Insurance company practices that deny consumers choice in car repair to be reviewed
On September 1, -- armed with petitions from auto repairers across the country
The Attorney General wants to stop insurance company practices that may deny consumers the right to choose their own automobile repair shop - I called on U.S. Attorney General Eric H. Holder, Jr. to investigate and to stop insurance company practices that may deny consumers the right to choose their own automobile repair shop.
My office will seek to enlist other attorneys general in my effort.
Several auto repairers and I believe practices that seemingly force or steer consumers to preferred repair shops may violate not only the law, but also a decades-old consent decree between the federal government and several insurance companies.
Nearly 50 years later, insurer steering remains a scourge. This outpouring of complaints shows that problematic practices persist, despite a 1963 consent decree and current law. Auto repairers and consumers are victims of the very same misconduct today as they were back then: insurer control of appraisers, insurer financial incentives for and steering of consumers to preferred auto facilities, and setting labor rates that repair facilities must use. Both federal and state law enforcers should send a clear message: your car, your choice. Practices pressuring consumers to use insurers' preferred repair shops suppress consumer choice and disregard legal duties.
I have long sought legislative and administrative solutions to this untenable situation. We're asking the federal government for an immediate review
and a remedy to stop coercive and deceptive tactics. Effective enforcement is critical.I was joined by auto repair shop owners and members of the Connecticut Auto Body Association at a press conference on September 1 to announce the action.
I forwarded petitions from auto repairers representing 48 of the 50 states seeking relief from "onerous and arbitrary insurer practices" that harm auto repairers and deny consumers the unfettered right to choose the most appropriate repair facility for their car.
The petitioners claim that the U.S. Department of Justice entered into a consent decree in 1963 with several property casualty insurer associations and their members, in which the insurers were ordered to stop:
•Sponsoring any appraiser;
•Directing, advising or otherwise suggesting that any person or firm do business with any independent or dealer franchised automotive repair shop;
•Exercising control over the activities of any appraiser; and
•Fixing or otherwise controlling the prices charged by automotive repair shops for the repair of damage to the vehicle or for labor in connection therewith, by use of a flat rate.
I am calling for federal review of the current property casualty insurer system of compensation for auto repair services and a determination as to whether such practices violate the 1963 consent order or current federal laws.
