OEM repair procedure laws need a narrow focus

July 2, 2019
Ensuring payment for OEM repairs is the first of two steps that need addressing.

Earlier this year I wrote a column suggesting the industry should “be careful what you wish for” in terms of the automaker shop certification programs.

That same admonition, about being careful what you wish for, has been coming to mind a lot as I watch various efforts in states around the country to enact legislation related to OEM repair procedures.

Some of these legislative proposals look great to me. As I write this, I don’t know how far it will make it through the legislative process, but a relatively simple proposal in New Hampshire would require insurers to pay all claims based on repairers’ use of OEM repair procedures.

Bills in other states, however, are getting bogged down by opposition because they try to take on other issues, like placing new restrictions on non-OEM parts. That’s a separate issue. It’s hard for someone to argue against the need for insurers to pay for safe repairs that follow OEM procedures, but there are plenty of players in the industry who can and will argue for consumer choice of parts. Don’t invite their opposition by trying to take on that issue – or steering or any of the other host of industry issues – in a bill about getting paid for use of OEM repair procedures.

But aside from that, here’s where the “be careful what you wish for” warning comes in: The bills I’ve seen in some states related to OEM procedures don’t just mandate that insurers pay for those procedures when they are followed. The bills actually require that shops follow those OEM procedures.

I was speaking at an industry gathering earlier this year where a lobbyist was suggesting just such legislation. And at a survey at a Collision Industry Conference (CIC) this spring, while 32% of attendees said legislation is needed to prevent insurers from using payment practices to push for repairs that vary from OEM procedures, a whopping 48% said they support legislation requiring the use of OEM procedures.

Here’s why that concerns me. I’m all in favor of insurers paying for OEM procedures when that’s what you’re doing. But in all the time my team and I spend in shops throughout North America, we rarely if ever have seen a shop following 100% of the OEM repair procedures 100% of the time.

Has your shop aimed the headlamps on a late model Ford Fusion, for example? You probably have. But did you first check and adjust the pressure of all four tires? Do you make sure the trunk was empty? Did you have a person weighing 150 pounds in the driver’s seat? Was the vehicle on a level floor, not one (as in most shops) slightly sloped for water run off? Do you, only then, aim both the high and low beam on each side, using the proper distance and exact measurements specified by Ford?

If you didn’t do each and every one of those things, you didn’t follow the OEM procedure for aiming those headlights. And if your state had a law mandating that all repairs be done according to OEM procedures, you would have just broken that law and committed fraud.

Don’t get me wrong: I think every shop should be following those procedures. I just don’t think our industry has reached that point yet. After all, the estimating systems still have a labor allowance for that entire procedure of less than half-an-hour, with no specification of which steps are included or not included. We have work to do before a law should mandate the use of OEM procedures.

That’s why I say be careful what you wish for. Should an insurer be required to pay you for your work in following OEM procedures when you do so? You bet. That’s a good law. At some point should there be a law requiring shops to follow OEM procedures? Probably. They should be doing them.

But I’m realist enough to know that for now such a law will only get shops in legal trouble. Some might argue that’s a good thing. But I think we should focus on making sure that at least the shops that are actually following the procedures get paid. Then we can take on the massive issue of shops failing to do so.

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