When most Massachusetts drivers drop their car off after an accident, they assume it will be repaired safely, correctly and to manufacturer standards. What many don’t realize is that behind the scenes, outdated insurance reimbursement practices are quietly undermining that expectation, and with real consequences for public safety.
A newly released report from the commonwealth’s Auto Body Labor Rate Advisory Board makes this very clear: The problem is not what auto body shops charge. It’s what insurance companies are willing to reimburse. And when reimbursement rates fall far below the real cost of modern, safe repairs, the effects show up on our roads.
Today’s vehicles are vastly more complex than ever. Advanced driver-assistance systems, electric vehicles and new lightweight materials require specialized tools and ongoing technician training. These are not optional upgrades. It’s essential to ensuring that a vehicle performs as designed in the next crash. Yet insurers in Massachusetts reimburse a weighted average of about $49 per hour for collision repair labor, a rate that has barely moved in decades, despite dramatic increases in operating costs.
The result is a growing strain on the collision repair ecosystem. Shops struggle to invest in training and equipment. Experienced technicians leave the state or the industry altogether for higher-paying trades. Young people are increasingly opting out of collision repair careers. Industry projections show that 109,000 new collision repair professionals will be needed nationwide over the next decade. Body shop owners nationwide are asking a simple question: Where will they come from?
Concurrently, Massachusetts has lost more than 100 registered auto body shops since 2008. With many owners nearing retirement age, there is often no viable succession plan under the current conditions. Fewer shops mean longer wait times, fewer choices for consumers and more pressure on the system – all while vehicles themselves become more technically demanding to repair.
Some worry that fairer insurance reimbursement would lead to higher premiums. The advisory board report did not reach that conclusion. In fact, it found no evidentiary basis to claim that updating reimbursement rates would trigger major insurance increases. It did find that failing to align reimbursement with economic reality risks compromises repair quality and public safety.
There’s also a persistent misconception that insurers set auto body labor rates. They don’t. Like doctors or other skilled professionals, repair facilities set rates based on what it takes to operate safely and correctly. Insurers then decide how much they will reimburse. When that reimbursement falls short, consumers are often left paying out of pocket – or unknowingly accepting repairs that may not meet manufacturer standards.
This is not a dispute between shops and insurers. It’s a public safety issue that affects every driver, passenger, cyclist and pedestrian who shares Massachusetts roads.
If we want vehicles repaired properly, a skilled workforce to do that work and safer roads for everyone, insurance reimbursement practices must reflect the realities of modern vehicle repair. The current system makes it extremely difficult – some might say impossible – to stay current with today’s technology and equipment and train technicians to original equipment manufacturer specs. That has far too dramatic of an impact on safe repairs, putting everyone on the road at risk.
Evangelos “Lucky” Papageorg is the executive director of the Massachusetts Auto Body Association.
Opinion/Guest column: Insurers in low gear for auto body repairs
