Your Money: One-Stop Car Insurance Service, Body Work Included

FORT LAUDERDALE, Fla. — Several insurance companies have decided their old strategy for handling car-damage claims is in need of repair.

Rather than putting the onus on customers to find a body shop, get an estimate and arrange a rental car, Progressive, Geico and others are setting up one-stop service centers to handle every aspect of the claim.

The centers are emerging as a new competitive arena among insurers. And while consumer advocates applaud the new convenience, they also see a conflict of interest.

The downside is that youre turning over your car to somebody who has a vested interest in maybe chiseling you out of a couple of bucks, said J. Robert Hunter, the insurance director for the Consumer Federation of America. Mr. Hunter suggested that customers get an independent assessment of damage and repairs.

The insurers acknowledge that they negotiate with repair shops for the lowest possible price. And they say the new centers benefit them as well as their customers: the quicker the insurers get damaged cars back to their owners, the less the insurers have to spend on rental cars.

But they say their objectives of getting old customers to renew coverage and attracting new ones would be defeated if they were found to be short-changing customers.

We want a fair price to repair cars at the highest standard, and we want to keep our customers, said Brian Passell, chief of claims for Progressive, the nations third-largest auto insurer.

More insurers are fighting over those customers. The auto coverage business, with about $160 billion in annual revenue, has become highly profitable as prices have risen and costs have declined because accidents are fewer and less severe.

These companies have long had a contentious relationship with repair shops. They provide these shops with more than 90 percent of their business.

But the shop owners also complain bitterly that the insurers have been steadily offering them less money for their work and that quality has suffered. The insurers say that they guarantee repairs for the life of a vehicle and that they do not give repeat business to shops that do not meet their standards.

The body shops also contend that in violation of insurance regulations, insurers try to steer policyholders to the one-stop centers and to the lowest-cost shops.

Mr. Passell said Progressive recommended its new centers as the very best level of service there is, but that customers could also get cars fixed at any shop they chose.

Youll never have a satisfied customer if you push them to do something they dont want to do, Mr. Passell said.

Partly because of the tension with the body shops, the insurers started setting up these service centers in a few cities. The feedback has been good, they say, and they are now expanding and starting to promote the new service in advertisements.

Progressive, which was the first to try one-stop service, opened 29 centers last year, for a total of 62. And Mr. Passell said he hoped to eventually offer the companys concierge service to 80 percent of its customers.

There are 295 Geico Express centers around the country, with 50 more to be opened this year. Travelers is offering its version of the service at 39 locations, and plans to add 5 to 10 more every year. Geico is a unit of Berkshire Hathaway.

More than a dozen people who took their cars into consolidated centers in South Florida said in interviews that they were pleased, even when the repair work was not quite up to snuff.

When Jennifer Chance arrived at the Progressive center west of here in the town of Tamarac to take home her pickup truck — when Progressive said it would be ready — she found that the panel on the drivers side door was missing several screws and flapping loose. So the pickup had to go back to the repair shop.

Trying to make up for the inconvenience, Progressive gave her an upgrade to a bigger rental car and asked her to come back the next day. She could not return then, and Progressive said she could keep the rental car for another day. For her, Progressives cheerful staff kept things from turning sour.

This is definitely better, she said of Progressives program. They were all very nice. I know if I have a problem I can just go back to Progressive and not have to argue with the shop people. Plus the shops are always back in the warehouse districts or wherever.

Bob Lieberman, a business consultant and car buff, was also disappointed when he went to pick up his Mercedes. He found a new dent in the door on the drivers side. It took several more days to get his car, but he said he was still happy.

Ive owned over 100 cars and made many claims, he said. Often, he said, insurers and body shops treat you like youre guilty.

Here, he said, theres nothing but smiles.

For most of the customers interviewed at the Progressive Center, there were no snags. Nancy Ahrens dropped off her damaged Chrysler convertible one afternoon and drove off in a rental car about 20 minutes later. She picked up the car on schedule a few days later and, she said, it looked like new. The convenience of having everything right there and not having to go running around town, she said, was really good.

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