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Background: In May 2001, The Allstate Corporation acquired Sterling Collision Centers Inc., a network of 39 auto body repair shops. Allstate made the acquisition to ensure its policyholders and claimants have a high quality repair option from which to choose. The experience consumers have in auto body repair can affect their feelings toward their insurance company, which is why Allstate felt compelled make a direct investment aimed at improving quality in the auto body industry. Sterling is under different management and Allstate customers are not referred specifically to Sterling. They have the choice to use any collision repair shop they desire and state law prohibits insurers from steering customers to particular shops.
The primary strategy behind Allstate’s acquisition of Sterling is to differentiate Allstate from its competition by providing an option for consumers that is seamless and convenient, completing repairs quickly and putting drivers back on the road as quickly as possible.
Consumer Benefits: Choice Sterling expands customer choice by providing an additional option from which to choose.
The additional competition is good for the consumer and raises the stakes for body shops to provide quality, efficient repairs and achieve high levels of customer satisfaction.
Do Allstate customers and claimants have the ability to choose body shops other than Sterling?
• The customer is always the ultimate decision maker on where his or her vehicle is repaired. Allstate policyholders and claimants are informed in writing and verbally of their right to pick any repair facility.
• Sterling provides an additional option from which to choose. Customers can choose among insurer-owned repair shops, Direct Repair Program (DRP) participant shops, and independent shops for their car repair needs. In 2002, only about 6 percent of Allstate claimants had their cars repaired at a Sterling facility.
Are consumer protections already in place?
• Yes, consumer protections are in place now. No one has challenged the fact that Allstate complies with existing laws that prohibit insurers from “steering” customers to a particular body shop.
Consumers are best served when they have a range of choices from which to select their repair service. CSE believes that Allstate has expanded their consumer choices, has complied with state and federal laws, and should not be mandated to divest this investment in Texas.