Twitter You Tube Facebook Autobodynews Linked In

Thursday, 24 March 2011 16:30

Ray Gunder Takes on State Farm Labor Rates Surveys

Ray Gunder is clearly not a fan of State Farm Insurance.

The owner of Gunder’s Auto Center in Lakeland, Fla., is in the midst of a long-standing legal battle with the insurer over what he says is the insurer’s slanderous comments about his company to consumers, and tortious interference with his business.     But were he to address the industry, Gunder said he’d discuss something that extends beyond just State Farm: labor rate surveys.

“The so-called ‘market survey’ is designed and implemented under the simple insurer pretext that if you don’t participate, you won’t be allowed to participate,” Gunder said. “What this simply means is if you don’t get in line with everyone else, we will steer every repair away from you with every resource we have at our disposal. You either fall-in, or get left-out.”

By participating in insurer labor rate surveys, Gunder said, quality repairers reduce themselves to earning the same rates and allowances that all others are “allowed.”

“Consider for a moment the repairer who has made substantial investments in training and certifications, facilities, and state-of-the-art equipment,” Gunder said. “They, along with other quality repairers, will be relegated to charge the same as the low-cost, high-volume providers. Simply stated, you become one with all those who do participate regardless of the quality of the workmanship and level of services you or they provide.”

State Farm, Gunder said, because of its size relative to other insurers, often leads the way, and other smaller insurers follow.

“I’m sure many like myself have often heard a claims person say: ‘When XYZ starts paying more is the day we will begin to pay more,’” Gunder said. “This creates a further problem of validating the so-called ‘prevailing competitive price.’ The fact is, a repairer could offer a lower price to a larger, higher volume insurer who sends them work on a regular basis while the repairer could assess a higher charge (or no discount) to a carrier they only serve occasionally and who steers away from their shop on a regular basis.”

By merely participating in the survey, Gunder said, a shop is lending validity and credibility to it.

“If so few shops participated, “the lumping of all repairers into one single group would cease. Repairers would compete on their reputations for quality, length of service in the community, savvy marketing and salesmanship at the point of sale - just as insurers do.”

Many in the industry believe there is “overcapacity,” too many shops chasing too little work, Gunder said, and that thousands of shops could close in the coming decade.

“Because the insurers’ concerted efforts to capture the collision industry have been thus far successful, if something isn’t done to preserve the independent repairers and their ability to determine their own pricing, it will become, ‘You either get in the program...or get out of the industry,’” Gunder said. “As I see it, the individual shop owner has a choice to either remain a ‘independent repairer’ or allow themselves to become merely subservient to the insurance industry.”

Gunder said as the industry meets in Las Vegas that he hopes others will follow his lead when he says, “I’ve made my choice.”

Read 3276 times