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Wednesday, March 10, 2010

Beware of "Concierge" services.

Auto repair quality in Progressive Concierge shops ranked lower than industry average in J.D. Power and Associates Insurance Claims Study

The results of amsurvey by J.D. Power and Associates - may have come as a shock to the nation's number three auto insurer, Progressive, but not to the post-repair inspectors and vehicle owners who have seen all too frequently the inferior quality work coming out of Progressive's Concierge body shops. In fact, to say quality is anything better than poor, based on what I've seen, would be a gross understatement. Progressive's customers obviously agree with me.

The J.D. Power and Associates Insurance Claims Study reported that repairs undertaken through Progressive's network of fifty-four Concierge repair facilities in thirty-nine of the nation's major metropolitan markets are little faster, and a little less expensive than the industry average. For that, Progressive is to be praised.

But there is a different story to tell when it comes to quality [see footnote]. Concierge customers ranked repair quality they received below industry average - even lower than the quality Progressive customers received when they elected to have cars repaired in shops other than Concierge.

Moreover, Progressive's Concierge shops follow only Allstate for bragging rights to the industry's highest failure rate, which causes claimants to be burdened by the need to make return trips to body shops to correct work that wasn't fixed right the first time.

Says the study, "If there is a clink in the armor for Progressive, it is that the end product, the vehicle repair, lags the industry both in terms of customer perception of quality as well as necessity for repeat visits to the body shop, which work to drive back up the claims costs saved due to the concierge business model."

What is especially bad for Progressive is that as a result of the insurer taking direct control of the repair - everything from the initial estimate to the final inspection - customers see Progressive as being directly responsible for the quality of the job. And isn't that the way it should be when an insurer wants to act as the repair expert and call the shots during the repair at the body shop?

Consumers are not fools

Generally speaking, consumers by and large accept at least some personal responsibility for the outcome of a collision repair job, especially when they are involved in the decision making process. When the job doesn't turn out right these consumers will often blame poor quality work, in large part, on body shops they chose to deal with, even in cases where the insurer pressured them into selecting from a preapproved list. This is the rule among competitors of Progressive.

But Progressive is the exception to the rule; 63 percent of Concierge customers blame their substandard repair directly on Progressive, the insurance company that took their money in exchange for the right to stand in their place in dealings with the body shop. As far as consumers are concerned, the hand-off approach that Progressive advertises makes the insurer solely responsible for the outcome of the repair whether good or bad.

According to J.D. Power and Associates, 48 percent of a customer's overall impression of his/her insurer is driven by their claims experience. The worst part for Progressive is that we know from historical data that customers who are to some degree dissatisfied are more apt to shop for coverage among other insurance companies, and are less likely to renew policies with the same insurer.

Can Progressive turn customer opinion of Concierge around?

Progressive's Concierge service already rates high for courtesy and friendliness of its staff who meet personally with claimants to obtain authorizations, take the keys, explain the repair process and provide them regular updates while the car is out of commission. Consumers favor this personal approach above that of the impersonal call center whose customer service employees are faceless and seemingly less empathetic to accident victims.

But Progressive can't forget that collision repair is, first and foremost, about repairing the car to preloss condition. Everything outside of performing the needed repair is of less importance, including to some degree, daily communication with the claimant.

Most consumers expect to be treated politely by claims staff, and there are no extra points for doing what's expected of you. But I think I speak for the majority of consumers when I say emphatically the most important consideration is getting the repair right the first time. That's an expectation, too. In fact, if every time a consumer looks at his/her car he or she believes they got the high-quality repair they expected and paid for, they'll be more willing to put up with the shortcomings of the claims department staff.

Often collision repair shops have blamed Progressive for hiring young, inexperienced, college-educated females and paying them an above average wage to don their short skirts and high heels and beat consumers and shops down to the bottom dollar without even knowing the nomenclature of parts on a car. On the surface it may seem to some to be a good move to pay an inexperienced employee a few dollars per hour to negotiate a reduction in hours from a repair shop estimate normally billed at more than $40 per hour. However, in my opinion, if Progressive is to turn its Concierge program around and gain the confidence of its customers, it will have to pay money sufficient to attract better quality shops into its program, even if those shops refuse to negotiate on how a car should be repaired and the amount of money it takes to accomplish the repair.

Unfortunately for Progressive, body shops on the high end of the quality spectrum won't likely see the need to negotiate with insurance staff that lacks an understanding of vehicle safety and crashworthiness - even when the negotiator looks like a Cover Girl model. So it will have to step up to more experienced adjusters as well.

Now that I've had my rant, here is my advice to Progressive: Spend more money in the shop where additional claims dollars can buy higher quality parts and labor. Save the money you're spending employing cute girls whose jobs are to negotiate and con customers into believing they received a good job even when they didn't. While the present approach may have seemed innovative and forward thinking to the bean counters, take it from one on the streets looking at the work everyday. The Concierge claims model ain't workin' and your customers in the 2007 J.D. Power and Associates Insurance Claims Study just told you so.

**NOTE** Often consumers asked to rate the quality of repairs don't understand the intricacies of collision repair well enough to spot anything less than the most glaring of deficiencies. Therefore, it is with all probability that the number of consumers dissatisfied with repairs at Concierge facilities would be much greater than the number found in the The J.D. Power and Associates Insurance Claims Study if repairs were to have been viewed through the eyes of an auto inspector knowledgeable in collision repair techniques for the brand of car being scrutinized.

This post sponsored by; Bernard's Advanced Collision.

Toyota Tundra Recall expanded to al 50 states.

Detroit, MI) -- Toyota now says it will fix all 2000 to 2003 model year Tundra pickups sold in the U.S. to address a risk over frame corrosion.

Last November, the car maker recalled 110,000 Tundras sold in 20 cold-weather states.

At the time, Toyota said exposure to heavy road salt could lead to corrosion, which could cause spare tires or even the gas tank to drop onto the road.

Toyota told its U.S. dealers in a notice yesterday that it would expand the recall to Tundras sold in all 50 states.

Company spokesman Brian Lyons wasn't able to say how many additional vehicles would be involved.

Toyota has recalled more than eight million vehicles worldwide for mechanical problems with its accelerator assembly and over floor mats that could cause the accelerator to stick.

In February, Toyota recalled nearly 500,000 hybrids, including its top-selling Prius, because of braking problems.

This post sponsored by; Bernard's Advanced Collision.

Claims adjuster among 5 arrested in auto insurance scheme.

Five Florida residents, including a claims adjuster for Zurich Insurance Group, are accused of stealing more than $240,000 from the insurer by creating multiple false and fabricated claims.

Donald Alfred Toohey III, 30, of Lake County, Fla., was recently arrested following an anonymous tip in September 2009 of possible fraudulent activity during his employment with Zurich, according to the Florida Department of Financial Services’ Division of Insurance Fraud.

An investigation found that Toohey, along with four other individuals, were allegedly receiving payments from 26 different claims, totaling $240,000, from August 2004 through June 2009 in various counties in Florida. The investigation discovered that Toohey, using his position as a Zurich claims adjuster, created fictitious claims for monetary gain for himself and his four co-conspirators, all of Pasco County, Fla., according to investigators.
The co-conspirators are identified as Scott J. Kincaid, 44; Brian Frederick Kneifer, 26; Anthony Michal Kneifer, 26; and Tricia Ann Allen, 27. All four, along with Toohey, face up to 15 years in state prison if convicted on charges of grand theft and conspiracy.

This post sponsored by; Bernard's Advanced Collision.

The scam was allegedly initiated by Toohey, who would create a fraudulent file and claim for each of the participants, showing reason for reimbursement to the individual for injuries occurring either to the person or their automobile during an accident, according to officials.

The participant would then receive a check in the mail with the understanding that a portion was to be paid to Toohey.
The investigation into Toohey’s alleged activities led the fraud division to confirm three or more checks received and cashed by each individual with thefts ranging from $8,800 to more than $67,000.
Zurich Insurance Group informed investigators that none of the five were policyholders at the time of payment, or at any other time, and payment audits confirmed the payouts as fraudulent, according to the Florida Department of Financial Services.

Coakley, motorcycle insurers settle


BOSTON (Legal Newsline) - Settlements have been reached by Massachusetts Attorney General Martha Coakley with four auto insurance companies over allegations that they overcharged Massachusetts consumers for motorcycle insurance.

The state's complaint alleged that Metropolitan Property & Casualty Insurance Company, Plymouth Rock Assurance, Pilgrim Insurance Company and the United Services Automobile Association used inflated motorcycle values in calculating premiums for many Massachusetts consumers. As a result of this practice, millions of dollars were overcharged in insurance premium overcharges, she alleges.

This newest settlement is expected to return $9 million to consumers and follows settlements with Safety Insurance Company, Liberty Mutual and Quincy Mutual in January over similar allegations. All told, the seven insurers are expected to return $20 million to consumers and pay Massachusetts more than $1 million.

"We are pleased that these insurance companies will return $9 million in insurance premium overcharges to affected motorcycle owners," Coakley said.

"While we appreciate that these companies cooperated with our investigation, it remains troubling that they systemically overcharged their customers on such a large scale."

Metropolitan Property & Casualty will return $3.5 million under terms of the settlement, with Plymouth Rock Assurance and Pilgrim Insurance collectively returning $3.6 million and USAA returning $2.3 million. Additionally, the insurance companies will make more than $500,000 in payments to the state and adopt conduct reforms.

The state's investigation into motorcycle rating practices began in the fall of 2008 following a complaint from the owners of a 1999 Harley Davidson Road King Classic that had been valued at $20,000 by Safety Insurance company. After the motorcycle was stolen, the company offered $11,000 to settle the claims and tried to refund $1,500 in premiums that had been based on the $20,000 value used from 2003 to 2008.

This complaint led Coakley's office to begin reviewing Safety Insurance and other insurance companies' practices of inflating and un-depreciating motorcycle values to rate coverage.

Many auto insurers operating in the Massachusetts marketplace were revealed to have failed to obtain current book values for motorcycles they insured and instead used inflated and out of date values to calculate premiums, leading to multiple settlements, Coakley said.

This post sponsored by; Bernard's Advanced Collision.

Monday, March 1, 2010

Make A Wish car show this weekend.

There's a great event this weekend (March, 7th 2010) for classic car buffs at the Amarillo Civic Center, the annual Make A Wish Car Show .

TIckets are $5.00 for adults - $3.00 for kids and the proceeds go to9 a great cause!

More details HERE.

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