April 26, 2022—A report released by the Legislature's Commission on Auto Body Labor Rates in Massachusetts calls on Beacon Hill to increase how much private insurers pay for repairs in order to help support auto body shops.
According to The Salem News, the 13-member panel includes lawmakers, auto body repair shop owners, insurance industry representatives and car dealers. It was established in 2021.
The panel adopted the aforementioned report by a vote of 10-3. Three representatives from the insurance industry voted unfavorably.
The Alliance of Automotive Service Providers of Massachusetts offered a recommendation towards solution that would involve a tiered approach to raising rates. It suggested an increase of $33 for the minimum reimbursement rate and yearly adjustments based upon the consumer price index.
Proposed legislation by the Massachusetts Automobile Dealers Association was also among the recommendations, and would aim to authorize the state Division of Insurance to establish the minimum for industry labor rates.
The commission's report found that, although the Division of Insurance rolled back on regulations in 2008 and ultimately allowed auto insurance companies to set their own labor rates, these rates have been unchanged for the most part over the last 14 years.
This is worth viewing in the context of overall body shop numbers in the state, which have declined 6.5 percent since 2018. Vocational schools in Massachusetts have also experienced a drop in auto body repair programs.
“There has been a continuous concern about the auto body industry’s workforce, especially for collision repair technicians,” the report’s authors wrote, according to The Salem News. “This sentiment has been repeated by auto body shop owners, dealerships, and vocational school representatives.”
The report has been sent to the Massachusetts House Ways of Means committee for further consideration.
