The Connecticut Supreme Court has ruled that a lawsuit, filed by auto body repairers alleging that The Hartford Fire Insurance Company (Hartford) improperly steers customers to certain repair shops, can proceed as a class action. The Auto Body Association of Connecticut (ABAC), along with three Connecticut body shops, sued Hartford in July 2003 alleging that the insurance provider “engaged in a pattern of unfair practices” in violation of Connecticut state laws. According to the lawsuit, Hartford steered its customers to its preferred direct repair program shops rather than allowing its customers to freely use the repair shops of their own choosing.
In addition, Hartford is accused of concealing body shop labor rates by eliminating the use of independent appraisers. The suit alleges that Hartford relied exclusively on its own automobile service representatives to perform appraisals and, by doing so, Hartford was able to control the overall content of the report, including the amounts to be paid for labor. This tactic resulted in customers not getting fair and independent appraisals of the damage done to their automobiles, according to the lawsuit.
In support of their claims, the repair shops presented evidence showing that when customers requested repairs, Hartford employees known as “customer care specialists” were instructed to refer the customer to a preferred shop in Hartford’s “customer care repair service program.” The suit also alleges that customers were pressured to abandon their choice of repair shop in favor of a Hartford preferred shop. Thomas Bovina, past president of ABAC, observed:
Insurance companies carjack customers by steering them to repair shops the companies prefer – shops that may install aftermarket or used parts. Using these parts may void a new car warranty – something insurance companies neglect to tell consumers. Consumers don’t see that company-preferred shops may cut corners on repairs, perhaps using inferior parts.
This case will be watched closely. Over the years, we have run into this sort of thing involving other insurance companies and repair shops. Many believe this is a common practice. If so, governmental regulators should put a stop to it.
Source: Associated Press
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