The percentage increase in body labor rates being paid to shops this year is averaging 9.5%
across the 12 major insurers asked about in CRASH Network’s latest “Collision Industry
Business Perspectives” survey, completed in September. Three out of four shops participating in
the survey reported a labor rate increase from one or more of those 12 insurers in the past six
months. Among shops reporting rate increases over the last two years, the average body labor
rate has increased from $54.55 in late 2021 to $63.67 last month, a jump of 16.7%.
There is no question that more and more shops are being reimbursed for the steps involved in
processing total losses (CRASH 10/24/22). “Because the process has continued to become more
complex and time-consuming, shops are increasingly billing for the time they spend processing
total losses, and rightly so,” shop consultant Mike Anderson of Collision Advice said. In the
most recent “Who Pays for What?” survey, only 7% of shops said they never seek to be paid
for total loss processing. That’s down from the 14% a year ago, and far below the 30% of shops
that never billed total loss processing fees in 2015. “Rather than simply billing an ‘administrative
fee’ for this work, we are seeing shops itemizing the steps involved, such as a repair plan fee,
disassembly fee or OEM research time,” Anderson said. “With 93% of shops regularly billing for
this added work, it will be interesting to watch how AI impacts total loss processing, identifying
total loss vehicles earlier in the process, possibly avoiding many of these fees at the shop, as well
as storage charges.”
Data from Cambridge Mobile Telematics shows distracted driving, as measured by “moving the
[cell] phone around in a vehicle or hitting the screen,” has reached record highs.“About 58
percent of trips involve that phone screen interaction, on average for two minutes and 12 seconds
per hour of driving per person,” Cornelius Young, senior vice president of product for
Cambridge Mobile Telematics said at last month’s CIECA conference. “And they’re doing it at
the riskiest times. About 34 percent of this is at speeds higher than 50 miles per hour. If you look
down at your phone for two seconds [at that speed], you’ve just gone the length of a football
field. A lot can happen in that amount of time when you’re on the roads. ”Interestingly, that same
percentage – 34% – of all the accidents Young’s company has looked at (he said his company
has millions of drivers using its crash detection technology) “have active phone distraction 60
seconds prior to the crash, and in some cases, it’s right as the crash is happening.” Collision
repairers planning marketing might want to consider another data point Young shared: “It might
not be a surprise that on the holidays, there’s more distraction,” he said. “So on Labor Day,
we’re 5 percent more distracted versus the other days around Labor Day, and on Thanksgiving,
we’re 11 percent more distracted.”