The Car and Truck Fleet and Leasing Management Magazine

Body Shops Enlist AG in Fight Against Insurer 'Steering'

September 02, 2009

HARTFORD, CT --- Connecticut Attorney General Richard Blumenthal on Sept. 1 -- armed with petitions from auto repairers across the country -- called on U.S. Attorney General Eric H. Holder Jr. to investigate and stop insurance company practices that he said may deny consumers the right to choose their own automobile repair shop. 

In a press conference, Blumenthal said he will seek to enlist other attorneys general in his effort. 

Blumenthal and several auto repairers said practices that seemingly force or steer consumers to preferred repair shops may violate the law and a decades-old consent decree between the federal government and several insurance companies. 

"Almost 50 years later, insurer steering is still a scourge," Blumenthal said. "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: insurer control of appraisers, insurer financial incentives 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 message: your car, your choice." 

Blumenthal said he was asking the federal government for "an immediate review and remedy to stop coercive and deceptive tactics." 

Blumenthal was joined by auto repair shop owners and members of the Connecticut Auto Body Association at the press conference to announce the action. 

Blumenthal forwarded to Holder petitions from auto repairers representing 48 of the 50 states seeking relief from the alleged steering practices. 

Blumenthal called for a "federal review of the current property casualty insurer system of compensation for auto repair services and determination as to whether such practices violate the 1963 consent order or current federal laws." 

In response to Blumenthal's announcement, the Property Casualty Insurers Association of America (PCI) released a statement flatly denying Blumenthal's allegations. "They are patently false and are being ginned up by a special interest group using the Attorney General to line their own pockets at the expense of hard working consumers seeking to get their vehicles repaired after an accident," PCI said. "It is puzzling that Attorney General Blumenthal is promoting action that suppresses competition. This will hurt, not help consumers."  

PCI asserted that direct repair programs "simply offer consumers additional options in selecting an auto body repair facility. They provide consumers with access to information about facilities that provide quality repairs, comprehensive guarantees and an overall improved auto body repair experience." 

PCI added that the Attorney General's actions seemed "motivated by a lobbying campaign by disgruntled auto body shops who are only concerned about their own bottom lines, and not about consumers."


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