Okla. Collision Company’s Closure Strands Customers, Workers

November 1, 2007

Customers who took their vehicles to a Fox Collision Center in Oklahoma were encouraged on Oct. 30 to contact their insurance agent or claims adjuster after the company closed its stores across the region.

The owner of Fox Collision Centers Inc., Todd Fox, issued a letter to several media outlets saying increasing demands from insurance companies forced him to close 18 Fox stores in four states.

“Though all of our shops are busy with work and in good standing with all concession-based and non-concession-based (direct repair programs), I am sad to announce that today I will close all 18 of our locations,” Fox wrote. “Hundreds of people will lose their jobs. I am so sorry, sad and discouraged.”

Fox Collision has two stores in Oklahoma City, five in Tulsa and stores in Norman, Edmond and Midwest City. It also has repair shops in Kansas and Arkansas.

Fox couldn’t immediately be reached for comment. Phones went unanswered at Fox stores in central Oklahoma.

A woman answering the phones at a Tulsa store said new owners had taken over one store in Tulsa and one in Wichita, Kan., but the rest remained closed. The former owners plan to issue a news release later this week, she said.

Much of Fox’s 2,100-word letter railed against the practices of the insurance industry, especially the “direct repair programs” where insurance companies work out reduced fees for repairers’ work in exchange for customer referrals.

“Insurance carriers have leveraged their economy of scale to implement concession-based (direct repair program) contracts and forced collision repair businesses to offer the cheapest and quickest repair possible, many times sacrificing quality, safe repairs,” Fox wrote.

But Insurance Commissioner Kim Holland and other collision repairers said direct repair programs can help consumers.

“Through direct repair programs, insurers and body shops agree to service rates that result in lower-cost repairs and lower insurance premiums,” Holland said.

Fox, 43, bought his parents’ body shop in Wichita, Kan., in 1989. He later moved to Tulsa and expanded the Fox chain to three states and annual sales of more than $28 million, his letter said.

The Society of Collision Repair Specialists, a national trade group, recently surveyed its members on insurance issues. There is enough blame to go around on both sides, the society said.

“Most repairers don’t consider insurers to be their partners as the relationship has become strained, more than any time in recent history,” said Tim Waldren, the society’s treasurer. “The erosion of good will is due to a lot of things, but the fact that steering’ and suppressed labor rates’ were cited by our survey as the most pressing issues facing repairers speaks volumes.”

Steering involves an insurance agent or insurer representative encouraging a customer to use a competitor after they have already selected a repair shop.

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