As a resident of Washington, D.C., I have received water bills warning me not to drink the water. (If certain politicians came with similar warnings, we’d be better off.) When the water bill arrived saying it was safe to drink again, I wondered how recent and accurate the information was.
The news on the national scene doesn’t give me confidence either:
Six miners in Utah go off to work one day and never come home.
A bridge collapses in Minneapolis (after repeated warnings about how unsafe it was).
The air at Ground Zero during the cleanup after September 11 was toxic after all. And the U.S. government knew it at the time.
And don’t get me started on the Iraqi war or the “reasons” (i.e. lies) the .U.S. began it in the first place.
Trust insurance carriers?
For the most part, Americans trust their insurance companies. But should they? And should owners of body shops?
Take Allstate’s recent decision to turn over background checks of its PRO shops to an outside company. Why should collision repairers believe their information will remain confidential, especially given the traditional animosity between repairers and insurers?
Am I paranoid? If so, I’m not alone.
“The [Allstate] form is becoming more and more intrusive,” said an East Coast shop owner. While the shop owner doesn’t mind complying with some guidelines, including providing proof of insurance, she balks at some of what she sees as the more invasive requirements. “To demand that I or my shop foreman fork over $50 to run a background check on him – it bothers me as an employer that one should be allowed to do that.”
Says the shop owner: “If they want information from me, I have every right to ask information from them.”
The outside company providing background checks for Allstate, Acxiom Information Security Services, requires the shop owner to sign a document freeing Acxiom from responsibility in “any and all claims, losses, and damages arising out of liability or failure of the Vendor to keep and perform any of its obligations as mandated by the Fair Credit Reporting Act/state employment laws and all other pertinent laws.”
In signing, the shop owner also frees Allstate from responsibility.
Acxiom requires shops to file information over the Internet. When the East Coast shop owner asked to fill out the forms manually and mail them with a check, she was told no.
I cannot help but be suspicious of what will be done with that information. Trust an insurer or its hired partner to keep information safe? Go ahead – drink that water. But if you wind up with a stomach ache, you’ll know why.
Liberty Mutual, another giant insurer, is demanding to see invoices of repairers’ purchases for parts. Some shops are refusing to show any invoices at all. Some show invoices but only reveal list prices. Some show whatever the insurer wants. Liberty Mutual clearly doesn’t trust repairers.
So why should repairers trust Liberty Mutual?
Double duty: Insurer – and a bank
Here’s a new item from State Farm, the largest automotive insurer in the U.S. State Farm is a bank, too, thanks to laws that permit insurers to become financial juggernauts. USAA, Allstate, and State Farm all have banks.
USAA has had credit cards for a number of years, but State Farm’s credit card offers something different: Charge parts on it, pay the bill when it comes in (or pay installments), and receive a 1% credit on the next bill on the amount paid.
A repairer who tested the credit card called it a win-win-win situation. On parts orders, he has a month lead time, before he must pay the credit card bill. In the meantime, he can use the money as he sees fit. .
State Farm’s bank wins as it collects the service fee from the merchant who accepts the credit card.
If the parts department is paid with a credit card, it won’t face the problem of delinquency or slow pay. The repairer can pay the bill on time on his credit card. In this respect, it’s a “win” for the parts department.
But wait: If body shops are using State Farm credit cards, the insurer will have a detailed report on the shops’ purchasing habits.
Raise your hand if you think State Farm will do nothing with this information.
Now raise your hand if you think it will use it to its advantage (at the expense of shops, if necessary).
I’d sooner drink a glass of D.C. tap water.
Sheila Loftus (sheilaloftus@ yahoo.com), publisher of the CRASH Network, has written about the auto collision repair industry for 32 years. She lives in Washington, D.C.