Ray Gunder, owner of Gunder’s Auto Center in Lakeland, Fla., increased his standard door labor rate from $42 to $48 per labor hour, a 12.5 percent increase.
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Gunder, who has been in business 44 years, said he did this in June because the current labor rates being offered by insurers were insufficient to sustain profitability and continued growth.
“It had been almost six years since rates had moved; driving our net profit into a danger zone," Gunder said. "Our business and our techs struggling financially left me with no options. I felt that for my company and its team members to keep up with the rising costs of living and for us to keep abreast of ever increasing operational costs, raising our labor rates was necessary."
Gunder’s new rates were posted in the shop's reception area and each claims person and appraiser who Gunder’s dealt with were informed of the new rates. This increase, which Gunder considered minimum, was considered by many insurers to be substantial and was met with anticipated resistance.
Many insurance companies made their concerns and objections known but elected to pay the higher rate. Those insurers include MetLife, Kemper Services, Westfield Comp., Auto Owners, Acceptance Casualty, Liberty Mutual, Amica Mutual, Horace Mann, The Hartford and Direct General.
However, these six insurers have yet to pay the increased labor rate willingly: USAA, GEICO, State Farm, Allstate, Infinity and Travelers.