Running a Shop Law

ASA Contacts State Farm in Response to Vendor Requirement

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Sept. 16, 2013—In a letter to State Farm CEO Ed Rust Jr., Automotive Service Association (ASA) president Dan Risley expressed the organization's position against "insurance company mandates that limit a repairer’s right to choose their vendors, distributors and suppliers."

State Farm recently announced a national roll-out of its PartsTrader parts procurement system for members of its direct repair program, a move that has received quick and harsh criticism.

"Change is needed," Risley wrote in the letter dated Sept. 11 and release_notesd to ASA affiliate associations on Sept. 13. "Insurance company mandates such as this one clearly place collision repairers at a disadvantage." Risley goes on to say that this interference from State Farm has gone to far and the process is “more dictatorship than partnership.”

The letter goes on to say that the ASA plans to “collaborate with state and national regulators and policymakers to determine whether or not this programs has violated any state or federal laws.”

The ASA remains open to meeting with State Farm to resolve these issues, Risley states in the letter, but also suggests that State Farm immediately eliminates the mandate requiring shops to use PartsTrader and begin encouraging the use of this program on a voluntary basis with financial incentives. The ASA suggests that the State Farm scoring system should focus on rewarding shops that lead the market in parts cost, alternative parts usage, length of rental and cycle time; all of which drive overall repair costs down.

The ASA urges collision repair shops to continue operating as normal and take care of State Farm policyholders without bias.
 

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