Car repair shops say auto insurance companies are coercing them to use cheap parts and sometimes dangerous practices to fix vehicles involved in accidents.
Headlights held together by glue, dented rims and a new hood that’s already coming apart are among the kinds of parts allegedly being pushed to go into cars as part of the repairs, according to some repair shops and attorneys general.
Owners say the insurance companies steer their policy holders toward body shops that follow their rules, providing a vital source of business. And they add, if a body shop refuses to make the suggested repairs because of quality issues, the insurers steer their clients elsewhere.
Major insurers deny the claims of impropriety.
More than 500 garages from 36 states are joining in a lawsuit against the top insurance companies, and states like Louisiana, Mississippi and Oklahoma are also getting involved.
Buddy Caldwell, attorney general of Louisiana, has filed suit against State Farm insurance, saying its low-cost repair program could be dangerous for customers who get back on the road in vehicles that are not roadworthy.
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He declined to comment on recycled parts — such as the broken headlight CNN saw — saying he did not know the circumstances.
Alldredge said he did not believe “steering” was happening. He said a benefit of a preferred-shop program came for customers getting repairs done quickly, but it was always a customer’s choice.
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“The insurance company may provide a list of auto body shops, and the customer can say, ‘No. I wanna go to Joe’s Body Shop around the corner.’ And that’s their choice. The issue of steering is already something that’s not consistent with state law and not something that insurance companies do,” he said.
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