July 25, 2012—The Nebraska Auto Body Association (NABA) on Tuesday announced its opposition to State Farm Insurance’s parts procurement system through PartsTrader.
The announcement comes on the heels of other organizations that also recently denounced the program, including the Alliance of Automotive Service Providers (AASP) of Illinois and AASP of New Jersey. The NABA cautions collision repair shops to consider PartsTrader’s potential business impacts, such as additional administrative times and costs.
Norbert Zaenglein, director of the NABA, said all U.S. states have ineffective regulations for market conduct, which gives insurers free rein over the collision industry. He said state regulation of insurers’ claims settlement practices is seriously compromised, and the catalyst for several foundational problems faced by repairers.
“Lack of regulatory oversight allows insurers to take more and more control over the collision repair industry from influencing estimating databases, manipulating labor rates and controlling the repair process. Repairers who believe that this will be the final encroachment into their business are seriously mistaken. The squeeze by insurers will be relentless, and claimants will pay the price in terms of repairs that do not restore the vehicle as promised under the policy of insurance,” Zaenglein said. “Without adequate regulation of the insurance industry, it is up to shops to stand up to intrusive mandates by the insurance industry and get actively involved in fixing a very broken insurance regulatory process.”
State Farm launched its pilot program through PartsTrader earlier this year. The program requires shops affiliated with State Farm’s Select Service direct repair network to source parts from vendors through a Web-based process facilitated by PartsTrader. Repairers submit parts orders through the system and vendors bid for the sale.
State Farm has said the process should improve part availability, process efficiency, order accuracy and create a better experience for customers. The pilot is being conducted in four U.S. markets—Grand Rapids, Mich.; Tucson, Ariz.; Birmingham, Ala.; and Charlotte, N.C.
