'Who Pays?': Shops have mixed experiences with insurer aluminum rate consistency
The latest “Who Will pay for What?” survey found about half the body shops polled reporting that eight major insurers reimburse invoiced aluminum labor rates always or more often than not.
The percentages of shops seeing that consistency fell slightly from 2021, though it’s unclear if these declines were inside the margin of error.
Nationwide and USAA were the most attentive to reimbursing the work, with a respective 54 and 53.Five percent of retailers reporting the aluminum rates were covered “always” or “more often than not.”
Farmers was the least likely to reimburse aluminum rates with that consistency, but nonetheless saw up to 50 % the businesses reporting the carrier frequently or always paid those labor rates. Farmers also had the greatest percentage of shops reporting reimbursement “sometimes.”
The number of vehicles with aluminum elements and also the prevalence of aluminum on those vehicles is likely to increase. If the insurer won’t cover the bill, more and more policyholders might have to achieve this.
The Oct. 1-Oct. 31, 2021, “Who Pays?” polling found 82 percent of body shops had already performed aluminum work last year. A study by DuckerFrontier for the Aluminum Association estimated automakers will incorporate 514 pounds of aluminum in to the average vehicle by 2026, a 12 percent increase from 2021.
By 2026, it will likely be nearly sure that a hood is aluminum, and close to even money that a liftgate or tailgate will be, DuckerFrontier reported in the study released last summer. There’s in regards to a 1-in-3 chance that any fender or door on the new-car dealership lot is going to be aluminum. DuckerFrontier also last summer estimated vehicles are displaying greater percentages of nonferrous chassis and crash management parts than the usual few years ago.
However, insurers and consumers appear to be catching a break on a handful of billing fronts as that aluminum penetration increases.
Data from the study suggests aluminum rates may have found equilibrium, a minimum of among uncertified shops.
Shops performing aluminum work on vehicles without being certified with that OEM reported a median structural aluminum rate of $89 and a median nonstructural rate of $75. The 75th percentile for uncertified aluminum work stood at $120 and $100, respectively.
“The median rates have remained fairly stable over the past many years following a run-up between 2021-2021 from $83 to $90 for structural aluminum repairs and from $63 to $77 for non-structural aluminum repairs,” survey authors Collision Advice and CRASH Network wrote.
Forty-five percent of shops “report being certified by at least one OEM for aluminum repair,” Collision Advice and Crash Network wrote. Probably the most prevalent OEM among the certified shops was Ford, with 131 Ford-certified shops sharing aluminum rates. The second most common OEM was Infiniti, at 47 shops.
The median Ford-certified shop charged $95 for structural Ford aluminum work and $85 for nonstructural aluminum labor in 2021. That 50th percentile value represents the point where 50 percent of the shops charge more and 50 percent charge less. The 75th percentile of Ford-certified shops charged $125 for structural work and $100 for nonstructural work — which means A quarter of all of the collision repairers still charged more than those guys.
Polling in 2021 found an average Ford structural aluminum rate of $90 along with a nonstructural rate of $75 among Ford-certified shops. In 2021, the median Ford structural rate remained at $90 and the nonstructural rate $80.
Another question asked all shops performing aluminum labor when they charged aluminum rates for structural work, removal and installation of nonstructural parts and refinishing.
“The proportion of shops charging better pay for refinishing aluminum, in addition to replacing components on aluminum panels, has leveled off after four years of continuous decline,” Collision Advice and CRASH Network wrote.
The percentage of shops charging aluminum rates for structural work is down from the peak of 93.9 % in 2021 but nonetheless a massive proportion and in that ballpark: 87.4 percent both in 2021 and 2021.
However, aluminum rates for refinishing and nonstructural R&I rates have diminished in popularity, with simply in regards to a fifth of retailers charging them in 2021 and 2021. That’s down from that which was an optimum of around 48 percent of retailers charging aluminum refinish and nonstructural R&I rates in 2021.
But as Collision Advice and CRASH Network pointed out, the decline have leveled off. It’ll be interesting to see if the 2021 data will contribute the third data indicate confirm the industry truly has settled into an 80-20 trend here.
Help the collision industry if you take the present “Who Will pay for What?” survey by the end of the month and answering questions on topics like refinishing. All answers are kept confidential; information is published only within the aggregate.