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Kentucky Body Shop Wins Short-Pay Suit Against Auto Owners Insurance
7/24/2012

Pure Reflection body shop and owner Rusty Barrett have won a short-pay suit against Auto Owners Insurance in the Shelby District Court of Kentucky. On June 20, with Judge Linda Armstrong presiding, a jury ruled that the insurer had to pay an extra $286.50 for the repair of Barrett’s customer’s vehicle.

Barrett, with the support of one of his customers, sued Auto Owners to dispute their request that Barrett use what he says was a “subpar” part in the repair of the customer’s vehicle. The part was a used door Barrett says Auto Owner provided for a 2006 Kia that he claims was not equal to the door it was replacing.

“What started as a six-day job turned into a 14- to 16-day job [because of the back and forth],” says Barrett.

Barrett says the door Auto Owners sent him was not equal to the original door.

“That door that was in the car had never been wrecked,” he said. “I don’t mind using a used part – we do it all the time – but the regulation says it has to be equal and like in quality, fit and performance. These doors they were sending were not. And I’m tired of insurance companies trying to short the consumer.”

After a third door was sent to his shop, Barrett said he had enough.

“[Auto Owners] actually offered us an additional three-and-a-half hours of labor to use that door, which was not as good as it needed to be and was even the wrong [model] year,” he says. “So we had enough. I got a new door and put it on and sent them the bill.”

Barrett says Auto Owners denied payment of the $286.50, even though he says that “98 percent of the time I send the insurance company the invoice and the photos, they pay the bill.” So he asked the car’s owner if he could represent him in court. He agreed, and Barrett took over.

Barrett says the decision in favor of Pure Reflection was the first of its kind in Kentucky in that it was the first time a body shop represented its customer in court, and the first time the court ruled in favor of a shop over an insurer. Barrett says individual car owners had filed suits in the past but had never won.

“It’s something we’re starting to see in Ohio and New Jersey and a few other places,” he says. “In the last five to six years, [insurance companies trying to pass on subpar parts] has gotten a lot worse.”

Tim West, assistant general counsel for the Kentucky Department of Insurance (DOI), said he doesn’t view the decision or case as a landmark, but if insurers are trying to pass on subpar parts, his office needs to know. However, it’s only the policyholder who can file a complaint.

“If [a shop owner] has concerns about the quality of the part, especially if it concerns safety, they can [ask the policyholder to file a complaint], and it would be in their right to do that,” West said. “But in [Barrett’s case], I see it more as a dispute over the cost of repair instead of the replacement of the part.”

According to the Kentucky DOI, a dispute over the quality of a part can’t be resolved by the state, only by a jury. Vicky Horn, an insurance staff attorney with the Kentucky DOI, said she can’t remember ever hearing a complaint like Barrett’s.   

“Normally, a customer calls us enraged that they’re not receiving all new parts,” Horn said.

Barrett believes customers need to be educated on what their insurance policies allow.

“It’s not that [the part] is used, that’s fine,” he said. “It’s that it has to be like, kind and quality. That’s what the insurance company is trying to get away with.”

Rod McMurray, owner of Hi-Tech Body Shop in Shelbyville, says the judgment in favor of Pure Reflection is a step in the right direction toward allowing repairers to perform safe repairs for their customers.

“We’re hoping this one small case can spread the word,” McMurray said. “The insurance companies are getting word of this case, so we hope they’ll stop being neglectful of those charges. I think we’re going to see more lawsuits all over the state. Hopefully somebody else and somebody else and somebody else will step up and keep this moving so we can get some momentum and take back control of our businesses.”

McMurray said that almost every job that comes into his shop with an insurance estimate has a supplemental cost added to it because the estimate usually doesn’t cover all necessary parts and labor.

“[The insurers] always leave out parts or time or make changes,” he said. “What we want them to do is start treating the customers and shop owners fairly. We’ve been lobbying for a change on this for years and have gotten nowhere. The only thing that will change it is to start suing these companies.”

Barrett said the onus of the repair always falls back on the shop no matter what the insurance company says, which is why he believes this decision is so important.

“[Insurers] are trying to get me to do something that, if it goes to court in the future, it’s my responsibility,” he says. “It’s the legal obligation of the insurance company to pay for the replacement; it’s my responsibility to fix it back to its original quality. If I don’t do that, no matter if the insurance company tells me to or not, it’s my neck on the line."


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