Progressive Thinks I’m a Crook Because I Made a Profit

January 10, 2005 by
Filed under: Uncategorized 

Did you know that making a profit is considered fraud? That?s right! According to some genius at Progressive Insurance, marking up a sublet bill and making a profit is committing fraud. I?m now a crook who needs to hang his head in shame and fear a visit from the Connecticut Motor Vehicle Department dealer?s licensing cops. Yup, that?s me, a damn, greedy, Republican, money grub. I?m costing the insurance company and they are not taking it any more.

Recently, some second-in-command yahoo named Jason Richling, at Progressive?s Glastonbury Connecticut office called me to whine about a towing bill. I?m so ashamed.

A customer called and wanted us to pick up his 2005 Subaru Legacy at some garage on the other side of the state. I said, certainly, no problem. I called the towing service we use and sent them to pick up the car. The towing company paid the towing and storage charges owed to the garage that originally towed the vehicle. Then my towing service towed the vehicle to my shop and billed me for his towing expenses, plus the money he had paid to the other towing company. We started a repair order, called upstairs for a check, chased down two people to sign the check and paid the entire bill.

Next, I entered both tows into my trusty Tow Bill Helper software, which magically marked up the entire amount to give me my desired sublet gross profit. What? You don?t make a profit on sublet repairs? Some business person you are.

Anyway, before we had the customer?s vehicle towed we explained to him the problems we would have with his insurance company, Progressive. We carefully explained that Progressive would probably be willing to pay less than the amount needed to properly repair his vehicle, and that he would be responsible for any differences between the cost of the repair and what Progressive was willing to pay. He seemed to understand. Fine.

Knowing that the Progressive appraiser would soon arrive to look at the vehicle, I had my technician bring the car in and take off the few parts necessary to write an accurate appraisal. We had the vehicle up on the lift when the appraiser arrived. It had extensive damage to the underside. Apparently the owner took the vehicle over the river and through the woods to grandma?s house. I, my technician and the appraiser spent about a half hour examining the vehicle looking for all the damage. Normally I would have written an estimate prior to the appraiser?s arrival, but he showed up before I had the chance.

The appraiser then spent about an hour out in his office on wheels creating his stingy work of fiction Progressive calls an estimate. Of course, as predicted, and as we warned the customer, Progressive?s estimate was deficient. Their labor rate was $6.00 less than I will accept. We figured the owner would be responsible for about $500 to make up the difference. Then it gets interesting.

The appraiser asks for a tow bill. I give him the print out from my Tow Bill Helper software listing both tows, what they cost, and the total. Apparently Progressive has been holding seminars on my Tow Bill Helper because he immediately said, ?Nope, I need the originals.?

I asked him what he meant. What did he mean by ?originals.? He wanted to see the slips that I was given by the towing service. I told him those slips were private internal business documents for our eyes only. He insisted that he needed to see them. Then I asked, ?Would you ever, in a million years, dream of walking into a store and ask the clerk to see his invoice from his wholesaler to see what the store paid for that can of beans you?re about to purchase??

He appeared confused. Had no one ever challenged him on this before? He told me he would pay me for towing when he had those slips. I said, ?No problem.? I would just have to charge the customer and then he could get reimbursed by Progressive.

Once the appraiser left we called the vehicle owner and explained the damage, how much it would cost and how much Progressive was willing to ?give? him. He was not happy. Why should he pay more than his deductible? Good question. He shouldn?t. But I certainly was not going to repair the vehicle just to pass the time. We need to make a profit on every repair, otherwise, why bother. The customer told me to hold off on repairs until he talked with his insurance company. You can guess how that worked out for him.

About an hour later we get a call from another body shop, about 30 miles away, wanting to pick up the car. A Progressive DRP wanted to pull a car from my shop. Oh well, no biggie. It wasn?t the first time, and it sure won?t be the last. We gave them the charges for towing, storage and tear down. I had a nasty cold and went home for the rest of the day. That evening my assistant called me at home to tell me she?d received a call from this Jason Richling at Progressive insurance. Dear Jason wasn?t happy. My assistant explained all the charges incurred, and informed him that the vehicle was not leaving the shop until they were paid. He rattled off a list of arrogant insults and asked that I call him in the morning.

The next morning I was feeling a little better. Then Jason Richling called. It made my day, yes indeed. He immediately began complaining that I was giving his company a hard time. How dare I mark up a tow bill? I?m running myself out of business and appraisers and insurance companies are all talking bad about me, and I?m so unreasonable. He told me his company does not pay a markup on any sublet bills. We don?t deserve it. We don?t do anything. Why should we make a profit on a sublet?

We don?t do anything when we buy parts either, but we make a profit on them. We mark up used parts. We don?t make the paint and materials but we make a profit on them. Any time your money is tied up in parts, materials, sublet bills, anything, you should be making a profit on that money.

Jason told me I was committing fraud because I wouldn?t show him my tow slips. When I explained that those invoices were private and secret business documents that no one but us had a right to see, he shot back with the most brilliant argument that I would have to show them to the IRS if they wanted to see them. Yes, Jason, great come back. I can see why they made you number two in your office.

Since I was committing such heinous fraud Mr. Richling was going to file a complaint with the Motor Vehicle Department, or he was going to convince the vehicle owner to file the complaint. I begged him to file that complaint. I have been trying to get the Connecticut Department of Motor Vehicles to give a formal ruling on the towing and storage issue for a year but they refuse to stick their neck out. Some in the department think it is illegal to mark up a tow bill. Can you believe it? People in charge of enforcing Connecticut laws don?t understand the laws they are supposed to be enforcing. Towing and storage laws only apply to license towers, something we are not. Our shop does not own a wrecker, therefore it is not bound by any laws regulating wreckers. I can charge whatever I want for towing (being reasonable, of course) and it really pisses off Jason Richling, second-in-command at Progressive Insurance.

The DRP shop picked up the car and paid the bill in full. I charged for my time and money invested in that repair order. I even charged for the time I wasted trying to explain economics to the genius at Progressive. Unfortunately for Progressive, I doubt if they got their money?s worth. I don?t think the information stuck. But I did enjoy my opportunity to speak with someone as esteemed and important at Progressive Insurance as Jason Richling. Oh yeah, I almost forgot, Mr. Richling informed me that ?from now on, any customer who has a car in your shop will get a letter from us explaining how difficult you are to deal with, and that they will probably have to pay money out of their pocket if their car is repaired there.? Sounds like a great lawsuit to me, don?t you think? Truth is, I tell Progressive?s insureds and claimants the same thing, only Progressive is the difficult party in my version.

You may be thinking to yourself, ?Real smart jackass, you lost a job because you were too stubborn.? And you?d be right. I did lose the job. In fact, it was a $10,000 repair, of which about $1000 should have been net profit. But Progressive only wanted me to make $500 net profit. Yes, that is better than nothing, but that would just make me another cheap whore, wouldn?t it?. If I laid down for $500 this time, they?ll want a better deal next time. Even a whore should have principles. Hell, Progressive is paying the DRP shop $2 per hour less than they were so generously offering me. Isn?t that sweet? The DRP shop manager asked how we get more money out of the insurance companies, how do we get paid what we get paid. He just demonstrated to himself why he doesn?t get paid more.

One of the last things Progressive?s Jason Richling said to me before he hung up was, ?John, you?re a piece of work.? At least I can print what he thinks of me.

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14 Comments on Progressive Thinks I’m a Crook Because I Made a Profit

  1. John, John, John on Mon, 10th Jan 2005 4:50 pm
  2. First off, I didn’t want to blatantly advertise, so I made up my email address – but my name really is Patrick, and at least John knows what my email and website is.

    Second, I can see yet another instance of where having a post-repair inspector on your side could have benefitted the shop.

    It’s important to understand that the consumer has happily been getting screwed by the insurance industry for years – except they think they’re in "good hands", that the insurance company is "on their side" or, "like a good neighbor", the insurer is there for them.

    Shops need to realize that most people have paid insurance for years (statistically 7 years) and NEVER HAD A PROBLEM with the insurance company. I’d go as far as venture a guess that the agent even smiled and made pleasant small talk while taking their check every month.

    Now, they have an accident and some shop (who they most likely never dealt with before) is telling them that they’re in for a fight – against a party that has never given them trouble in the past (remember, they haven’t had the experience of a claim, and if they did, it was probably fixed by a whoreshop … ooops, I mean DRP). Who’s the bad guy here in the consumer’s eyes ?

    Wouldn’t it be beneficial to have a third party, unbiased source to refer the customer to ?

    We (Post Repair Inspectors) can document the inadequacies in the insurance estimate for the consumer in twerms they can understand, with potential repercussions that they usually heed.

    And, if the consumer is still unswayed, wouldn’t it be great to offer that customer an unbiased post-repair inspection that clearly identified why they shouldn’t have gone to the whore shop in the first place ? Yes, at that point it may be too late, but you need to have the documentation to better serve (and warn) the next guy.

    For what it’s worth, quality shops should embrace post repair inspectors – if you’ve got nothing to hide, you’ve got nothing to lose and everything to gain.

    Of course, this is just my nickels worth.



  3. Profit center? on Tue, 11th Jan 2005 4:35 am
  4. I will bet that your charges for so called "doing nothing" were more profitable that actually fixing the car in this case and best of all: it cost Progressive anyway. They are not smart enough to see that they are paying the same bill one way or another but meanwhile you achieved the "reverse steer" as I call it. I would bet that the customer did not end up very happy and is sure to change insurers upon renewal. Nice job!
    Question: Why don’t we collision shops charge and get paid for for storage on vehicles that are being "repaired" in our shops? Sometimes it takes over a week just to get an appraiser down for an inspection. You can’t really order parts or do much of anything else until some kind of agreement is reached so "Where’s the rent?" Some would argue that we are not entitled because we are repairing the car and it is assumed we will make a profit on that, so we can’t double dip. But, on the same note, if the car is pulled from your shop, you will get paid for it. I don’t get it.

  5. Brad Larsen on Wed, 12th Jan 2005 6:30 pm
  6. I am going to have to agree with Patrick on the post repair inspection thing ( or in this case it might be better to call it a pre-repair assessment. Having a third party look at a pre -repair estimate from both parties is, from all I have seen in my 27 years in the business, the best possible senario to end this he said, she said shoving match that goes on between two grown [professionals?]

    Arbitration has proven to be the most cost effective way to achieve a fair settlement when two parties clash. Someone should come up with a simple contract that would allow shops to retain their customers without fear of losing it to another party, before having their side of the story looked at. And the same goes for the insurance company.

    These battles ensue long after the dust has settled and the damage that is being done to both sides goes on for months and even years.

    It is a shame not everyone has the vision Patrick has.

  7. Rob Johnson on Tue, 25th Jan 2005 4:51 am
  8. Great article John, thanks for taking the time to share.

    Been there, done it….and it suprises me how many shops actually fall for the "you are running yourself out of biz" line….it sickens me…..

  9. Barrett/Fl on Thu, 27th Jan 2005 6:09 pm
  10. All well run operations seem to hear the same from these high risk-low rent claimspeople.

    The funny thing is they say each of us are ‘The Only Ones".

    Educating consumers one at a time is where it’s at and no one can do it better than pro-consumer repairers and Post Repair Inspectors!

    Each need refer each other!


  11. progressive's insurer's hold on for the ride on Fri, 28th Jan 2005 5:49 am
  12. i have been doing collision repairs for 31years and it is getting so bad for the policy holders and there 40,000.00 and up vehicles. what will the vehicle be worth if we repair like the ins co wants us to repair it?i had a claim from progressive and on the estimate that they had written on the street was safelite glass to install the windshield. the price on the estimate was 280.00 to install. so i called safelite and asked them what was my price on the install of the glass. safelite said that was my price. i called progressive and told them that i would need a supplement on the glass . my mark up came to 350.00 for the glass. progressive said that they do not pay mark up on sublet glass. so make a long story short i told them i will not have safelite install the glass at my shop and that suggest they take the glass work somewhere else. i finished the vehicle and gave the car back to the customer with the glass not replaced. i explained to the customer and he understood since he was in business also. i have repaired his car just recently and he has changed ins. co. he said when his car is in a accident he wants the car fixed in the shop he chooses not the shop progressive is gettting a deal in.all people expect the value of there vehicle to remain the same after an accident but if you take it to these cut rate shops that the insuance use beware of the value of the car when it is completed.

  13. Truman Fancher on Fri, 28th Jan 2005 7:35 am
  14. BRAVO!

    A man after my own heart. Of course I’ve already had my "chat" with Progressive here and so far so good, but I always have Allstate, Nationwide, and others to keep me going like this!

    This business needs more people like us and fewer fools thinking they are makin money.

  15. Jeannie Warren on Tue, 3rd Feb 2009 6:52 am
  16. I am a consumer and am googling Truman Fancher because I was going to take my car there but this man scares me. I feel like he would try to get teh most out of my car repair for his profit margins and I think I would rather go somewhere else.

  17. Nic on Wed, 19th May 2010 9:57 am
  18. I cant stand reading whining like this its annoying and pointless. We all have to have pointless fights with insurance companys and to be honest if you dont act like a prick to them they usually give you what you want. The main thing I dislike about this cry baby paragraph is that you dont seem to be concerned with your customer all you talked about was your money and dont get me wrong we all have to make money in this industry but if you dont focus on the people and there needs you wont be in buisness long period. (unless your from the east coast which it sounds like you are)All insurance companys are a problem but if you are good to the adjuster 9 out of 10 times they will give you the same respect. I wrote this because if we all have a go screw yourself attitude bodymen, bodyshop owners, and painters will carry on this asshole stereotype. We cant act like dirty old bodymen anymore that age is over.

  19. Deck the halls on Wed, 21st Dec 2011 3:10 pm
  20. It’s BS in my book to mark up towing service anyway and Progressive has a right to see the original towing bills. As a consumer, if I would have my car towed and have towing coverage, I would have to send progressive the original bill to be reimbursed any monies so why are you any different because youre a mechanic? Also as a consumer, I would be pissed if my mechanic marked up a towing bill to suit their own greed.

  21. John Shortell on Tue, 3rd Jan 2012 5:26 pm
  22. You’re a freakin genius.

  23. Chris Clarke on Tue, 27th Dec 2011 2:42 pm
  24. @Deck the halls I agree with you up to a point. If insurers want to cut shop owners out of any mark up or profit from a sublet, then they need to make arragements to pre-pay or have those items billed to them so that shop owners do not tie up their own money. @Jeannie Warren; Jeannie he scares a lot of people. He preaches that he is looking out for consumers when his primary goal is to line his own pockets and feather his own nest. Fixing your car right is secondary. Truman claims to fix cars right and that every one else in his market is a butcher. Sadly in most markets “the best” is only one notch higer than the next best shop in town. If the next best is a butcher……Well you get the picture.

  25. Jack Armstead on Mon, 28th Jan 2013 8:18 am
  26. This thread/article is several years old but has been resurrected from some recent comments in an e-mail thread I’ve received about the “best ideas” we’ve had while we’re in the collision business.

    First off, it is obvious that there are insurers on this site who are looking to further intimidate shop owners. The lady who said she “was going to have T3 fix her car but…. was going to Google him…” is completely a plant from an insurer.

    For the others that are trying to say that shops shouldn’t make a profit from sublet services, let me explain it a better way. The concept of “loss of use” should be familiar to many of you here (whether a shop or insurer disguised as a shop). The owner of a collision shop is entitled to “loss of use” of his money just as a claimant is entitled to a “loss of use” of his vehicle when it has been damaged and is being repaired.

    A collision shop needs to account for every dime of his money (to pay his bills promptly). Imagine a shop owner who incurs a $500.00 tow bill (the cost for the first tow and storage) and then a second tow (to get the vehicle to his shop). This means that the tow company pays the $500 and then tacks on another $200.00 to tow from the original storage lot to his collision shop. Now, when the vehicle arrives, he owes $700 minimum. Now, let’s say his parts bill is coming in from a Dodge dealership and he gets “less 3% net terms” if he pays his bill on time or before a certain date. If that $700 he dished out was needed to pay the Dodge bill, he’ll lose the discount of $21.00 because he doesn’t have enough money in his account.

    I can’t begin to tell how many times I have seen collision shops lose money in several areas because their cash flow position was too weak (from giving too many things away to insurers for free or next to nothing). I hope someone reads this but the people on the e-mail thread certainly get it.

  27. Charlie Come lately on Fri, 5th Jan 2018 3:00 pm
  28. Just basic business 101 , you can’t be in business selling anything for what you paid for it. you will not continue to be in business, just today CSAA ask that I don’t mark up a mechanical sublet , their reasoning is nobody else charges a mark up . why should they pay me. Bottom line, they could give three shits if I’m in business tomorrow , so I don’t want to have their jobs , I just want to fix cars and create relationships , but instead , I’ve become and Attorney, Doctor of headaches, counselor, Mathematician, and an expert on apologizing for being in business to these clowns..

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