Monday, 18 July 2011 17:19

Gunder’s Auto Center Alleges State Farm Altered Prevailing Rate Surveys

According to the legal team for Gunder’s Auto Center in their well-known battle with State Farm Insurance, limited documentation surrendered by State Farm in response to a court’s discovery order revealed the results of the insurer’s infamous labor rate survey have been altered.

While the nation’s largest private auto insurer has not provided all the information demanded in the court’s order; the information they did provide is seen by many as the proverbial “smoking gun” and a strong indicator of an even more pervasive nationwide practice.

In review of surrendered documents it was found that response to State Farm’s labor rate survey submitted by Gunder’s Auto Center, along with other local competitors, had been altered by State Farm’s Estimatics Team Manager, Robert “Bob” Davis in an apparent effort to skew the results to best serve the insurer by lowering rates and allowances.

Ray Gunder states: “I am confident this is not an isolated instance and that this is the likely the reason they have failed to supply us all the surveys and other information as ordered by the court. For years, across the entire country, monies have been withheld from repairers under the guise of the so-called survey and “Prevailing Competitive Pricing” by State Farm and all those insurers who follow their lead. Such deceit and unethical business practices have earned State Farm many Billions of dollars in unjust profits. Billions that the consumer never received benefit of through proper and thorough repairs.”

As shown in the accompanying copies of Gunder’s survey and State Farm’s internal documents, Gunder’s “Repair Facility Survey” was completed and submitted on 09-29-2009. This survey shows where it lists 15 technicians and 34 work stalls. Furthermore it is asked of the repairer: “Do you use an automated paint materials rate calculator?” which Gunder’s marked “YES” and left the question: “Rate charged for paint materials” blank.

 

As  illustrated in State Farm’s internal “Repair Facility Rates” page, dated 09-30-09 (the following day), it clearly shows whereas the results of the information submitted by Gunder’s was changed and the survey was altered to reflect that the ”shop capacity” was noted as “10” and the “use paint/mtrl rate calculator” was noted as “N” (NO). Furthermore State Farm entered a “rate charged for paint materials “of $26.00 where Gunder’s had listed none. This information also shows to have been updated by State Farm’s Bob Davis.

The third and final document: State Farm’s “Market Area Information” reveals whereby 55 market area shops were surveyed representing a total “capacity” of 260 and suggests a “PCP” of $26.00 per refinish hour for materials.

This report reflects that “0”, ZERO, none; not one respondent noted the “use of a paint/mtrl rate calculator usage” even though Gunder’s clearly had. This document shows “last approved by BCXO Davis, Bob”.

The full text of the survey originally filled out by Gunder's Auto Center can be viewed HERE.

The full text of the survey Gunder's Auto Center alleges was changed by State Farm can be viewed HERE.

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