News: N.H. Body Shop Owner Bests State Farm in High Court
State Farm’s refusal to pay fair and reasonable rates for aluminum repair forces Precision Body and Paint to end 17-year relationship with insurer.
During a meeting with his area State Farm estimatics manager, Ron Reichen, president of Precision Body and Paint in Beaverton, Ore., chose not to re-negotiate his company’s Select Service agreement with State Farm. The decision ended a 17-year relationship worth $2 million in business over the past year.
“It was actually a business decision we had been considering for some time,” said Reichen. “Discussions came to an impasse over fair and reasonable rates and allowances for aluminum repair. Our terminating the Select Service agreement stems from our company being a certified Tesla repair facility and the investments in time, equipment, training, specialized equipment and facilities which we could not offer for the rates State Farm was willing to pay. This will no doubt enable our company to re-evaluate and revise our pricing on other goods and services for the other manufacturers of which we are a certified repairer for, including Porsche, Audi, Volkswagen, Nissan, Volvo, GM, Chrysler and several others.”
Along with all other insurers, State Farm has paid Precision’s posted aluminum labor rates in the past. With Precision being the only certified Tesla repairer in the state, it is believed that, with its growing popularity and its all-aluminum construction, State Farm has now elected to deny Precision’s aluminum rates under the Select Service program. As a result, like all other insurers, State Farm will no longer be provided the concessions (e.g. storage) Precision offered in the past.
“While insurers continue to adjust their rates based upon economic pressures, as vehicle technology advances with new sophisticated metals, manufacturing and repair techniques, repairers party to such programs as Select Service are precluded from keeping pace with their increasing costs," said Reichen. "We found attempting to do so, while maintaining the highest level of quality and service, to be both unreasonable and unsustainable, and as a business decision we elected to resign from the insurer’s program.
“This was Precision’s last DRP relationship and, as in the past, we will continue to work with all insurers on our customer’s behalf. Precision is committed to its customers and our community and will continue to work diligently to serve them with the highest quality repairs and service in an expeditious manner regardless of which insurer is involved."