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Tuesday, 25 November 2014 00:00

More Lawsuits Filed in Additional States Against Nation’s Top Insurers

Nearly 500 collision repair shops across the country have now joined the anti-trust Multi-District Litigation originally filed by five states in April against the nation’s top insurers. Over the past month lawsuits have been filed against insurance companies in the additional states as part of “The Movement” by body shops to take back control of the industry. Recent reports have stated that body shops in at least 35 states turned in paperwork by the Oct. 31 deadline. When Autobody News contacted lead attorney John Eaves, Jr.  to learn the results of the most recent court hearing scheduled on Nov. 14 in Orlando, he reported that the judge took the hearing under advisement.

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“This whole thing is not about us body shops. This is about the consumer,” said Ron Perretta, owner of Professionals Autobody Body in Pennsylvania. As an active participant in “The Movement,” he said, “What this is doing is it’s not allowing the body shop to fix consumers’ cars properly. This isn’t about us.”

Perretta and Tony Passwater, Executive Director of the Indiana Autobody Association and President of AEII Consulting Services, have traveled across the country talking to shops and helping them understand “The Movement.”

“We believe that direct repair needs to stop. Direct repair is nothing more than something that was formed to be able to control our industry,” said Perretta. “The direct repair was not formed to make it easier, better, quicker for the consumer.”

After 35 years in the business, Perretta said he has never seen the industry in this state. “I grew up in this industry taking pride in what I do, doing safe, quality repairs. That’s what they’re trying to take away from us because it’s cheaper to do it that way,” said Perretta. “But they are putting the consumer at risk because of the way these repairs are being done.”

Perretta acknowledges that many shop owners are fearful that the insurers will steer work away from them. “They’re scared for their families because if they don’t have work, then their families can’t eat.”

However, he said shops have a choice. “They can either do it the right way or do it the wrong way. There’s no in between. But when they choose to do it the wrong way, they’ve made that choice.”

State Farm Responds to MDL

“We anticipated the possibility of additional litigation similar to what had been previously filed, given the deadline for filing these complaints,” said Dick Luedke, spokesperson for State Farm Insurance. “State Farm is a defendant along with dozens of other insurers in the litigation relating to issues that have been raised by some auto body repair facilities.”

Luedke said State Farm has excellent working relationships with thousands of body shops across the country and they serve millions of customers who consistently indicate their satisfaction with their handling of claims. He said the just-released American Customer Satisfaction Index from the University of Michigan rates State Farm above all other national insurance companies. In addition, he said the company has consistently scored well above average in the JD Power auto claims satisfaction surveys. Among the 23 auto insurers included in the latest survey, State Farm was third, said Luedke.

“As a leader in advancing vehicle safety, State Farm wants safe and reliable vehicles on the road,” said Luedke. “Customers are free to choose where to take their vehicle for repair. If they choose an independent auto body repair facility that takes part in our Select Service program they receive from that repair facility a national, limited lifetime repair warranty, something they don’t necessarily receive from a repair facility that is not part of our Select Service program.”

The ‘Movement’

Perretta said the next step for the ‘Movement’ is to continue encouraging more shops to get involved. “If they feel the way I feel and a lot of others feel, the only way to stop that is to get on board with us,” said Perretta.

Meanwhile, shops are gathering documentation on the allegations being made. “It’s not a matter of what we say. It’s a matter of what we give them and show them.”

Another trip to Congress is also on their agenda. Autobody News reported on their September trip to Washington D.C. in the (last) November issue of the magazine. The goal is to educate the house and senate about the 1963 Consent Decree, in hopes of getting the law enforced by U.S. Attorney General nominee Loretta Lynch.

Autobody News will continue to follow this story and keep readers up-to-date about developments with the lawsuit.

More information about ‘The Movement’ can be found online: www.TakingBackOurIndustry.com

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