Direct repair agreements – and in California, state regulations – prohibit participating shops from charging administrative fees related to processing of total losses. But the percentage of U.S. shops overall saying they are paid such an administrative fee has risen steadily over the past several years, according to the findings of the “Who Pays for What?” survey series.
In 2021, a strong majority of shops (72 percent) said they are paid always, or most of the time, when they bill for this work. By comparison, when the “Who Pays for What?” surveys began in 2015, just 46 percent of shops said they were regularly paid a total loss administrative fee when they invoiced for it.
Likewise, the percentage of shops that say they have never billed for this fee also has declined steadily since 2015. Today, only 11 percent of shops say they never charge a fee to process a total loss, but back in 2015, that figure was 30 percent.
“Processing a total loss has become more complex than it used to be,” said Mike Anderson of Collision Advice, who conducts the quarterly “Who Pays” surveys in conjunction with CRASH Network. “It can involve more tear-down, more research of OEM procedures, vehicle scans and more.”
According to the 2021 survey, 74 percent of shops itemize charges (as opposed to charging a flat fee) for total loss processing. In addition to the administrative time, these charges may include moving a non-drivable vehicle, covering the vehicle to protect it from weather, etc.
Back in 2015, 38 percent of shops believed that the top eight largest insurers in the “Who Pays” surveys “never” paid an administrative fee for total losses. Today, only 17 percent still think so.
The latest quarterly “Who Pays for What?” survey is now open through the month of January. It focuses on “not-included” refinish labor operations. Shops can take the survey at: https://www.surveymonkey.com/r/YDTT8NN
Survey participants receive a free report with complete survey findings along with analysis and resources to help shops better understand and use the information presented.
Anderson said the survey, which will take about 15 minutes, can be completed by anyone in a shop familiar with the shop's billing practices and the payment practices of at least some of the largest national insurers. Each shop's individual responses are held in the strictest confidence; only aggregated data is released.
The results of previous surveys are also available online (https://www.crashnetwork.com/collisionadvice).
Collision Advice (www.CollisionAdvice.com) is an independent training and consulting firm featuring some of the most respected and experienced experts in the collision repair industry. CRASH Network (www.CrashNetwork.com) is a subscription newsletter offering news and information not available from other industry sources.
