personally responsible for the difference because you didn’t have enough coverage? If not, please do yourself a favor and make sure you have sufficient insurance coverage for your particular needs.