Many drivers felt there was no point if you couldn’t drive. Sales of auto insurance policies were down 11 percent compared to the prior year for all mutual insurance companies, except State Farm---which was up considerably.
In early 1939, State Farm Founder and President George Mecherle launched a sales campaign called A Million or More In ’44, an all-out initiative to have a million or more auto insurance policies in force by the first quarter of 1944. At the outset of the program, State Farm had 476,638 policies in force; it had taken the company 16 years to get there. Now, only five years after the start of the program and despite a raging world war, State Farm had added another 524,001 polices for a total of 1,000,639. State Farm was now the single largest insurer of automobiles in the U.S. Mecherle noted that people had come to appreciate the value of auto insurance. Driven by Mecherle, State Farm agents were very aggressive.
Some early collision industry-related companies were born during this time. Mill Supply Company of Cleveland, OH, provider of replacement body panels, was founded in 1942, and the Schofield Manufacturing Company was founded in 1943. Both manufactured steel replacement panels for popular model cars. These were designed primarily as rust replacements, but no doubt were used in some collision work. The Marson Company, best known for body fillers, was founded in 1948. Steck Manufacturing, known for its specialty body repair tools, was founded in 1949.
New products were introduced as well. In 1946, DuPont introduced Duco Metalli-Chrome paint, a luminescent lacquer that seemed to change color depending on how light reflected off of it. They were only available in darker colors, however, such as dark gunmetal gray or dark brown. In 1948, Reynolds Aluminum introduced a metallic flake for use in automotive finishes. By the early 1950s, Reynolds, Alcoa and others had developed improved metallic flakes for automotive paint. This, together with improved paint resins, started the industry on a road to a vast array of colors and color effect.
True body shops began to emerge after the war. Some shops began specializing in low-priced to medium-priced paint jobs and started attracting a lot of business---so much so that in some shops, two painters worked on the same car at the same time to increase the shop’s volume. A mid-priced paint job in the mid-1940s was $49.95. Materials cost $8, and two painters working together could prep, paint and finish eight cars per day, or one each working hour.
In 1947, the Equipment and Tool Institute (ETI) was founded as a nonprofit automotive industry trade group to help promote the proper use and upgrade of tools used in the automotive repair trade. The first PBE-only jobbers began to appear to service the burgeoning collision repair business. Prior to this time, the collision repair trade had been served by jobbers who typically served the mechanical repair market as a primary customer.
During the war, American citizens had to observe 35 MPH as the “Victory Speed” to save gasoline for the war effort. After the war, the “Victory Speed” was no longer in force, and people “drove with wild abandon” across America. It became a free-for-all on America’s highways, and nobody knew this better than Mecherle. In 1944, during the height of the war, State Farm processed 293,045 loss claims for auto insurance. In 1946, State Farm processed 648,609 claims! State Farm had to immediately hire more help and more office space. But it wasn’t easy. The war effort had called 951 State Farm employees to service, many of them key managers and trainers. It took until the end of 1948 to “right the ship” and bring things back to normal---but it would be a new “normal.” In the prior two years, State Farm had seen some of the worst losses ever, draining 40 percent of the reserve funds used to pay claims. For a few months in 1946, State Farm was hemorrhaging money at the rate of $1 million per month! Moving forward, the cost of claims had to be mitigated---but how?
Soon, a plan developed. State Farm would no longer insure a car more than 8 years old. They would no longer insure anyone under 21 (unless the family already had a SF policy), nor would they insure anyone over 70 years of age. State Farm also took a different tact in their advertising. To educate consumers about the huge cost of claim losses, starting in 1946, State Farm’s message was to drive carefully, reduce speed and avoid accidents. They said that State Farm auto insurance was one of the best bargains available, but it would only stay that way if the accident rate stopped rising. The company began cooperating with the National Safety Council and International Association of Police Chiefs in running safety campaigns.
Then in 1949, after 27 years in operation and becoming the largest insurer of automobiles in the nation, State Farm Insurance decided it was time to have its own network of full-time agents at the local level that would handle policy sales as well as claims. Up to this point, everyone had been part-time or handled State Farm policies as a side job, not as a full-time profession. It was decided, “The ideal agent was to be a man with at least a high school education, but preferably a college man. He was to be a man of integrity and standing in his community. Once he joined State Farm, he was to be educated in the techniques of insurance as well as trained in the skills of selling it, so he would be thoroughly aware of the nature of the product he was offering the public. He was to know the intricacies of life insurance, a field where policies are far more complex than auto insurance. And he was to know about fire insurance.”
Finally, a story about the formation of the collision repair industry in the 1940s would not be complete without mention of Glenn Mitchell---a parts counterman at a San Diego Chrysler-Plymouth-DeSoto dealer who founded Mitchell Manuals in his garage in 1946 by creating an easily used parts catalog for collision repair estimating. Mitchell had the idea of arranging collision parts by the quadrant of the car rather than by component groups, as in manufacturer catalogs. Eventually, aided by Duke Norman in 1958, he added labor and paint times, which enabled a body shop or insurance company to do a repair estimate and generate a bill of materials and work orders. Prior to this time, a body man would “guesstimate” labor by dollar amounts---as in $25 to hang the fender and $20 to paint it. They would then call the vehicle dealer for the parts prices. It was a laborious process, and the shop never really knew if they were making any money on the repair or not. But Mitchell’s idea, born in his garage in 1946, changed an entire industry.