Auto body industry says it’s not to blame for ICBC’s ‘financial dumpster fire’

Click to play video: 'Body shops strike back at ICBC over deficit' Body shops strike back at ICBC over deficit
WATCH: B.C.'s body shops say they're not to blame for ICBC's $1.3 million deficit. But they say they can be part of the solution. John Hua reports – Feb 1, 2018

Days after B.C. Attorney General David Eby referred to the Insurance Corporation of B.C. (ICBC) as a “financial dumpster fire,” an association representing the auto body industry says they are not part of the problem.

Ken McCormack, president of the Automotive Retailers Association, said comments in the media about repair shops overcharging are unfairly demonizing the industry.

“We’re about as lean as we possibly can [be], and the profit margins for shops are, quite frankly, so low as to be unsustainable if things don’t change,” he said. coverage of ICBC

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The comments came after Eby said payments to auto body shops for repairs have gone up 30 per cent in the last two years.

Eby said the province will make a decision soon on whether to cap what auto body shops can charge.

McCormack attributes any increase to the fact that drivers are buying more expensive vehicles and auto parts have gotten pricier.

“The government that suggested they wouldn’t be surprised if body shops were overbilling and some other comments. We don’t want the public to have the impression that body shops are part of the problem.”

READ MORE: How do you solve a problem like ICBC?

McCormack is calling on ICBC to make it easier for repair shops to purchase “like new” used parts, which could save millions of dollars each year.

“We’re led to understand that a lot of those vehicles are being put in containers and shipped out of province,” he said. “So we’re just not getting access to the parts.”

In 2016, ICBC made $74 million selling salvage. Savings from using more used parts will likely have less of a financial impact.

“In the overall book of a repair it’s not going to save a bundle,” Wade Bartok, owner of North Vancouver’s CSN Collision Centre, said.

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McCormack sees no problem with the current system that allows auto body shops to write their own estimates and send them to ICBC for approval, saying the insurer can do audits at any time.

When asked if audits are happening at the rate they used to, he answered, “I can’t say that they necessarily are.”

READ MORE: ICBC chair: ‘Good drivers should pay less and bad drivers should pay a heck of a lot more’

Annette Toth of MoveUP Union, which represents ICBC employees, says “a system has been created that allows for overbilling.”

Toth said most estimates are missed because after two hours body shops can proceed without ICBC approval.

She even alleges that when overbilling is caught after a job is complete, it’s often overlooked.

“They say, ‘This an unreasonable amount and we shouldn’t be paying it’ and the managers generally override them and pay the bill.”

A government-ordered review of ICBC by Pricewaterhouse Coopers does include a look at how auto body repair is done.

— With files from Jordan Armstrong and John Hua

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