"State Farm does not think it is reasonable to pay more for repairs than our competitors," stated George Avery, State Farm Claim Consultant, speaking to over 200 attendees at April's Collision Industry Conference in Portland, Oregon. Avery offered a 30-minute high-level overview of the changes the industry can expect from State Farm.  

Bob Smith (left) of SCRS speaks with State Farm's claim consultant, George Avery, at CIC.

Bob Smith (left) of SCRS speaks with State Farm's claim consultant, George Avery, at CIC.The new program, Select Service, will be replacing, in certain areas, the Service First program implemented by State Farm in the mid 1990s. Annual claims dollars paid by State Farm have reached approximately $8 billion. "At one time," Avery continued, "we had over 20,000 Service First shops." During this time, we heard the message loud and clear, we need to manage our data, not to the average, but to the top performer."

State Farm's priorities are very clear. They will protect their customer by working with shops that provide quality, efficiency and a competitive price. State Farm plans on working with top performers in the Service Select program, but will not have a definitive quality control measurement. "We are not about the business of telling you how to run your business," stated Avery. "We expect top performers to know their business." State Farm will be comparing shops to the rest of the industry. Third-party information providers will be pushing data to the State Farm Select Service Shops.

National Auto Body Administrator Jordan Hendler (l), gives three teachers from the Portland Public School District the gift of new books from the collision industry.

The shop selection process will be based on performance, geographic location, capacity and business needs. If a shop's business model is to give discounts and you are not giving State Farm discounts, this program may not be right for you. If there are no discounts across the board, that is okay too. What State Farm is looking for is a level playing field. They are going to trust the shops. The subrogation process will tell the tale if a shop has been dishonest about discounts and labor rates. "If we find a discrepancy in what the shop has told us and the truth, we will take appropriate action and we will do it now!" Avery emphasized. "These will be tough decisions." Local management will make them in each distinct region.

"We tried to have an ethical and professional program," declared Avery. "We are going to stay the course." Avery discussed industry reaction with respected colleague and friend, Bob Smith, executive director MoKan SCRS, asking him, "Everyone has raved about how ethical and professional State Farm is, yet, we are receiving a lot of criticism."

"It is about change," stated Smith, whose industry knowledge spans over 30 years. "Change is scary, everybody likes status quo and to stay in their comfort zone." Smith feels that the new State Farm contract is close to a decent piece of paper for this industry. He also recognized a history of mistrust. "Not with State Farm - they print it on paper and do what they say they are going to do," Smith quipped. Regarding industry reaction, he told Avery, "George, a fella gets snakebit a couple of times, he is suspicious of any movement in the grass."

Avery's presentation was well received by the CIC audience and industry participants are watching with cautious optimism.

Filling the gap

After four national meetings and multiple conference calls, the Estimating Procedures Committee Chairman Chad Sulkala, Acme Body & Paint, Boston, Massachusetts, and Co-Chairman George Avery, State Farm Insurance, Bloomington, Illinois, announced the Collision Industry Conference recommendation for the process Feather/Prime and Block - commonly known as the gap.

The statement reads: "The repair process associated with damaged painted body panels typically involves multiple operations; body repair, feather, prime, block and refinish.

The body repair process includes metal finishing and/or the use of body fillers to return the body panel to its undamaged contour. The repaired area is finished to 150 grit and free of surface imperfections.

Feather, prime and block are not included refinish operations that complete the process from 150 grit to the condition of a new, undamaged panel.

The refinish process starts at the condition of a new undamaged panel and is outlined and documented in printed and/or electronic time guides.

The body/paint labor and materials necessary to prepare the repaired area from 150 grit to the condition of a new undamaged part is a valid and required step in the process. The labor and material allowance for these operations requires and on the spot evaluation of the specific vehicle and damage."

With regard to this announcement, "Motor Information Systems did make this change in their database and the CIC Estimating Committee wants to thank them for clearing up the ambiguity of the language," responded Sulkala.