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Monday July 7

Allstate Introduces New Direct Repair Program In Texas to Comply With New Legislation

Allstate Insurance Company has announced plans to introduce a new direct repair program in the state of Texas. The new direct repair program (DRP) is needed to comply with restrictions placed on Allstate by Texas House Bill 1131, which became law June 20th. The bill, prohibiting insurer ownership of collision repair facilities requires Allstate to change its existing relationships with auto body repair shops and provide uniformity between its owned and non-owned auto body repair operations.

“Allstate vigorously opposed this legislation in Texas,” said Allstate Assistant Vice- President John Edelen. “These are changes Allstate is being forced to make in our Texas claim strategy to comply with legislation we continue to view as anti-business and anti-consumer. In order for us to help ensure DRP referrals on identical terms for all facilities, it is necessary to create a new direct repair program in Texas.”

Effective August 1st, 2003, according to an Allstate press release, all existing Allstate direct repair relationships in Texas are being discontinued. Between now and August 1, all current Allstate DRP facilities in Texas are being sent applications to enter Allstate’s new direct repair program. With the application, shop owners and managers will have the opportunity to send updated information to Allstate outlining the current capabilities of their repair facility. This information, along with historical Allstate DRP program performance, current Allstate need in the market, and the geographical location of the repair facility, will be considered in the selection of Allstate’s new DRP facilities.

“Allstate has an obligation to our customers and claimants. We need to ensure our customers and claimants continue to receive high quality repairs in a timely fashion. In order to ensure this customer service and help ensure uniform treatment of each direct repair facility, as required by H.B 1131, Allstate needs to make sure our DRP facilities and capacity are properly dispersed to handle the potential flow of claim traffic,” Edelen said.

Allstate’s expectation is that most existing Allstate DRP facilities in Texas will choose to join and be included in Allstate’s new program.

“Allstate is committed to maintaining strong relationships with our direct repair facilities,” Edelen said. “The DRP relationship is an essential part of Allstate’s long-term claim strategy and we will continue working to make those relationships stronger.”

Edelen says Allstate’s intent is to have the initial phases of the new direct repair program operational before August 1, 2003 to ensure a smooth transition for Allstate customers, claimants, and direct repair program shops.

The Allstate Corporation is the nation’s largest publicly held personal lines insurer.

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