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Letter to the Editor

February 2006 Issue

Who Pays for What?

Results from INSIGHT’s Annual Survey of P-Page Reimbursements

The results for INSIGHT's 2006 "Who Pays For What?" survey, included in the January issue, are in. Unfortunately, the number of surveys returned this year did not top last year. However, there was still plenty of information about which insurer is paying, or not paying, for what.

The data from the returned surveys has been compiled into charts separated by the seven major insurance companies. The charts show payment for 36 of the most common non-included P-page items. How-ever, an overall average of the responses is also included for comparison.

The overall "never pay" percentage for 2006 is 41.9%, down from last year's overall percentage of 43.8%. This breaks the record for the lowest reported "never pay" average from 2002. In 2002, the overall "never pay" average was 42.1%.

The overall percentage for "always pay" this year is 25.7%, up from last year's 23.8%. However, the record breaking 30.3% overall "always pay" percentage, also from 2002, still has not been broken.

The same two insurers are on opposite ends of the spectrum again this year - State Farm, the winner of the Fair Player Award, and Progressive, the recipient of the Penny Pincher Award. State Farm's "always pay" percentage of 48.8% is way above the overall average of 25.7%, and it is also the highest "always pay" percentage ever reported. State Farm's "never pay" percentage, 24.6%, is well below the overall average of 41.9%.

In contrast, Progressive's "always pay" percentage, 13.8%, is below the overall average; and its average "never pay" percentage, 59.1% (the same as last year), is above the overall average. Its "always pay" percentage is lower than all other insurers this year, and its "never pay" percentage is higher.

Additionally, Progressive's average "never pays" percentage of 59.1% is still the highest ever - for any insurer.

Nationwide is the only insurer this year whose "never pay" percentage has gone up. Its "never pay" percentage has gone up from 43.6% in 2005 to 45.6% this year. Also, Nation-wide's "always pay" percentage is slightly down from 20.6% last year to 20.5% in 2006. Surprisingly, Nationwide's CSI score did not suffer as a result.

As is usually the case, the overall "always pay" and "never pay" percentages are directly tied to the insurer's CSI score. As would be expected, State Farm had the highest CSI rating of 90%, and Progressive had the lowest at 38%. However, State Farm's CSI score is down from last year's rating of 93%, and Progressive's is up from the 2005 score of 35%.

Despite the high "never pay" and low "always pay" numbers, Progressive earned the Most Improved Insurer Award this year. Progressive's overall CSI score was 38%, up from 35% in 2005.

Farmers, on the other hand, could earn the Least Improved Insurer Award this year, with a CSI score of 51%. Farmers' CSI score was lower than all other insurers this year with the exception of Progressive. CSI ratings for USAA stayed the same, while GEICO's and Allstate's increased slightly.

The eyes of the industry will definitely be watching State Farm in 2006 after the insurer’s announcement of changes in its repair relationships. (See page 3.) After all these years as Fair Play Award winner, will State Farm suffer from a “Seven Year Itch?”

All participation in INSIGHT's surveys is greatly appreciated. So INSIGHT extends thanks to all of those who took the time to fill out the "Who Pays For What?" survey. o

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