A body shop owner is questioning State Farm on why his “score” has been cut in half for no apparent reason.
The owner, who requested anonymity, said his score was always in the 70- to 80-percent range, but ever since State Farm “switched up” the system last year, his score dropped significantly. One of his locations had a score of 950, but after repairing three big jobs, it went down to 500.
“It was like, wait minute, we haven’t done anything different, we don’t fix cars any different, so how did our scores go down so much?” he said. “How do you lose 400 points for just fixing larger claims?”
He asked if it was the metrics and have they changed the way they figure out the score, but all State Farm would say was that “your average estimate was too high.” His average estimate is around $4,400, versus the national average of around $2,400, but he says “I can’t control that.” The average vehicle in his area is in the $40,000 to $60,000 range.
“If I have a repairable, late-model $15,000 to $20,000 wreck in the shop, I can’t control that. And they said, well you need to repair versus replace, and I said it’s a $20,000 hit! You’re not repairing a whole lot of anything.”
His MSO does a high amount of volume for State Farm, and so he feels he is being singled out over other shops.
“It’s almost like they want to feel you out,” he said, “because they could talk to 15 shops that do the kind of repair volume we do, or just put their thumb on me and say, ‘We’re going to knock this guy down and make him try to give us the money back.’ It’s easier for them to control me than it would be to waste time with 15 different shops.”
He says State Farm has people who go over the RPM scores and tweak all the shops on the Select Service program. When he recently opened another location, he says State Farm refused to put it on the program because their score was down at one location.
“Now how is it that a large MSO like Gerber or Service King can acquire 20 or 30 shops in one purchase and those shops either keep their DRP status or are added to the Select Service program?” he said. “But when a small independent MSO tries to add another shop, there is an issue.
“They said as soon as you get that score back up… I said, here’s my problem. I currently have a brand-new repairable Cadillac with 1,000 miles. It needs its two full front frame rails replaced. It’s necessary to remove the engine and trans assembly and dash, it’s a $25,000 job, and that’s going to kill my numbers again. The vehicle is not a total loss, and I feel I’m being pressured into making poor business decisions no matter which direction I turn. Our shop has a great reputation with our customers, insurance companies and local agents, and I’m tired of feeling like I’m running scared.”
There are shops down the street from each of his locations, he says, that look horrific and have terrible reputations yet are still on State Farm’s program.
“We pride ourselves on nice, clean offices and a great staff that try to do a great job,” he said. “State Farm says quality is their no. 1 concern, and our RPM shows that we’re 100 percent on quality and there are no concerns with our repairs. We have no work that is not being performed, re-inspections are 100 percent, isn’t that what you should be most concerned about?
“I can’t get a straight answer from anybody. They’ll say, ‘You’re .2 away, .2 that would increase your score a lot,’ and I’m like, .2? Really?
“In my immediate area, these numbers are changing dramatically, and [State Farm] uses it as a veiled threat: ‘If you don’t get your numbers up, you will be removed from the Select Service program.’ I said, we have been doing work for you for over 20 years, why would you remove me? Our MSO is a DRP for more than 10 other insurance companies, and our reviews and reports from our nine other partners are all good. We fix $15,000 to $20,000 wrecks for XYZ Insurance Company, our cost per claim is the same with them as it is with State Farm and they do not want to remove us from their program. Is this the future of the collision repair business?
“I pay CCC, Mitchell and Audatex every month for their services on each and every computer in our MSO, and they take all of the data that we generate and report it back to the insurance companies, who then compile it to use against me. The RPM program numbers are not based on any national averages, they’re used by State Farm to pit me against another shop to produce more in a shorter period of time, for less money. I know for a fact that they play our own locations against each other, so I ask you, is this free trade?
“If the national average of key-to-key time is X, and we meet or beat that time, State Farm does not reward us, our score does not go up, they tell us that our competitors are now working on Saturdays or putting on a second shift so five hours touch time really isn’t good enough. If we repair a vehicle with six hours per day touch time, then they tell us we replaced too many parts, so yes your key-to-key rating is good but your replace versus repair is too high so your score went down, maybe you should fix more parts. Your cost per claims are too high because you fixed a $20,000 wreck on a late-model $60,000 vehicle.
“My staff of highly trained estimators and managers are pulling their hair out trying to maintain a number that makes no sense to anyone one but one person at the top of the State Farm food chain. Our particular guy claims he does not even have a supervisor. The target is always moving; you can never hit it. But so far, it’s only with our friends at State Farm. Now on CCC, we see a new tab with a report card from AAA, so is AAA going to be next, or is it going to be XYZ Insurance?”