The new Select Service program will be introduced in several states and three Canadian provinces (Alberta, New Brunswick and Ontario) beginning in the third quarter of 2006, and will be extended to all states in 2007. State Farm says that, as with its current repair programs, customers will have freedom of choice when selecting a repair facility.
Changes were made to the program for companywide implementation based on feedback received and the results of the test. "We listened to the feedback provided by the repair industry," said State Farm claim consultant George Avery. "As a result, we've made changes to the Select Service program."
Through the new agreement with participating repair facilities, State Farm will extend what it considers a higher level of vehicle repair service to more State Farm customers. Customers will receive services including national limited lifetime repair warranties, guaranteed completion dates, wash and vacuum of repaired vehicles, and pick-up and delivery service.
Repairers will have an opportunity to review the new agreement and apply to participate. Repairers, large and small, best suited to meet the "repair value and business needs of State Farm customers will be selected to participate," says the giant insurer.
State Farm says it intends to "maintain quality relationships" with repair facilities while continuing to provide the highest level of claim service to its customers.
State Farm says that the Select Service program enhances the insurer's ability to provide customers with efficient, quality repairs and excellent customer service at competitive prices. "The overall changes to the program will allow State Farm to continue to help customers recover from the unexpected while supporting our business direction of a performance-based repair program," said Avery.
Changes to the State Farm program
Since the pilot program was rolled out in select areas earlier this year, several changes have been made. Among them:
• If a collision repairer has multiple locations within the same market, it must give State Farm the lowest rate offered to an insurer at any of its shops in that market.
• State Farm may require shops to purchase reporting services from an independent vendor selected by State Farm so that it can more easily compare the performance of different shops in the same area.
• Shops will guarantee completion dates and if the date is missed, will have to pay for the customer's rental car.
• State Farm may select a parts vendor if it so chooses.
Demands best service, lowest price
There are two major requirements that haven't changed since the pilot program began: That State Farm receive the lowest prices offered to any insurer, and that its customers get first priority.
At the CIC meeting in Portland, Oregon, Avery said State Farm writes more than twice as many estimates as the second largest insurer, and therefore feels it should be entitled to any discounts shops may offer to other insurers. A fax survey of pilot-program participants, taken in June by www.collisionweek.com, indicated that 41% of the surveyed shops had lowered their rates to State Farm because of the new rules. At the same time, only 18 percent said their State Farm volume increased under the new program.
As to first priority for State Farm customers, this is the contractual requirement that has large DRP shops most concerned - how do they accommodate the 600-pound gorilla named State Farm without showing disrespect for their other insurance customers?
Of shops participating in the pilot program and answering the collisionweek.com survey, optimism about the program's positive future effect on their business is split. Just 12.5 percent thought it will be better, fully 43.8 percent now operating under the new rules thought the program will not be better for their business. An equal amount were undecided.