February 12, 2021 by Greg Meckbach
The COVID-19 pandemic has created some barriers to repairing vehicle and property damage – including a shortage of auto body parts, and a labour shortage impacted by Canada Emergency Response Benefit (CERB) recipients who are reluctant to return to work, panelists said Wednesday during CatIQ Connect’s February webinar.
The COVID-19 pandemic had made it more difficult than normal to get larger vehicle parts such as roofs, said Darilyn Dorosz, co-founder and general manager of Calgary-based PDR Hail Team Inc., which specializes in repairing vehicles damaged by hail.
During a panel titled The Impacts of the Supply Chain on the Insurance Industry, Dorosz told CatIQ Connect what it was like dealing with the aftermath of the record June 13, 2020 Alberta hail storm.
In previous years, if there was a delay in getting a vehicle part, it was usually something like a shipping delay, suggested Dorosz. But this past June it was difficult sometimes to find replacement roofs.
“This year, the parts were not even in stock. [The manufacturers] had not even made them yet. So we could not even get [anticipated delivery] dates. It was, ‘Well, we will let you know when we know,’ so it was more of an effort of managing expectations of the customer and letting them know we are doing everything we can but we are kind of at the mercy of the [auto] manufacturers.”
The June 13, 2020 hail storm cost the industry about $1.2 billion, making it Canada’s fourth most-expensive insured catastrophe, Catastrophe Indices and Quantification Inc. reported this past July. Hail the size of tennis balls caused major damage to tens of thousands of buildings and properties, mainly in northeastern Calgary.
The damage was so severe and extensive that some client’s cars were no longer drivable, and there was reportedly a shortage of rental cars, said Barry Haggis, president-elect of the Insurance Brokers Association of Alberta, in an earlier interview with Canadian Underwriter.
The Insurance Bureau of Canada heard that some vehicles were total losses, Rob De Pruis, IBC’s director of consumer and industry relations, western, told Canadian Underwriter shortly after the disaster.
PDR Hail Team was able to open a 40,000-square-foot vehicle damage appraisal facility within a week of the June 13 storm, Dorosz said Thursday during CatIQ Connect.
Dorosz suggested that an increase in 2020 of commercial real estate vacancy rates in Calgary made it easier for her firm to secure space than it otherwise would have been.
“One of the challenges we experienced this year was a shortage of labour,” reported Dorosz. “People who would typically fill more entry-level positions in our company – such as administration, drivers, and detailers – were taking advantage of the [Canada Emergency Response Benefit] and were reluctant to join the work force.
CERB, introduced in 2020 after COVID-19 was declared a pandemic, gives financial support to employed and self-employed Canadians who are directly affected by COVID-19. With CERB, the government pays up to $500 a week. It is intended for people who have stopped working because of reasons related to COVID-19, are eligible for employment insurance, or exhausted certain benefits between Dec. 29, 2019, and Oct. 3, 2020.
“Our body shop partners shared a similar experience” of a labour shortage during COVID-19, Dorosz said Thursday.
After the June 13 Alberta hail storm, Dorosz tried to secure body shops to handle the large amount of repairs needed. She found that several body shops in the Calgary area were closed down because of the pandemic and a downturn in business.
“It took weeks or months for some of the body shops to get staffed up to pre-pandemic levels to handle the volume from this intense hail storm,” said Dorosz.
Also on Thursday’s CatIQ supply chain panel at was Ian McKay, assistant vice president of national accounts and insurance company solutions at Verisk.
McKay suggested he heard from some restoration contractors that in Ontario, some roofing tradespeople were being paid cash to encourage them to work.
“Labour was certainly a big issue from COVID-19,” said McKay. “Specifically, you may have had some people who were collecting the CERB payment, for example, and not wanting to take on some of this traditional labour.”