“Dedicated to a proper repair, in a timely manner and at a reasonable price.”
Bedford Hills: 914.242.4600 ★ Mt. Vernon: 914.667.8000 ★ Peekskill: 914.737.3159

Why Insurance Companies Don’t Want You to Use an Independent Auto Body Shop

Bottom line: They save money by steering the policyholder to their preferred shops.   In 2013 a Connecticut Superior Court judge slapped The Hartford Fire Insurance Company with $20 million in punitive damages from a decade-old, class-action lawsuit brought by the Auto Body Association of Connecticut (ABAC) and several individual body shops.  This came on top of the $14.7 million in compensatory damages a jury in the lawsuit awarded the repairers (about 1,500) in 2009.  

In the class action lawsuit The Hartford was found guilty in engaging in a pattern of unfair and deceptive acts and practices, violating state law, by steering customers who had been in a crash to certain preferred auto body shops. The lawsuit also found The Hartford guilty in providing incentives to its appraisers to establish artificially low hourly rates for auto body repair work.

The truth is that insurance companies steer repairs to one of their shops, where they can dictate the terms of the repair, i.e., aftermarket parts, substandard materials, frugal repair procedures, and not necessarily providing for an entirely proper and safe repair. This is an ongoing and pervasive practice. 
I see this every day. A customer will stand by my desk, calling their insurance company to report a claim. 80-90% of the time, the insurance company will try to get them to use one of their repair shops. Although by law they are not allowed to do so, they continue to do it anyway.  The only time an insurance company is allowed to suggest a repair shop is when a customer asks for one.

Nonetheless, every insurance company participates in this practice. It seems that the only way to discontinue this practice is to bring a class action suit. However, this is not an easy task, as seen by the 10 years it took to resolve the CT lawsuit. The average small businessman doesn't have the time or money for such an undertaking. I can only educate my clients, one person at a time, about protecting themselves. When you receive substandard repairs, you compromise the value of your car and the safety of its passengers. Don't be manipulated by an industry that doesn't have your best interests at heart.

Don't compromise your family's safety, make your own choice as to which repair shop you want to use.

No Comments Yet.

Leave a comment