A Letter from Allstate

[Tow411]

This was a Topic of Discussion on Tow411 in 2008:

 

Charlie Rittenhouse:

Received letter today from allstate they are now putting my area up for bid. letter is real vage wants price bid western suffolk which is huge area.According to the letter if i win the bid i am guaranteed the 1st call everytime. i must answer 90% or better call volume have less then 60 minute eta. I am allreday the primary in my area with 98% call answer. I am guessing now that they combined with GE i know have to have a bidding war with there primary.

 

GEMMATOW:

i got the same letter, allstate wants my to handle all of nassau county, what a choir that would be,will all the traffic conditions & not too mention severe weather conditions,on long island

 

WEBOSLH:

Charlie, this isn't directed to you personally, only at what I see as an avenue for the cheapening of the towers for allstate.I haven't gotten the "packets" or the "letters", but if they want me to bid on my area , however big it should be, I'll bid twice my retail rate. That way when the primary is too busy to catch all the runs, or burns out , all they have left is ME. So I'll be able to do one run and make twice the money and profit. And what the primary makes in two runs ,with twice the expenses ,and maybe half the profit he should get from one run.
On some bids , it may not always be good to select the cheapest bidder. What if the primary can't keep his end of the contract? Is he sent down to the minors? (Good grief , what could be lower than _____.?) Then does the "other" provider become the primary? How long is the contract good. How long does the award winning lowest bidder got to work for peanuts before he can ask for a raise? If an award is given to the lowest bidder, what is to keep allstate from going after an even cheaper provider. Can the first Primary be under cut and made a back-up? What about the contract stating an"exclusive" area and rate?
Why not just raise the premiums across the country one dollar on each person covered by allstate. Take that money to pay truly fair and profitable rates to their providers. Then this potential can of worms will never be opened.
Oh! Silly me! I forgot we're dealing with an INSURANCE COMPANY, and we have all done that!

 

tlw towing:

I just talked to my allstate rep the can of worms is open already! He told be they are doing it in some areas and likely will expand it.

 

ExpressTowAaron:

We quit Allstate as soon as I got my letter saying they were lowering my rates because I used to be a GE contractor and they paid me less... It is very funny when Allstate calls, we refuse and then we mysteriously get a private call 45 mins later for the same car in the same place.

 

tlw towing:

Got my letters today! Allstate lowered rates to Ge rates.

 

GEMMATOW:

not for nothing but in my opinion, the reason why us towing companies, find it harder to get better rates is because the roadside assistance only companies do our road calls for less &, take away at least 40 % of our once profitable business !!!

 

Charlie Rittenhouse:

i agree thr e roadside assist company's showing up in hyundai's in my area take 5000 calls a year Allstate says they use them because they found a drop of 10% in cars being towed useing roadside only. they state that they feel we would do a fake jump recommend a shop and get a kick back.

 

annettemcd:

It goes back to the issue that the motor clubs do not trust the towers. They question our mileage on tows and they think that we will fake a jumpstart to turn it into a tow. Plus who gets kickbacks from shops? I certainly don't. If the motor clubs can trust us to handle the expensive vehicles of their clients, why can they not trust our dealings with them?

On the other hand, how many towers have handled jobs where a jump didn't work and the vehicle needed a second call for a tow?

Most towers that I have talked to recently do not respond with a tow truck to a jump anyway, unless it is dispatched as a jump/possible tow or a long distance call where the reason for the need for the jump is unknown. Why drive a tow truck, if you have a service vehicle that can respond and I would imagine that most towers now have service vehicles in addition to their tow trucks.

I think some of the reasons that roadside only businesses offer lower rates is because they do not have the same levels of expenses, but I think that there is also a major possibility that some of them have business plans which are not well thought out and they are operating at low or no profit and may not even realize it yet.

 

 

Angeltowing:

The problem with the roadside only companies is us towers. We let the clubs change there original call volume %s with out renegotiating our rates. I know when I negotiated my rates a lifetime ago I was told by the reps that you can tow for a little less and get the volume on the roadside assist calls. They had a revenue per call mentality. That worked throughout the early 1990s. We would make a profit because our call volume would be up, and a good percentage of calls were jumps and lockouts. I didnt have to add trucks to do volume. When the roadside companies came along we lost the profit. The revenue per call was not negotiable. You know the old " you are the highest paid in the area" line. We were still getting $xx.xx for tows. The only thing is,now it is 100% tows. No more roadside. Now to get 20 calls done in a day you need 2 trucks. Back then 2 trucks could do 40 calls. I miss towing for the motor clubs and MAKING A PROFIT.

Hey Charlie, I also had gotten that letter. Havent had a chance to look at it but dont worry, I think the double retail idea may be a good one. I wont under bid ya, I promise.

One thing we all can do is insist on contracts with term limits. Why have a contract that never comes to an end. If you are handling a lot of calls for a club and your contract is about to expire they will be willing to negotiate. Lets face it, they are going to look for the cheapest guy anyway, but if they need you they will negotiate. Isnt that how everyone else negotiates a contract. Think about it. Do you ever here of a Baseball player with an unlimited contract with no term. Why do we let no term contracts be the standard for our business.
Sorry for the rant. Just my thoughts.
Mike

 

13thrattler:

I got my letter today through e-mail. They want me to bid on my own area.
OK------------I'm the only one in this area-------------SO----------I'm going to bid $10.00 more on the hook-up and 0.50 more on the mileage.

Let's see if they send me any more stupid letters.
Gilbert

 

myerstowing :

I have never heard of a motorclub putting out a bid? Unless it was AAA or something, does that mean if you "win" you enter a contract, not an agreement?

 

firemedic:

Gilbert, I also got mine this evening through the email. I was going to trash it because I am the only one in my area also, but I think I will do like you, bid more and see what they say. Bet I get a call or a letter telling me they will not use me anymore. Call volume areas? Not me, maybe 8-10 a month in my area, the rest out of area, but areas I am sometimes at so I get those also cause they don't have anyone out there.

 

Annettemcd:

Ha! firemedic you call that rural.

I would be happy with half that many calls in a year. I can not remember when I last had a call from Allstate or GE/Financial in my area. I do not think that there has been more than one this year (and I do not think that a significant number are going to other towers).

 

 

firemedic:

Yeah, but I am somewhat near a civilized world. Just kidding.

Honestly, I applaud you for being able to live and work in Alaska. Beautiful country, my cousin was a state trooper up there near Anchorage after getting out of the Army. I visited once and loved it, but I grew up on the Texas coast, it was way too cold up there for me. Heck, I lived in Oklahoma for a year and you could tell I was from Texas due to being the only one bundled up in September.

I do have a rural area for my part of the country, but you are right you have me beat. Have you gotten a letter yet?

 

13thrattler:

Annette, you are not rual, you are remote. Which is just this side of LOST.

Gilbert

 

Annettemcd:

Yep, sometimes I miss the civilized world. No, I haven't gotten a letter yet to bid for my area. I am not holding my breathe either.

Does your cousin still live up here in the Far North? You should come visit some time. (It gets into the 90s in the summer. (Really!))

 

firemedic:

Annette, I haven't talked to him in about 4-5 years, I think he does, just don't know where.

 

Unknown:

Well it happened to us also we received another dreaded halfA** written email from the above motor club today . We Started out in Shock but should have seen it coming , Listen Allstate Just payed alot of money for these guys , they want to keep their jobs , So let's do it on the backs of the towers AGAIN!
Anyway , THIS CAN OF WORMS IS OPEN . If they manage to get the towers to lower their rates through a bid process and save money , than , MAKE NO MISTAKE, All the motor clubs will follow !! This will be just the start of it , you think Cross country rates are bad ,you haven't seen nothing yet ! In some states what they did with the contacts you had and forcing the lower rates on you is illegally but now that the are one and moving toward a bid not much you can do !! EXCEPT !! Use you head and good business sense bid at a rate that you can make a living at and feed your family and employees at . Don't fall for this You will get top priority CRAP( for how long ) . This is all about PRICE, not service or anything else . They will carry this to the people who give them the contracts(aarp , ins companies etc ) and tell them the towers will do this and this is what WE agree to do in exchange .

 

myerstowing :

Well I got the Email today, in California it has now hit coast to coast, so Annette Alaska may be next! How long does it take to send an email to Alaska? Just kidding. I am going to send it in with much higher rates, let the others burn out and I will take the $$ calls? I dont understand how they want their "bid"? The email doesnt have much information.

 

Unknown:

Please everyone , some good insight here , If they manage to drive the price down with a bid the road will get worse for everyone , all M/C will follow !!

That dont count on you bidding like you are running a business , they count on you bidding like it is ok to do the work as long as you have a little money in your pocket to pay for fuel . Use Your Head , Look at The Numbers !! Not just the Volume thay promise .

Remember the old saying , you cant buy watermelons for a dollar and sell for a dollar and make money !! (even with and bigger truck to haul them ! ) it is still and dollar for a dollar and YOU did all the work for nothing ...

 

Atrmick :

They just sent us a rate agreement. Heck of a lot better than Cross Country. We will give them a try and see how they do when comes to paying. With CCMC we have had very little problems. So far I have always received calls back from our rep if I needed to talk to them.

Here is the bottom line for us. When we no longer like the deal we are getting from them, then we will stop doing business with them under their rates.

 

@Charlie Rittenhouse @Gemmatow @annettemcd @Angeltowing @myerstowing @Firemedic @atrmick