HICKORY, N.C. — Michael Bradshaw has been with K & M Collision in Hickory for 20 years. His shop has an A+ rating with the Better Business Bureau. He’s Chairman of a national organization — the Society of Collision Repair Specialists — which says they represent more than 6,000 shops.
Bradshaw says State Farm is now paying less for body shops to recalibrate safety features after repairs. He says it’s happening at his shop and that others are telling him the same thing. He says the company is also lowering — or scrubbing —estimates that its own adjusters came up with.
“So each and every time something agreed upon gets deleted, and we have to reengage in that process, it adds another five to seven days,” he told Action 9 attorney Jason Stoogenke.
The way he sees it: drivers have to wait longer and maybe pay more out of pocket. Now that cost becomes a burden for the consumer," he said.
Bradshaw says State Farm is cutting how much they pay for labor, as well.
“If they were paying certain businesses $62-$64 an hour for labor three years ago, they’re now paying $54-$56 an hour for labor,” he said.
Stoogenke asked, “How does that compare with like Allstate and Farm Bureau and Geico, do they generally pay more than 50-something?”
“Yeah, absolutely,” Bradshaw replied. “The type of reduction -- or a reduction period -- is pretty unprecedented in our industry.”
Stoogenke wondered if maybe State Farm had been paying more than their competitors and was now bringing their prices in line with everyone else. Bradshaw and insurance adjuster Billy Walkowiak both said no.
Stoogenke asked, “So this isn’t righting the ship. This is actually lowballing?”
Walkowiak said, “Correct.”
It’s hard to know exactly what other insurers pay. That’s not information they typically disclose publicly. One company emailed Action 9 they don’t share “competitive information.”
You may be thinking: obviously, body shops — like Bradshaw’s — want insurance companies to pay more. But he argues this impacts drivers as well. “I go back to the families that need their car, right? They want their car repaired in a safe manner because they want everybody in their family to be safe when they travel in that vehicle. And they paid their premium, many times, year over year over year,” he said.
Stoogenke emailed State Farm, asking specifically whether they’re
- Cutting labor rates,
- Revising the estimates that their own adjusters came up with, and
- Paying less for safety technology recalibration.
The company didn’t directly address any of those questions.
They responded, “State Farm is there for our customers and pays what we owe within the terms of our auto policy. If a body shop has concerns, we encourage them to reach out directly to us so that we can have a conversation.”
Advice:
- All the more reason to pick a good body shop, one that will go to bat for you.
- Read your policy’s fine print, especially the appraisal clause. That’s how you dispute the insurer’s decision.
- If you aren’t happy with your insurance, shop around. But be aware that if you switch companies before your policy is up, you may have to pay a penalty.
>>CLICK HERE for more Action 9 reports