BOSTON — Labor charges at Massachusetts automobile body stores have been stagnant for yrs, according to a new report, which phone calls on Beacon Hill to increase how a great deal non-public insurers pay for repairs to assistance guidance the having difficulties sector.
The report launched by the Legislature’s Fee on Automobile System Labor Rates lays out a collection of selections that would eventually raise labor rates for automobile physique retailers and urges lawmakers to contemplate a number of recommendations.
The 13-member panel, which provided lawmakers, car entire body fix shop homeowners, automobile sellers and insurance plan marketplace reps, was produced by the Legislature in 2021 to research the affect of insurance coverage deregulation in the vehicle human body business and decide if premiums compensated by insurers must be amplified.
The panel adopted the report by a vote of 10-3, with the three representatives from the insurance policies field registering an “unfavorable” vote on its recommendations.
A bulk of the commission concluded that the car human body premiums require to be amplified, but instructed there are various diverse possibilities to receiving there — which include passage of expenses at this time pending just before the point out Legislature.
A single recommendation, made available by a agent of the Alliance of Automotive Assistance Companies of Massachusetts, called for a tiered approach to rising the charges that would call for acceptance of pending laws.
It proposed an improve of $33 in the bare minimum reimbursement price and annually changes dependent on the client cost index, amid other adjustments.
The report cites federal labor information exhibiting that the average collision mend income in Massachusetts is $47,400, while the once-a-year wage for all industries is $72,940.
Likewise, the common labor charge paid out through insurance corporations is $40 per hour, which lags driving New Hampshire, New York and other neighboring states.
Alliance of Automotive Assistance Companies of Massachusetts issued a scathing assertion alongside with the report criticizing insurers for opposing the adjustments and “failing to give feasible alternatives or solutions.”
“It is obvious that, as far as they are concerned, they are fairly content with a method that artificially suppresses the labor amount reimbursement total in a manner that can greatest increase their income though trying to keep overhead prices as minimal as feasible,” the group wrote. “Unfortunately, all those who function automobile overall body mend facilities do not have that luxury of suppressing other value components in their organizations in order to ensure huge earnings margins.”
Proposed laws presented by the Massachusetts Condition Auto Dealers Affiliation, which was also amid the recommendations, would authorize the point out Division of Insurance plan to create minimum auto overall body labor premiums.
In 2008, the condition Division of Insurance policies rolled back again rules that experienced set labor prices for automobile entire body retailers since the late-1980s right after deciding that there was ample levels of competition in the auto insurance policies marketplace. The shift effectively authorized vehicle insurance plan corporations to set their possess labor prices.
But the commission’s report pointed out that individuals prices have remained mainly unchanged in the previous 14 years, and have not held pace with increases in very similar industries.
The report uncovered that the quantity of car entire body outlets functioning in Massachusetts has declined by 6.5% given that 2018, when they were being about 1,800 stores statewide. As of 2020 they have been 1,686 car stores.
Meanwhile, vocational educational institutions have viewed a drop in enrollment in vehicle overall body restore packages with pupils picking other trades, the report’s authors pointed out.
“There has been a steady concern about the automobile system industry’s workforce, especially for collision repair service technicians,” the report’s authors wrote. “This sentiment has been repeated by auto body store owners, dealerships, and vocational school representatives.”
Panelist Evangelos “Lucky” Papageorg, government director of the Massachusetts Alliance of Automotive Assistance Companies, claimed the suggestions, if carried out, will institute a “reimbursement amount which reflects the skills, expense and liability involved with collision repairs carried out in Massachusetts.”
The panel’s report has been sent to the Residence Techniques and Suggests Committee for consideration.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and web sites. Email him at [email protected].