Collision Repair | Insurance | Repair Operations
In answer to a consumer complaint, Montana’s deputy insurance commissioner has told Liberty Mutual its settlement of a claim isn’t sufficient and that simply stating a referenced blend study as “unverified” without evidence to back it up is unacceptable.
Liberty Mutual denied payment for the amount charged by the repair facility to blend the vehicle in question, citing the 50% blend time as “successful” and “well-established.”
“While we appreciate that Liberty Mutual has issued numerous payments on this claim, that does not justify it from paying for all costs of covered repairs that are reasonable and objectively supported by evidence,” wrote Deputy Insurance Commissioner Frank G. Cote in an Aug. 6 letter to Liberty Mutual.
The blend study in question was done in 2022 by the Society of Collision Repair Specialists (SCRS) in coordination with AkzoNobel Vehicle Refinishes, Axalta Coating Systems, BASF Automotive Refinish, PPG Industries, and Sherwin-Williams Automotive Finishes. The purpose was to study the comparative difference between the time necessary to perform a full refinish on an exterior panel and the time needed to blend the same panel.
The study concluded blending took 31.59% more time on average than a full refinish based on results from refinish operations compared on 45 different parts with three colors from the five paint and coatings companies. The results were a stark contrast to the 50% less time historically allocated in the three estimating systems.
“The insurance company was denying procedures to properly repair the car,” said Chuck Lipes, Capital Collision senior collision consultant.
He added that insurance companies across the board have done the same when it comes to blending and materials invoices.
“Liberty Mutual is notorious for putting repair refinish operations in the repair column which don’t generate any materials [costs] and then in a paint material invoice, they want to use the calculator.”
Capital Collision filed the complaint with the Commissioner of Securities and Insurance Office on behalf of their customer who had to pay the difference out-of-pocket to pick up her vehicle.
“I was able to show them and prove to them that the blend study is, in fact, legitimate and the fact that they’re cutting the refinished times in half with no basis was the manipulation of our database,” Lipes said. “Montana Code 33-18-224 specifically states that an insurance company cannot unilaterally disregard a repair operation or cost identified by the database we use.”
In April 2023 MOTOR announced “a change to the Estimated Worktime Development Methodology for color blend of adjacent panels within the MOTOR Guide to Estimating (GTE) to account for variations in modern vehicle paint refinishing.
In October, MOTOR removed the previous blend percentages in its GTE as a result of its research, spurred by industry feedback through a large number of database inquiries received, which followed the release of the SCRS blend study results. CCC One now provides solutions in line with MOTOR’s revision for color blend of adjacent panels as a judgment in lieu of the previous fixed calculation for panel blend.
“If Liberty Mutual is going to claim that it is ‘successful with shops accepting 50% blend times’ and ‘this time is well established, and their blend study is unverified,’ it may not simply do so without providing sufficient, supporting documentation,” Cote wrote. “Liberty Mutual’s opinions will not be deemed credible without current verified studies and supporting documentation, whether in this case or any other case.”
Cote also quoted the new GTE language and a screenshot from CCC One: “Estimated refinish times for color blending should defer to the judgment of an estimator or appraiser following an on-the-spot evaluation of the specific vehicle and refinish requirements in question.”
“Without an on-the-spot evaluation, logic would dictate that Liberty Mutual’s position would be without factual data and, therefore, insufficient to make a correct determination,” the letter claimed.
“If Liberty Mutual conducted an on-the-spot evaluation of [redacted]’s vehicle as required by the GTE estimating system, please provide that information,” Cote said. “If Liberty Mutual did not conduct an on-the-spot evaluation of the claimant’s vehicle to determine refinish time, please make immediate payment as requested by Capital Collision on behalf of the claimant.”
Liberty Mutual had additionally claimed, “The paint material invoice includes refinish materials for full refinish on the blended panels which we did not allow at the amount the shop requested.”
“It also includes inflated pricing for individual items when compared to other vendors. The material invoice generated using EAGLE is not an actual invoice from the shop’s vendor. We allowed reasonable dollars for the materials requested.”
Cote responded that those claims aren’t supported by facts or data provided by the insurance company.
Comparing the invoice provided by Capital Collision to a referenced price sheet from National Coatings and Supply, the department found that the listed products pricing was “the same, in some cases lower, and in some cases marginally higher.”
“I do not see ‘inflated pricing’ as you allege,” Cote wrote. “This is a very serious matter when you represent to the Insurance Department as fact something which is not factual.”
The insurance company had also denied payment for aiming the headlamps after reinstallation following refinish, which is an often-recommended OEM repair procedure and is supported by I-CAR.
Liberty Mutual responded to Cote’s letter with a $340.13 reimbursement to the claimant.
“I think it’s going to be a huge win in the whole country for any consumer,” Lipes said.
Capital Collision owner Ashley Kovick added, “It’s definitely a huge win for the consumers of Montana.”
The shop has filed at least 10 other complaints with the commissioner on behalf of its customers that are being reviewed.
“We have had similar complaints regarding various insurers not paying for the full cost of auto repairs,” Cote told Repairer Driven News. “When a complaint is researched, we may find there are a variety of items which were not fully covered — mixed in those items might be the issue upon which the paint blending study touches.
“Since our job is to regulate insurers and protect Montana consumers, we will be reviewing these types of complaints to make sure we are being consistent in our response to these types of complaints, and that Montana consumers are being treated fairly, according to their policy and Montana law.”
Liberty Mutual didn’t respond by the publication deadline to questions from RDN.
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