PCTG Consumer Complaint Report Record ID#: 685439073

Department of Insurance: On February 25, 2009 at 1:53 pm State Farm Staff appraiser James Guthrie signed in at our facility to inspect a supplemental assignment on our customer's 2005 Honda Hybrid, which had sustained front-end damage. The repairs required a radiator support replacement and we explained the need for Adjacent Weld Zone repairs and refinishing which Guthrie had not included on his original estimate. Guthrie advised he had already paid for this procedure on his initial estimate however, I explained that although he addressed a minimal reimbursement for the refinishing process he neglected to address the repair of the damaged Adjacent Weld Zone repair areas. He then commented that labor to repair Adjacent Weld Zones are included in the automated data base times. I explained they are not and that we had discussions with another State Farm appraiser a week earlier on a similar repair order and that appraiser had taken our nonpayment issues to his trainer and then to his Supervisor Ron Costagliana for clarification. The appraiser contacted us the following day to advise State Farm will not recognize the Adjacent Weld Zone repair process. I explained to Guthrie that we had contacted the estimating software provider, AUDATEX and asked them to explain the INCLUDED and the EXCLUDED operations in their database labor times regarding weld zone damage. AUDATEX responded with a clear written interpretation of this operation as an "Excluded operation" to be recognized separately and reimbursed independently of the labor to install the radiator support. Guthrie advised that State Farm recently had a meeting on this topic due to pressure from the collision repair industry and State Farm's position is that the repair of adjacent weld zones are included labor operations within the database labor times. I provided a copy of the reference document received from AUDATEX, which explained the labor exclusions. Guthrie then explained that the adjacent weld zone repair labor was included with his refinishing labor. I disputed his comment as they are not the same task identified differently within the database, which addresses both repair and refinishing tasks as excluded operations. Next Guthrie tried to explain our request to be reimbursed for the procedures as not competitive within the market proclaiming shops local to our facility do not charge for this procedure. I explained that if other shops agree to subsidize labor procedures for State Farm or they are oblivious to the database procedure pages and not realizing the need to charge for excluded operations that is their business and has no reflection on the proper interpretation of the estimating guide. The AUDATEX labor guide allows for the charge and State Farm Insurance Company has selected The AUDATEX Estimating Guide to utilize for their estimates. State Farm cannot insist shops accept the AUDATEX estimating system then dismiss and deny compensation for fundamentals of the database they don't agree with. Guthrie refused to reimburse for the Adjacent Weld Zone repair and proper refinishing procedures however he advised he would check with his supervisor and people who administrate State Farm's guidelines and call us in the morning to re-evaluate his ability to reimburse for the adjacent weld zone procedures. As of February 27th Guthrie has not contacted our facility regarding the repairs. >>>>>>>> Adjacent Weld Zone Damage EXPLANATION: A collision repair facility's right to be reimbursed for the Adjacent Weld Zone repair operation is easy to understand " Estimating Guides for which there are three nationally recognized companies. AUDATEX - CCC PATHWAYS " MITCHELL Base their labor times and installation procedures on new undamaged vehicles using new undamaged parts. For this reason, anytime an adjacent part becomes damaged due to a new part being welded and attached to the existing panel, labor to repair the existing panel needs to be addressed. Estimating databases cannot take into consideration repair labor to repair adjacent panels that become damaged due to welding as each operation is different and each repair process dissimilar. Software companies that publish the estimating guides realize they need to state repair labor is a judgment item to be agreed upon by the repair professional and the appraiser outside of any automated data program. Similar to the repair of an exterior body panel or frame rail where the expertise of the repair professional is taken into consideration at the time of the appraisal.<<<<<<<<''' The above explanation is contrary to State Farm's market behavior due to the insurance company's ability to say "no" "we will not pay for the process" and the Department's reluctance to compel State Farm to comply with state laws and regulations. State Farm can spin their reasons for non-payment and insist their appraisers deny reimbursement however when the Department investigates this complaint they will find we are correct and the insurance company is using their vast market power to deny necessary reimbursement. Insurance companies insist the collision repair industry accept their estimating programs as methods to settle claims for policyholders and claimants however they also want to manipulate the estimating programs to underpay the losses. This adjacent Weld Zone reimbursement is an example where consumer's claims are being settled improperly. State Farm cannot be permitted to deny coverage for a procedure that has to be performed? Mr. Ron Costigliana is included with this complaint due to his supervisory position over James Guthrie. As a state licensed appraiser Supervisor Costagliana is aware of Guthrie's responsibilities as a state licensed independent appraiser and should be included with this complaint. Guthrie has advised he is following State Farm's estimating guidelines as per his manager's instructions. State Farm's refusal to reimburse for adjacent weld zone repairs are not in compliance with Pa. State Law and Regulations. Please investigate our concerns and stop the underpayment of State Farm claims across the Commonwealth.'' Thank You, Stephen E Behrndt, President Crawford's Auto Center, Inc.