Fed up with the rising costs of paint and materials and State Farm’s refinish pay rate, Don Harvey, owner of International Collision Service in Englewood, New Jersey, has written a second letter to State Farm CEO Ed Rust after an initial letter written in February yielded no response.
Harvey claims that after a bulletin was issued in 2007 by New Jersey Department of Insurance Commissioner Steven Goldman encouraging insurers to use paint cost accounting software programs and manuals, State Farm changed its refinish rate from $23 per paint hour to $28. Since that time, however, Harvey says State Farm has stuck to the $28 per paint hour figure and refused to acknowledge any paint cost accounting software.
“Automotive paints used on today’s advanced vehicles require many different tints to achieve the look and appearance duplicating the original finish,” Harvey wrote. “Therefore, all pricing cannot be properly and fairly determined by one multiplier, which is why the paint cost accounting software programs are so important, fairly compensating the repairer for materials used on the specific vehicle (color) being repaired.”
Harvey went on to say that a State Farm representative told him the insurer “holds true” to their survey studies. However, Harvey contends that less repairers have filled out the survey ever since the process became cumbersome several years ago when the survey went strictly online, forcing shops to call State Farm to get an authorization number in order to fill it out. Also, he questioned why, if State Farm only bases its refinish rate on its own survey, they changed their rate to $28 immediately after the Department of Insurance issued its bulletin.
“Most insurance companies are acknowledging the cost accounting software programs plus a mark-up, as the programs use an average cost to the repair from the suppliers,” Harvey wrote. “I hope you will review this letter and change the way State Farm NJ is conducting business and the good neighbor will do the right thing, properly and fairly returning vehicles to pre-accident condition.”
