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Letter to the Editor

Allstate Survey Shows Californians Fed Up With Auto Repair Fraud

Poor quality work, cheating, and inflated pricing in auto body repair shops are big concerns among California consumers, according to a recent poll conducted by COMsciences, Inc. for Allstate Insurance Company.

Californians overwhelmingly support increased competition in auto repair as a way to stem widespread fraud, increase the quality of work, and lower prices.

Fully 85 percent of those polled believe that cheating is a major reason repair costs are so high in the state. In fact, an overwhelming majority (74 percent) feel they are often cheated by auto body repair shops that do poor quality work or charge for work that was never even done. Ninety percent said consumers should have more choices in where to bring their car for bodywork, including shops owned or associated with insurance companies. Eighty-seven percent believe that the insurance industry should play a leadership role in combating industry fraud.

"Allstate sees these numbers as a call to action. For Allstate, this leadership means playing a more direct, hands on role in the auto repair process," said Allstate Insurance Company Field Vice President for California Hank Barge.

The survey's statistics appear to show that California consumers agree. According to the survey, 87 percent of Californians feel that insurance company owned repair shops, which are now available in other states, should be available to California motorists.

Sterling, the Allstate-owned collision facility consolidator, is proposing to invest tens of millions of dollars in California to build as many as 20 of its Sterling Autobody Repair Centers around the state.

"The Allstate-Sterling relationship is an innovative, consumer driven partnership enabling the insurer and body shop to work in unison for the benefit of the consumer. Together, Allstate and Sterling will eliminate the redundancies and fraud that exist in today's auto collision repair process. Customers are the beneficiaries of a coordinated repair process with a dual focus on their needs. The result of this partnership is a superior, more cost effective, and quality customer experience," Barge said.

How bad is fraud in California? The California Bureau of Automotive Repair says there is a 43 percent incidence of fraud in California automotive repairs. An Allstate press release indicates puzzlement that a bill currently before the California State Legislature seeks to ban insurance companies like Allstate from owning auto body shops in California.

"Senate Bill 1648 will deny California consumers the option of an additional, reliable, less expensive, and superior repair option. The bill is anti-consumer, anti-business, and perpetuates the existing fraud in the state's auto repair industry. California consumers should stand strong and voice their opposition to this measure." Barge said.

Allstate says that Californians agree. Survey results show the majority (60 percent) of those surveyed are opposed to legislation preventing insurance companies from owning auto body repair facilities.

COMsciences polled a representative cross-section of Californians over the age of 18. About a third of the respondents were Hispanic, and approximately half were women. Almost half the survey sample (46 percent) report having been a driver involved in an auto accident. The survey had an error margin of ±3.1 percent.

Allstate Non-Insurance Holdings, Inc., a subsidiary of The Allstate Corporation, acquired Sterling Collision Centers, Inc. in May 2001. Sterling Collision Centers, Inc. operates a network of more than 40 Sterling Autobody Centers in seven states and eight metropolitan markets.

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