Changes in collision insurance

Alex Cohen May 30, 2006


MARK AUSTIN THOMAS: Do you do a lot of driving for business? Well there are some changes taking place in the auto insurance industry that you should know about. Alex Cohen has the details.

ALEX COHEN: For the past few months, State Farm, the nation’s largest provider of auto insurance, has been telling collision repair shops they’ll only work with them if they offer the same discounts on labor rates that they give to smaller insurers.

That means, collision repair shops may eventually put an end to discounts and drop smaller insurers to keep State Farm as a client. Denise Caspersen of the Automotive Service Association says that could leave consumers with a tough choice.

DENISE CASPERSEN: In the end it will be the consumer who either chooses a top tier insurance provider or a second-tier insurance provider for lower premiums and then gets second tier work.

State Farm is only doing this as a pilot program in four states, but other large insurers are considering a similar move.

I’m Alex Cohen for Marketplace.

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