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If It’s Broke, Fix It: Allstate, Sterling, and Your Shop

“We finally parted ways,” says a Louisiana shop owner who – during the past few months – has voiced his concerns to me about Allstate acquiring Sterling and his own business’s shaky relationship as an Allstate PRO shop. “But we’re still repairing cars with Allstate drive-in estimates – and making more money because they’re at a higher labor rate. Go figure!”

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The parting came as no surprise. Since last year, his shop had been receiving unannounced visits (similar to high school pop quizzes) from Allstate’s PRO Damage Evaluator, along with various executives. During these visits, he was told he wasn’t using enough LKQ parts or A/M parts and that he was replacing too many OE parts instead of repairing them. Because he wanted to stay on the program (Allstate was 30 percent of his work), he told them he’d work with them in any way he could to remain partners. And because they liked his attitude and how he responded “without making excuses like other shops they had visited,” they gave him 30 days to lower his average per estimate.

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Though frustrated, he still tried to please them. But the final straw, for him anyway, came in April during another unannounced visit, when they examined one estimate and told him he should attempt to repair a bumper cover for five hours instead of writing for a reconditioned cover. If that didn’t work, then he could replace it. He had also figured 2.5 hours to repair the radiator support, but “they said all the tech had to do was tap it out with a hammer – a real technical statement – and that .5 hours is enough time.”

He was then told his PRO status was being changed from a 1 to a 3, meaning his shop would no longer come up first on Allstate lists. This was to be a 90-day probation period.

What happened with the repair? “It not only required a reconditioned cover, but also a reinforcement and more time on the radiator support than I had originally figured. And they didn’t dispute the supplement,” he says. “There was no way this vehicle could have been repaired the way they wanted.”

At this point, he realized that try as he might, he and Allstate didn’t see eye to eye on … anything. So, during Allstate’s last unannounced visit, in which the local evaluator and another executive reviewed two claims – finding a two-hour labor dispute on one and a part dispute on the other – the shop owner felt empowered, much like a teenager who just got his license and takes out the car – without parental guidance – for the first time.

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“The ‘big boss’ leaned back in his chair and said, ‘I think it might be time for us to part for a while so we can decide what we really want. What do you think?’

“I said, ‘Good idea.’ “

These days, he’s still doing Allstate work, but drive-in estimates and field estimates are $3 per labor hour more, paint materials are $2 per hour more and he no longer discounts parts 10 percent. “When we call in a supplement, they have 48 hours to respond,” he says. “And they have to take pictures and make sure payment is made. Now their people have to do the work we were doing for them.”

To fill the gap that losing Allstate PRO work left, he’s increased his shop’s workload for other insurer DRPs. “GEICO has a drive-in claim service in our office, and we’re their DRP. They used to only come in on Tuesday and Thursday, but now they’re here all week. They let their customers know all the different DRPs in the area, but with us having an Enterprise car rental office in our shop, it makes the customer’s decision a lot easier.”

The shop is also a DRP for State Farm and a few other insurers and, he says, “their demands don’t outweigh the benefits.”

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I know what some of you are saying: “He didn’t proclaim his independence. He’s still a DRP for God’s sake!”

True. But now on his terms. He compromised with Allstate when he felt it was in his business’ best interests, but he was uncompromising when it came to repair quality.

And many shops – DRP and non-DRP – can’t honestly say that.

This shop owner may not be running his business the way you think he should run it, but he’s running it the way he thinks he should. So, yes, he did proclaim his independence.

And you can be sure that when he examines a DRP these days, he’s a little more discerning. “I expect to be treated as a partner,” he says. “Not a puppet.”

Editor Georgina Kajganic can be reached at [email protected]

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