Former Progessive Employee: Insurer ‘Intentionally’ Steered Customers
May 22, 2015—A sworn affidavit from a former Progressive estimator accuses the insurer of “intentionally” steering its customers away from a multiple-location collision repair business in Tennessee and says that Progressive employees were evaluated directly on their abilities to steer vehicle owners to the insurer’s direct repair facilities, according to documents obtained by FenderBender.
Progressive has not responded to a request for comment.
The affidavit is being used as evidence in a suit filed by a multiple-location repair businesses in Tennessee against more than a dozen insurance companies. The complaint, along with another from Tennessee shops that was amended and refiled on April 27 to include an additional repair business, is part of a nationwide string of suits that has been consolidated to a U.S. District Court in Florida. The overall case includes suits filed in more than 35 states.
Edwards stated, “In my opinion, Progressive employees did intentionally steer insureds and claimants way [sic] from Price’s Collision Center.” In the affidavit, David Edwards, a 17-year employee of Progressive, laid out details of what he alleges to be systematic steering by the insurance company, and called out specific Progressive managers by name for making defamatory comments against Price’s Collision Center, a Nashville-based MSO that Edwards was assigned to in his “Manage Repair Representative” (MRR) role.
“In my experience, it was unusual for an MRR like myself to be assigned to one series of shops, especially given how far away Price’s shops were from one another,” Edwards said in the document.
Edwards accuses Progressive supervisors, managers and employees of making derogatory comments about Price’s, telling customers that the MSO is slower and more expensive and would “leave the insured potentially liable for the cost of a repair that was not ‘guaranteed.’” He also experienced direct conversations with managers in which they directly shared their distaste for the company.
Progressive employees would then talk positively about its own network facilities to sway the customer’s decision. This was all intentional, Edwards said in the affidavit, as the company evaluated its employees on their abilities to bring work to Progressive’s network of direct repair shops:
"During the relevant time period, Progressive inside adjusters were evaluated on the percentage of insureds and claimants that bring their vehicle to in-network shops. As a result, it would count against an employee’s evaluation if he or she was unable to convince an insured or claimant not to go to an out-of-network shop such as Price’s Collision Centers, which in turn could affect the employee’s compensation or continued employment.
"It is my understanding that Progressive desired all claimants and insureds to patronize network shops. Progressive used its leverage of the volume of its network referral business to manhandle network shops."
The lawsuit includes multiple accusations against insurers, including steering, short-pay issues, and price-fixing.
The refiled suit in Tennessee focuses on multiple insurers but, based on the affidavits of former employees, accuses State Farm of leading an industry-wide push of clamping down payment to repair facilities:
"A State Farm employee has admitted that State Farm sets the rates for the entire industry, that it 'dictates the market,' that State Farm stands for 'controlling the market' and the other insurers follow its 'lead.'"
The consolidated case in Florida has yet to reach the pre-trial discovery phase, at which point the legal team representing the plaintiffs will get access to records and information held by the defendants. The case, which picked up steam in early 2014, has been delayed repeatedly by motions to dismiss from the defendants, forcing the plaintiffs to refile amended complaints.