At least that seems to be the thought process behind Progressive’s latest tactic.
Undoubtedly the most despised insurer in the industry these days (Allstate once held the title), Progressive has clearly sunk to an all-time low: attempting to collect from body shops for what it’s calling “excessive rental.”
Although repairers aren’t obligated to pay for a rental car — unless, of course, the shop has a contract with Progressive stipulating otherwise — Progressive has been sending Virginia shop owners letters suggesting that if they refuse to pay the amount named in the letter, they may be violating the law. The letter goes on to say: “This could include referral to a collection agency or litigation. … We may request that your driving privileges be suspended.”
“I’ve heard about Progressive doing this regularly and Nationwide doing it sporadically,” says Pete Petursson, executive director of the Virginia Automotive Legislative Committee (VALC). As for why it appears to only be happening in Virginia, so far anyway, he says: “It may be happening elsewhere and hasn’t risen to the surface yet, or someone in our region is trying to get a ‘gold star’ from corporate.”
The latest incident involved a VALC member/shop owner. The shop owner received a fax from Progressive regarding a six-month-old claim — requesting that the shop pay three days of rental for what the insurer called “shop delays.” With the shop owner’s permission, Petursson called Progressive.
“The Progressive rep told me that they paid approximately $27.76 per day for eight days of rental for a total of $222.11,” says Petursson. “The vehicle came in on a Monday. Progressive approved a parts and labor supplement on the following Thursday. Parts came in the following Monday, and vehicle was delivered same day.”
When Petursson asked the rep how Progressive could blame the shop for a “delay” when the vehicle sat over a weekend due to a parts shipment for parts that Progressive clearly missed on the first estimate, “She had no answer.”
“Progressive was also requesting a check for three days rental for a total of $222.11,” he says. “They were asking for the full rental amount, hoping the shop would be foolish enough just to cut the check. When I pointed out Progressive’s fuzzy math, she quickly apologized, redid the math and said she would gladly accept $83.29 from the shop to close the file.”
But Petursson wasn’t done yet. “I asked the rep under which Virginia statute Progressive felt they were protected and the shop had violated.” She had no answer, telling Petursson she’d have to get back to him.
But Petursson already knew the answer: Based on his conversations with the Virginia Bureau of Insurance (BOI), unless you have an agreement with a carrier that says otherwise, shop owners are under NO obligation to pay these requests. None. Zero. Zilch.
If, however, you’re not the type who can simply file these letters under “T” for trash can, you can always do what Virginia shop manager Greg Wolford does: Address the issue of rental responsibility in the repair authorization.
“The best way to avoid an issue like this is to set expectations up front with the customer,” says Wolford. “A doctor and/or hospital requires you to sign an authorization before they work on you. Even Sears, before laying carpet or flooring, has you sign one. Our authorization here has the following statements: Substitute Transportation Is Owner’s Responsibility. Sheehy Ford cannot be held liable for any charges either incidental or incurred. Rental coverage issues and policy limits are set by the insurance company and limits may be exceeded due to the repair process. Duration Of Repair Is Estimate Only. Sheehy Ford is not responsible for delays. This is due to the complexity of the repair process.”
So when Wolford gets a call for a “rental assist,” he simply faxes the signed authorization to the adjuster and “the issue usually just goes away.”
Regardless, even if rental isn’t covered in your authorization, you’re still under no obligation to pay.
But Progressive is betting that some of you will. After all, it’s worth a shot.
Virginia repairers: If you’ve received “rental reimbursement” requests from carriers, contact Pete Petursson at (703) 407-4416.
If you’d like a copy of Wolford’s authorization to adapt for your shop, e-mail the editor.