IMAGE UNDER ATTACK

“Get out and tell your story. No one wants a bad part on any car, ever. One thing we want to see that may help is transparency from the repair shops to

share their information with the customer and ensure that they received what their insurance paid for.”

— Robert Passmore

marketplace for replacement parts used, without dis- criminatory restrictions on the use of any parts – aftermarket, remanufactured parts, OEM or recycled, or others. We believe it is up to insurers, customers, and repairers to decide what parts are best for a repair.” Passmore believes image is a key issue to consider, and that public awareness is crucial to changing perceptions in the case of recycled parts. “Get out and tell your story,” Passmore encourages. “No one wants a bad part on any car, ever. One thing we want to see that may help is transparency from the repair shops to share their information with the customer and ensure that they received what their insurance paid for.” The way to improve the pub-

lic perception is to be sure the consumer understands the value and safe use of recycled parts through a discussion with the repairer. It might help improve public perceptions, but he believes those conversa- tions about the actual repair with the consumer isn’t happening enough. “The public isn’t familiar with what you do,” Passmore says, “therefore, they auto- matically go to the old junkyard story of auto recy- cling.”

He also sees certification as helpful possible solu- tion. “I didn’t know that ARA Certification existed until now. While we cannot endorse a certification program, I think it can only help for the public and insurance companies alike – but as in everything, transparency is key.” “Ultimately, I see issues like this are often cyclical,”

36 Automotive Recycling | March-April 2015

Passmore notes. “We’ve seen similar controversies in the past, it is important to remember that what has won the day is good information.”

Claims of Hiking Costs

Some of the criticisms being brought against the insurance companies in recent controversies say that they are trying to raise claims costs for profit, and use recycled parts instead of new OEM to increase the profit margin. But that is far from the truth according to Mark Kulda, Vice President of Public Affairs, Insurance Federation of Minnesota (IFM), a state trade association that has been around for 101 years. IFM represents most of auto insurers in the state and their interests, and the interests of the consumer. “The truth is when insurance is cheaper, people buy more of it,” says Kulda. “It is very cost competitive, insurers do whatever they can to lower their rates. For instance, Google is now in the insurance selection quotes business. It will list 10 different quotes, and human nature is to go with lowest cost provider. It’s a commodity.” “What insurance companies hope is that the policyholder might buy more coverage if its cheaper, as protection. Higher limits for more protection mean its better for consumers.” Kulda can’t address the larger national debate on the horizon, but in Minnesota, his organiza- tion has a bone of contention with his state’s OEM mandate. “Clearly they are more expensive then recycled and aftermarket parts. We are paying for it with the consumer’s money, not our

money. There is a 30 percent difference in these parts prices. It is hard to get consumers to understand that because the general public is uneducated on this issue.”

Friends in the Right Places

“At this time, we have no bill in action that will repeal the OEM mandate. But in the next year or so, we will work to do this,” says Kulda. “The leadership in Minnesota House of Representatives is amenable to listening to our side of story. We have other leaders in government now who are a friend to our industry.”

This leads to a larger discussion of how the right leadership helps untangle unfavorable situations. Kulda believes in the success of a Political Action