Monday, October 5, 2009

Get 3 estimates - how silly!

The Woodstock Police Department responded to my FOIA request about the September 25th crash of one of its police cars on the Walmart parking lot, and on Saturday I received copies of the Crash Report and repair estimates from three body shops.

How long has the "three estimates" rule been around? Back in the early 1960s, I investigated accident reports for an independent insurance claims adjuster in St. Louis. The "rule" was around then. Do you have to follow it? "It depends."

In 1977, when my then almost-new 1976 Buick Regal got dinged in a Denver parking garage, the insurance company for the parking garage told me to get three estimates, and I laughed at them. I told them the car was new and that I intended to have it repaired by Deane Buick, where I had purchased it. If they wanted three estimates, they could send two repair shops to Deane Buick to look at the car. They didn't.

The Woodstock Police Department (the City) actually ended up with four repair estimates for Police Department Car No. 27. Three local body shops bid on the repair job. One of them submitted two estimates - one estimate with presumably Ford replacement parts and a second estimate with "re-manufactured" parts. Anyone half-familiar with the horror stories about parts that are supposed to fit (but sometimes don't) will probably not want those used on his car.

So, what was the difference in bids?

A $3,001.72
B $3,394.57 ($2,734.12)
C $1,893.57

The second estimate of Body Shop B uses remanufactured parts. Several parts on the estimate from Body Shop C were listed as "Economy" parts. This will have some meaning to the shop itself, but what will it mean to the Owner of the car, the City of Woodstock?

Do you automatically throw out the lowest bid, when it is so much lower? Or do you take it and wonder why two other shops were so much higher?

Just how much time and effort can be put in by the City to "analyze" bids for $3,000 worth of repair work? Should (or does) the City have a policy about use of "Economy" or remanufactured parts on police vehicles? Perhaps based on the age and mileage of the car? The damaged car is a 2007 Ford Crown Victoria. I couldn't spot the vehicle's mileage on the Crash Report form; apparently, the State doesn't consider mileage a reportable factor. It should.

A 2007 Crown Vic will probably be kept around for a while, and the City should use Ford parts on the repairs. As vehicles age and approach replacement, then use remanufactured parts.

A $3,000 repair is minor, all things considered. The impact apparently did not trigger the airbag, or that would have added $1,500-2,000 to the repair cost.

By the way, the City must get a big break on labor rates. Body and Finish labor rates were $44-46/hour. Frame labor was $55-70/hour. Compare these rates with the rates on your own repair estimate.

Another approach to repair work, to avoid wasting time of two of the three shops, would be to designate one shop per year to receive the repair work, and then send the insurance company's adjuster to the shop to negotiate the repairs. I wonder what the shop owners would think of such an arrangement.

And, speaking of an insurance company, I was surprised to see an insurance company (Selective Insurance Company of the Southeast) listed as the Police Department's insuror. I would have thought that the City would self-insure small claims (no dollar amount was given for the estimate damage cost for the Walmart light support). Maybe it does, and the insurance company is reported only because it might be involved in larger claims.

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