The wave of legislation aimed at restricting insurance company-owned collision repair facilities has hit a bit of a breakwater, but the storm responsible for the tempestuous seas will continue to challenge insurer-owned shop operations. As you have read in our news section, several states that have introduced legislation restricting insurer-owned shops have seen legislation falter or enter a holding pattern. This is to be expected.
Following the successful passage of legislation in Texas last year, and the subsequent lawsuit challenging the law by Allstate and Sterling, many expected that few bills would be introduced until the legal issues were resolved. That was not the case.
Numerous states saw legislation introduced in their most recent legislative sessions. While successes have been hard to come by, a decision in Allstate/Sterling’s suit—either for or against the insurer and its shop operations—will bring with it a flurry of new and renewed legislative and legal activity.
No matter what the outcome of the suit in Texas, and any future legislation, Allstate will find itself expending enormous resources in an attempt to defend its investment and business model. That fact alone raises questions concerning the viability of the insurer-owned shop model in the short run. An outright failure of its lawsuit, or more likely a partial success, will set the tone for future legislative and legal battles for many years to come for Allstate/Sterling. A complete and total success will only change the battlefield Allstate/Sterling faces.
Can the efficiencies and control gained by an insurer-owned shop operation bring benefits that outweigh years of legal wrangling and uncertainty? That is the main question facing Allstate/Sterling and its opponents today. One can only imagine what it is like to operate and plan for the one’s business’ future in the environment currently faced by Allstate/Sterling. That fact also calls into question the viability of Allstate’s long-term investment in the repair industry.
On another note, this marks my final issue as editor in chief of ABRN. The past four years, since I returned to the pages of ABRN, have been a tumultuous period for the collision repair industry. With the advent of insurer-owned shops, declining claim and repaired vehicle frequency, and the myriad issues concerning the average repairer, my time back with ABRN has been eventful.
ABRN has been a joy to produce during the last four years. Like many of you, I grew up reading and learning about the industry from its pages. We have a great staff and it keeps getting better. First, please welcome Mark Johnson as senior editor. Mark comes to ABRN after four years as editor in chief of Brownfield News, he also knows his way around a welder and grinder. And, with Mike Willins, the senior editor of our sister publication, Aftermarket Business, joining as editor in chief, I believe ABRN will continue to fulfill your needs in the years to come.
Mike comes to ABRN after serving with Aftermarket Business since 1997, first as managing editor and most recently as senior editor at the start of 2001. He has been a guest speaker at aftermarket industry events and with Mike’s help, Aftermarket Business earned the 2004 Publication of the Year given out by the Association of Automotive Publication Editors. Mike’s experience in the aftermarket world will be invaluable in his new role. Please join me in welcoming him to the helm of ABRN.
As for myself, I hope to spend more time in and around repair facilities and will continue to work on industry projects, including CollisionWeek, the Internet publication I founded in 2000. Before I leave, I must thank all of our readers who welcomed me back to ABRN and never hesitated to give me the invaluable benefit of their guidance and thoughts on critical issues facing repairers. Your insight has made the publication better and my time here rewarding.
