AASP/MA Pushes For Labor Rate Reform
July 15, 2021—The Alliance of Automotive Service Providers of Massachusetts is pushing for a bill that would require insurers to reimburse labor rates adjusted for inflation, according to a press release.
“In order to keep pace with rising costs, shops are needing to start charging the consumer for the shortages that aren’t being paid for by the insurance company. That’s wrong,” AASP/MA Executive Director Evangelos “Lucky” Papageorg said in a statement. “The insurance company is selling an indemnification policy that is supposed to be making the person whole again. The customer shouldn’t be put into the predicament of having to come up with money after they’ve already paid for their insurance policy.”
The bill seeks to set a minimum reimbursement rate for auto body labor paid by insurers to Massachusetts claimants. The legislation aims to increase the average auto repair consumer reimbursement rate in Massachusetts based on the increase in the Consumer Price Index (CPI) between 1988 and the present. Insurers would be allowed a two-year adjustment period to increase their consumer reimbursement rate to the appropriate amount, which is currently estimated to be approximately $68 an hour versus the current average rate of approximately $40 an hour.