A Look at Allstate

September 12, 2003 by
Filed under: Uncategorized 

This article appeared in the September 2003 issue of BodyShop Business.

Allstate. Just say the word and you hear moans and groans. Just think the word and you?re bound to give someone nearby a cramp or shooting pain, like it?s some black magic voodoo chant.

?Who?s your insurance company??

?I have Allstate.?

?Uuuuuhhhh?..? You feel the knife rotating in your gut.

?What?s wrong with Allstate?? your customer asks.

You all know the rest of the conversation. Unless, of course, you are one of their Pro shops. And, apparently, there are plenty of you out there who are, because they continue get away with their tactics by using their Pro shops effectively to create a market within a market.

Here in southeastern Connecticut Allstate is a real problem. Their philosophy, according to their appraisers, is to pay the insured or claimant what is owed to them. Be fair. Be accurate.

Their philosophy, according to those who deal with them on a regular basis, is to pay the insured or claimant as little as possible, use as many LKQ and aftermarket parts as possible, and if there is any question or disagreements, ?See us in court!?

I have a database of more than 50 insurance companies that I dealt with last year. We are near a naval base and get people with insurance companies from every corner of the country. Without a doubt, Allstate is the most difficult insurance company I deal with. And I?m an easy guy to get along with. I?ve never thrown an appraiser out of my shop. I?ve never banned an appraiser from coming to my shop. I?ve never raised my voice to an appraiser, adjuster or any other insurance employee. But every time a customer mentions the ?A? word, or one of their appraisers pulls into my parking lot I get a sick feeling in my stomach.

Here?s the typical scenario when most insurance appraisers come to my shop. The appraiser walks into the front office. My assistant and the appraiser exchange pleasantries. I walk out to the front office to greet the appraiser. We exchange pleasantries, laugh, joke around, talk about the state of the industry or our families, hobbies, indiscretions, whatever. I hand the appraiser a copy of my estimate, we walk out to the vehicle, the appraiser checks my information on my estimate to make sure everything is correct, takes a few photos while we are still shooting the doo doo, and then he leaves. Usually I get a fax a few hours later with his or her estimate, and it?s very close to mine. Sometimes they write the estimate at my shop, something they are required to do by law, but I usually let them fax it to me later. Either way, the whole process usually takes 15 or 20 minutes.

Now here?s the typical scenario when an Allstate appraiser comes to my shop. The appraiser walks into the front office with a cloud of icy air in tow. Some polite small talk is exchanged. I greet the appraiser with a copy of my estimate. We walk out to the vehicle together. The appraiser glances at my estimate and then puts it in his or her hand under the notebook computer, where its completeness and accuracy won?t interfere with the appraiser?s mission. The appraiser then tells me he?s all set and will be in to see me when he is finished.

I have lunch. I test-drive a car. I solve a bunch of life altering problems in the shop. I write a few estimates. I negotiate a few claims over the phone.

Anywhere from one to three hours later the Allstate appraiser emerges from his mobile office, estimate in hand looking years older that when I last saw him. With a perfectly straight face he hands me his estimate while he stutters through an explanation of the LKQ and aftermarket parts, depreciation, old damage, betterments, procedures they aren?t allowed to pay for, etc????..

Remember, he has a perfectly serious straight face. I look at his bottom line and what a freaking surprise! It?s about half of the estimate I wrote on the same vehicle, the same damage.

I promptly hand it back to him and tell him that I?ve never believed in fairy tales and I?m not about to start now. Then I get the explanations. ?But I gave you what you asked for here. And I even gave you this over here. My computer says???..blah, blah, blah?.phooey! How do they put it on the Sopranos? ?Forget about it!?

The appraiser leaves without an agreed price and calls the customer to explain what a bad guy I am, and how we are the most expensive shop in the entire galaxy, and how they can get their vehicle fixed at one of Allstate?s Pro shops for his estimate amount. Unfortunately for the Allstate appraiser I?ve already prepared my customer for the torturous ordeal, and they are always amazed at just how accurate I am with my predictions. It?s at about this point my customer realizes that the ?good hands? they were promised had just molested them in the most vile manner and had left them rushing for a shower. The insurance company referral list I include with every one of my estimates now comes in handy, and those good hands are now left holding their own posterior.

Fortunately for me, most of my customers are pretty sophisticated and not hurting for money. I only lose about half of my Allstate customers. The other half pay the difference and have us repair their car any way. Or if they are the claimant they contact their own insurance company and let them deal with Allstate.

Why does it have to be like this Allstate? What is your problem?

A few months ago I had an article here explaining how southeastern Connecticut was making progress in getting paid a fair labor rate. Well, that progress is still active. Almost every insurance company is now paying us anywhere from four to ten dollars more per labor hour. There are still a few holdouts, but for the most part those holdouts take care of us on content. Allstate, however, wants to give it two us both ways. And I DO NOT take it both ways. So lately I?ve been filing complaints against Allstate and their appraisers with the Connecticut State Insurance Department. Yeah, this is about as helpful as asking Bill Clinton for help promoting family values and honesty in politics.

Here in Connecticut we have this little regulation that forbids licensed appraisers from using pre-determined guidelines from influencing their appraisals. It is against the law for them to be influenced by any party when writing an estimate. In other words, if Allstate tells their appraiser they can?t pay for buffing, and the appraiser blindly follows this order the appraiser is breaking the law. Unfortunately, the insurance department will not enforce this regulation. The appraisers get around this regulation by saying that they personally don?t feel the procedure is needed, or they believe the labor rate is fair. How can you disprove someone?s thoughts?

But it is also against the law for an appraiser to use deceptive or unfair business practices to manipulate the market. Now this is something that can be proven if it happens. You either did something or you didn?t do something. You broke the law or you didn?t break the law. The Insurance Department should have no problem taking action against a company or person who violated this law. Uh huh, and I?ll vote for Al Sharpton too.

On April 3rd, 2003 an Allstate appraiser visited my shop to write an estimate on one vehicle and negotiate an estimate on another vehicle. She actually did a pretty good job on content, but when it came time to talk about the labor rate she wouldn?t budge. It was the same worn out mantra, ?I get agreed prices with ever other shop in the area at $42. You are the only shop asking for more.?

I didn?t argue with her. I told her I wouldn?t accept such a paltry sum. She told me she wouldn?t pay any more than the $42 she offered. She left me a copy of each estimate with the words ?No agreed price due to labor rate difference? on each. I immediately filed a separate complaint on each claim with the Connecticut Insurance Department. They had recently released a memo to every insurance company doing business in Connecticut explaining that it is unacceptable to use one labor rate for all areas of the state as a blanket policy. Every claim had to be handled individually, and all aspects of the repair and repair shop had to be taken into consideration when negotiating a claim. Most insurance companies have heeded this warning. Not Allstate. Mobilize the army of lawyers and prepare for war!

The very next day, April 4th, I get a phone call from the manager of a body shop in a dealership down the street from our shop. He called to inform me that this same appraiser had just told him that she gets agreed prices at $42 per hour with me all the time. Read that sentence again.

The appraiser was trying to convince this other shop manager to bend over without lubrication.

I was dumbfounded.

This appraiser was lying to the shop manager down the street in order to manipulate him into accepting a substandard labor rate. Unfortunately for her, this manager had just received, from me, a copy of my latest area labor rate survey. He knew what I was charging. It was public information required by law to be posted in our office. How could this appraiser be so stupid, or so arrogant to try such a stunt.

Busted!

I had caught an Allstate appraiser red-handed in a clear violation of her appraiser?s license. And this was just one day after she left my shop without an agreed price on two claims, so it definitely didn?t slip her mind. This was a calculated attempt at falsely controlling the market. She was trying to trick a shop into accepting a low rate by lying about other shops accepting that rate. Then she?d have a shop that really was accepting this insulting rate. Before you know it everyone is working at that rate, afraid to lose business to their competition who, they were told, worked cheap. This is extortion, racketeering, mafia type behavior. Using artificial market pressure to pressure the market. What a concept!

Any reasonable person would believe that such behavior would be taken seriously by the State Insurance Department. After all, their reason for existence, aside from bleeding us of our tax dollars, is to protect the public from the power of the insurance industry.

I filed a complaint and waited for news of an investigation. I had fantasies of seeing headlines, ?Allstate Appraiser Busted for Manipulating Market. Attorney General Considers RICO Prosecution.? I daydreamed about sitting on the set at ?60 Minutes? across from Ed Bradley. ?Enough about Allstate Ed. Please explain to your audience why in hell a grown man, your age, with a head of gray hair has an earring? Just what the hell was going through your mind as you sat there at ?Earring are us? while some 17 year old high school cheerleader, working part time to help momma pay for new carpet in the double-wide, was stapling that stupid thing into your ear??

I was to be sorely disappointed. Two weeks went by without a response from the Insurance Company or a call from CBS. I called the insurance department and asked what was going on with my complaint. They couldn?t find it. Could I fax it again? I comply. Another week goes by and no word. I call again. ?I?ve reviewed your complaint. But we really can?t do anything about the labor rate. It?s determined by the market.?

?What are you talking about? My complaint isn?t about the labor rate. It?s about an appraiser caught red-handed lying to manipulate the market. That?s my complaint.?

He seemed annoyed. ?Well what do you want me to do? Do you want me to suspend her license??

?Hell yes! Isn?t that what you are supposed to do?? Now I was more than annoyed.

He asked me to hold on. I could smell the burning flesh of his hand. This was a hot potato, and he wanted nothing to do with it. He returned and told me that he had to pass the file on to his boss. His boss would get back to me.

A week later I called to talk to his boss. He never got the file. ?Can you fax me a copy of your complaint??

Another week goes by. I call the insurance department again to check the status of my complaint. Boss man gets on the phone and tells me he gave the file back to the original associate examiner. The examiner was out and wouldn?t be back until tomorrow.

I let another couple of days go by and called again. The original examiner told me he mailed the offending Allstate appraiser a copy of my complaint and was awaiting her response.

Two weeks later I get a letter from the insurance department along with a copy of the appraiser?s response. Basically, she denied the charges. The letter from the associate examiner said that he?s reviewed her response and it appears to be correct. They were closing the file and he apologized for not being able to act on the complaint.

?What the ???.?

I called the examiner at the insurance department and I could tell I was really imposing on him. He was annoyed. He told me I had not supplied proof. The damn fool! I told him I?d send him a signed affidavit if he wanted it, but he never asked for it. I went on a tirade accusing the insurance department of being a watchdog for the insurance companies instead of protecting the consumers. He strongly disagreed. Go figure.

I got the signed affidavit from the shop manager who told me about the appraiser lying to him and sent it, along with a response to the appraiser?s response, to the insurance department examiner assigned to the case. I?m not expecting any results but I am enjoying myself.

So why doesn?t the Connecticut Insurance Department take action against Allstate? With all the websites devoted to Allstate victims and horror stories, all the attorneys who complain about dealing with Allstate, all the body shops who complain about dealing with Allstate, with all the Allstate insureds and claimants who complain about dealing with Allstate, one would think it would get the attention of Insurance Departments across this country.

Does the fact that many of the employees in the Connecticut Insurance Department are ex-insurance company employees have anything to do with it? Connecticuts insurance commissioner was an insurance executive. The supervisor of the associate examiners worked for an insurance company. What are the chances that they still have many friends working at these insurance companies? Does the fact that Connecticut is the insurance capital of the world have any bearing on the politics and policies of the State Department of Insurance?

And what is Allstate?s problem? Why do they have to be so difficult?

I talked with a couple of ex-Allstate appraisers to find out what goes on in that company that turns their appraisers into such??.well, you fill in the blank.

Can you say ?Re-inspector?? As far as things go in Connecticut, the re-inspector that follows the appraiser is like the air that follows flatulence. Allstate?s appraisers are so worried about being written up by the re-inspectors who watch their every move. This fear is the motivation needed for the appraisers to chisel down those repair estimates to the malnourished corpses they become.

One ex-appraiser told me. ?Management is careful not to tell appraisers how to write their estimates. They know that violates the Connecticut law.? But the re-inspectors are trained to mold their appraisers? behavior. According to one ex-appraiser I talked with, the re-inspectors are relentless. The re-inspectors are given incentives to find problems with the appraisers? estimates. Too much time here. Why did you write to replace this part? Why didn?t you offer an appearance allowance on this? An ex-appraiser told me, ?They want real time. An hour for an hour dent.? They will find a problem on most estimates. These overages, along with the appraisers? serverity rates, or their average estimate dollar amount, strongly influence the appraisers? raises and advancement in the company.

The behavior modification that Allstate appraisers go through, I believe, is what caused the female appraiser mentioned earlier to lie to that shop manager. She was doing what she could to keep her marketplace rates as low as possible to keep her average estimate as low as possible. I doubt that anyone in Allstate told her to lie. I believe she was just trying to survive in the company.

Why would anyone work for this company? Well, many aren?t. In Connecticut, Allstate was having so much trouble hiring appraisers that they obtained a list of every licensed appraiser in the state and sent everyone of them a letter asking them to contact Allstate for an interview. I opened mine during dinner one night and in a few seconds has mashed potatoes shooting from my nose. I about died of laughter.

A running joke I have with many appraisers I deal with goes like this. They?ll come into my office looking haggard and disgusted and complain about their job. They?ll ask me if I?ve heard of any insurance companies looking for an appraiser. I say, ?Sure! Allstate is looking.? We both get a good laugh.

I contacted several people who now work for Allstate and asked them if I could interview them for this article. I got the same response from everyone. And as you can see, there are no quotes here from current Allstate employees. One of the supervisors, who I know pretty well, told me he would get back to me with the phone number for their public relations department. I?m still waiting.

Allstate remains the tough nut to crack here in Connecticut. But, aha! I am fighting back with some success. Just like Allstate ?suggests? that people take their damaged vehicles to one of their Pro shops, I ?suggest? to all my customers that they buy insurance from one of the companies on a list of the better insurance companies in my area. A referral list is printed on every one of my estimates and there are a pile of them in our sales department.

I?m dealing with Allstate less and less these days. This is probably due to a combination of Allstate steering their customers away from our shop, and our shop showing their customers my referral list. Whatever the cause, it?s made me and my customers happy, and has increased my shop?s gross profits.

Oh, and for all you Allstate appraisers out there in this great country of ours, all I can say is, ?Poor bastards. I feel your pain.?

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Comments

13 Comments on A Look at Allstate

  1. Roger Walling on Mon, 6th Oct 2003 5:59 am
  2. Your post is very dificult to read with the blue background

  3. Beyond Parts & Equipment on Mon, 6th Oct 2003 9:51 am
  4. This industry needs more shop owners like you. Congratulations.

  5. Beyond Parts & Equipment on Mon, 6th Oct 2003 9:51 am
  6. This industry needs more shop owners like you. Congratulations.

  7. Raymond Scott on Mon, 6th Oct 2003 10:33 pm
  8. The blue background is a little hard on the eyes, but your article is riveting. Well written. I’m printing this baby out for our state. We’re in the glass business and every little bit of titillating information helps. Keep up the good fight. We’re fighting in Washington state to rid the enemey from our midst.

  9. Raymond Scott on Mon, 6th Oct 2003 10:35 pm
  10. Enemy. Oops!

  11. Rick the Economist -- AKA I'm from Allstate on Tue, 21st Oct 2003 6:57 am
  12. It is called competition. If you cannot match the prices, then turn down the business. Every company has a different business model. If it does not match yours, move on. As you said, there are many other insurance companies to do business with. Isn’t Allstate building its own body shops in your area under the Sterling brand? FROM BODYSHOP SOLUTIONS: THIS IS AN ALLSTATE EMPLOYEE WHO POSTED THIS FROM AN ALLSTATE OFFICE. ATTENTION ALLSTATE. YOUR IP ADDRESSES GIVE YOU UP. AT LEAST HAVE THE CAHONES TO USE YOUR REAL NAME AND IDENTITY.

  13. PRACTICE WHAT YOU PREACH -- AKA AN ALLSTATE EMPLOYEE on Wed, 22nd Oct 2003 12:39 pm
  14. I AGREE WITH MOST EVERYTHING YOU SAY, ACCEPT I QUESTION YOUR CREDIBILITY WHEN YOU SAY THAT YOU ALLOW APPRAISERS TO "FAX" YOU THEIR ESTIMATES..YOU ADMIT THIS IS A VIOLATION OF YOUR STATE LAW AND THUS YOU ARE IN VIOLATION OF STATE LAW ALSO… YET YOU CONTINUE TO ACCEPT THIS AS A DAILY PRACTICE… From BodyShop Solutions: This is also an Allstate employee. This was posted from an Allstate office. I imagine this person’s boss would be interested in seeing that one of their employees agrees with me. And to correct this person, I am not in violation of state law when I allow an appraiser to fax me an estimate. Only the appraiser is in violation of the law. To say I am in violation of this law is to say that a crime victim violates the same law as the criminal. But it was a good effort.

  15. time to get paid Manny on Wed, 11th Feb 2004 8:45 pm
  16. Good job keep up the good posting.
    Ok people, take that allstate job. take there rate, but try to get as close to your rate as possible. make a letter allowing you to sue allstate in your customers name and have them sign, and have the customer know that insted of charging them you will sue allstate to get the amount needed to repair there vehicle back to pre accident condition.
    save them and after you have enought to go to small claims court
    go make a claim.you get your money.
    you are charging a fair rate to repair vehicles in your area so you get paid.

  17. bruce on Sat, 14th Feb 2004 7:41 am
  18. ct insr. dept is a joke i never heard of them doing anything to any one from insr. co.the insr. co. buys them. we are just no bodies. but we are in charge of many lives when we repair cars.

  19. george insana on Thu, 29th Apr 2004 9:08 am
  20. It’s time all shops refer there
    customers to an insurance co. that does not have there own body shops.
    why would u want to have your customers swayed to an ins.co. that’s your competition.

  21. ben logan on Thu, 10th Jan 2008 10:05 pm
  22. I am an attorney in a southern state. We have these folks “steering” here. Not only auto claims, but homeowners as well. Soon, my client will make them pay.

  23. Stacy on Thu, 17th Jan 2008 10:33 am
  24. You should be pleased to know Florida has shut them down!

  25. Bondo on Mon, 7th Feb 2011 8:52 pm
  26. If you are talking price fixing, ALLSTATE is the number one problem. How can they sell your auto insurance, and have a body shop? That is collusion, price fixing, or anything else you can think of.

    My problem is that the industry is very slow right now, and I’ve been in business for over 35 years

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