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Letter to the Editor
This article originally appeared in the February 2001 Issue of INSIGHT
Who Pays for What?
State Farm once again receives high marks in INSIGHT's annual survey of P-page reimbursements
The results of INSIGHT’s annual Who Pays for What? Survey, included with the January issue, are in, and the big guy, State Farm, still looks like the big winner. The change last year’s survey clearly indicated from State Farm’s long held policy, "We don’t pay for that - it’s included in your labor rate..." is very much alive in 2001, and has definitely favorably impacted the State Farm - collision repair facility relationship nationwide.
Using the data from returned surveys, we have compiled reported payment frequencies by seven top insurers for 36 of the most common non-included procedure page (P-page) items. Charts are in this issue.
The results for all seven insurers hover around the 50 percent mark for "Never pay." Pretty much, half of P-page items are never paid, about 1/3 are sometimes paid, and about 1/5 are always paid. Why the marked difference in CSI then? As several shop owners commented, the hassle over "sometimes pays" items is not only annoying, but can lengthen repair turnaround time, increase expenses, make customers unhappy, and create an adversarial relationship between shop and insurer.
Shop Satisfaction with Insurers
| 2001 | 2000 | Change | |
| State Farm | 85% | 76% | Up 9% |
| Farmers | 76% | 68% | Up 8% |
| USAA | 64% | 65% | Down 1% |
| Allstate | 62% | 57% | Up 5% |
| GEICO | 56% | 56% | No change |
| Nationwide | 54% | 56% | Down 2% |
| Progressive | 50% | 45% | Up 5% |
| Overall | 64% | 60% | Up 9% |
Trust and cooperation are keys. A shop owner in the Midwest said, "If I tell Farmers or State Farm that something is necessary for a repair, they tell me to do it, because they know I do an honest, quality repair for our mutual customer. This is good sense and good business."
Another shop owner in Texas said, " If insurance company adjusters can’t depend on a shop to give a fair estimate then maybe they should not be doing business with that shop. And if a shop owner has to argue and defend his estimated cost of repair repeatedly with an insurance company customer, then maybe he should get out of a business relationship that is clearly not based on trust."
State Farm has favorable marks because the company has been working to improve relationships with repair facilities. Since 1997, State Farm "Always pays" marks have improved a whopping 52 percent to almost one third of the time. Remarks from shop owners across the U.S. have changed from "State Farm won’t pay anything" to "State Farm works with us on repairs." Only USAA has grown, and just slightly, in the "Always pays" category. The other five are "always" paying less of the time, with Farmers really cutting back, 14 percent since 2000, and ten percent overall compared to 1997 figures.
Progressive, new to the survey last year, trailed other insurers significantly in reported shop satisfaction in 2000. For 2001, Progressive’s marks are still poor, getting the Penny Pincher Award away from GEICO and receiving the lowest CSI rating for the second straight year.
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