There was a good article recently in the Patriot Ledger (to read click HERE) about body shops and insurers battling it out in Massachusetts over a labor rate bill recently added to the State Senate's budget proposal for the coming fiscal year.
The bill would create a new system of determining labor rates. Currently, rates are determined through negotiations between shops and insurers. The new system would have a commission comprised of insurers and repairers, as well as state officials, who would oversee a set of rates tied to a national average labor rate. The state's current average hourly rate is $34.55, compared to the national average of $42.45.
As usual, insurers are saying the rate increases will result in higher-priced premiums for consumers, but repairers are arguing that with record profits of late, the insurers should be able to absorb that without passing it on to consumers. The fact of the matter is that an increase in labor rates is long overdue, it should happen and insurers can indeed absorb the cost.