Allstate has rescinded a ban on payment for color sand and buff procedures issued earlier this year in Hawaii, saying the edict rejecting reimbursement was issued in error. Several Aloha State body shop owners – plus their high-end clientele – mobilized to rebuff the no-buff policy, citing potentially faulty finishes and diminished-value contractual concerns over failing to restore a car to its pre-crash condition.

“A few of our customers have called the insurance company and helped us voice our opinion,” reports Dale Matsumo, general manager at Auto Body Hawaii in Kailua Kona on the Big Island.

“The color sand and buff is to knock out that ‘orange peel’ look to get the finish the way it should be. ‘De-nib’ is the more appropriate term for what color sand and buff is about. Because the industry moves so slow (at adopting changes in techniques), color sand and buff is still the normal term for so-called de-nibbing.”

The paint, polish and texture issue has been stirring nationwide for a while, and there were suspicions that the insurer sought to implement a similar color sand and buff ban throughout the United States.

Not so, according to Allstate. “We have not changed our color sand and buff policies,” says Mike Siemienas, a company spokesperson. “The information contained in the letter (issued to the Hawaiian shops) was incorrect.”

Payment for color sand and buff will be made “when it’s needed,” he explains. “Each claim is reviewed on an individual basis.”

In a March memo sent to Hawaiian participants in Allstate’s direct repair program (DRP), a company claims official decreed: “Some of you have been adding time to color sand and buff on certain high-end or newer vehicles. Please be advised that effective immediately we will no longer allow for color sand and buff in any situation. I apologize for any inconvenience this may cause you and thank you for your understanding. Should you have any questions or concerns please let me know so that I can pass any of your concerns to our management team.”

The ruling rubbed numerous industry members the wrong way. And, per the memo’s advice, they did indeed move quickly to make certain management understood their concerns.

A confidential email alert issued by a prominent body shop owner urged, “We need to rally with this one!”

The ensuing discussion of possible strategies included issuing a formal letter of complaint from the Auto Body & Painting Association of Hawaii to individual state legislators, the insurance commissioner and tax director.

“Color sand and buff is part of the repair, and they (Allstate adjusters) are flagrantly refusing to fully indemnify the loss of the insured,” a violation of most insurance contracts, according to association members contributing their views to the debate.

They contend the state tax director may be interested due to the possibility of enormous sales tax revenue losses caused by Allstate “breaking the presumed insurance contract with their insured” customers living on the islands.

It also was suggested that paint suppliers and national industry associations be enlisted for additional support – with the belief the memo’s contents were dictated by executives 2,500 miles away on the mainland, and a national rollout of the no-buff payment policy was forthcoming.

Among the proposals presented: “Would the paint side help us by more clearly defining what is color sanding and buffing, and the de-nibbing process and the differences between them; developing objective criteria, explaining why this is a required process and the reasons behind it? This would go a long way to educate those who make such ludicrous policies that go against what is considered an accepted procedure backed by the procedure pages” issued by industry data providers.

“We all know with certain types of repairs and vehicles, there is a legitimate time for sanding and polishing, as with situations where only de-nibbing is required.”

And while discrete planning went on behind the scenes, shop owners freely shared their concerns with a well-heeled customer base; many hold Allstate policies aside from automotive coverage, which presumably the company did not want to lose.

(The median annual household income in Hawaii is an impressive $53,123, considerably higher than the national average of $44, 473. The average home price is $345,506 versus a nationwide average of $173,585.)

A number of shop owners contend color sand and buff is frequently necessary to duplicate the original sheen by eliminating orange peel and other imperfections, especially when expensive, late-model vehicles are involved.

“Something like this (payment ban), especially on a luxury car, is just unreasonable,” says Roland Kuroda, the association’s immediate past-president. “The owner of a luxury car is more sophisticated – and they want the job done right – so I’m sure they’ll support us” in the quest to gain proper payment for this type of work.

“Allstate is saying we should be able to apply paint to the same condition as the factory without color sand and buffing,” Kuroda contends. “I’m saying, and the other shops are saying, how can we do that when we don’t have the same environmental conditions as the factory? The factory has robots; here we have a person called a painter” who applies the finish.

“We don’t have a sterile environment like the factory,” Kuroda continues, noting how his shop, Kuroda Auto Body in Waipahu, routinely repairs sleekly finished nameplates, such as Jaguar, Mercedes and Mustang.

“How do you duplicate that finish? There’s no texture to it,” he explains, pointing out the need to obtain a smooth surface before the car leaves the shop: A customer paying insurance premiums on such a vehicle is likely to insist upon it.

Kuroda is not an Allstate DRP, but his shop has experienced problems getting reimbursed from the insurer. “I’ve run into this situation on a previous repair. I submitted a supplement and Allstate refused to pay it. I don’t do work for Allstate anymore. They’re saying, ‘We’re not going to pay for someone’s dirty booth.’”

Speaking prior to the rescinding of the memo, Kuroda asserted that should a color sand and buff issue again arise with an Allstate-insured client, “The customer will pay the difference or we won’t do the task.” The customer, in turn, can raise the issues of diminished value and pre-accident condition with Allstate. “Is the insured being compensated for the work that’s required” under the policy’s provisions?

“We’ve never had a problem like this with Allstate before,” says Matsumo at Auto Body Hawaii. “There’s some lost revenue there (because) right now we’re eating that cost” of bringing a high-end paint job up to snuff. “We let them (the customers) know that they will get back a quality repair. We’re not going to give up our quality standards just because of an insurance company.

“I don’t think any paint booth is 100 percent dust-free; even OE paint can have rubbish in it” from impurities in the air, and “anytime you get into a repainting situation nibs is what you get – and the customers think there should be no nibs.”

From the insurer’s standpoint, “They’re saying that we’re not cleaning the booth or going through the proper procedures,” a position that Matsumo flatly rejects. “All the repairers try to get it as dust-free as possible, but it’s not 100 percent.”

According to Kuroda, “This is just the tip of the iceberg,” explains Kubota. “This will go on and on,” he says of disagreements over insurance payments. “If it’s not color sand and buffing it will be something else.”