The Auto Body Association of Connecticut (ABAC) today announced that it won a significant victory in its pending lawsuit against The Hartford Fire Insurance Company, with the Connecticut Supreme Court unanimously upholding a lower court certification of the class action.
ABAC, along with three Connecticut auto body repair shops, allege that the insurance company engaged in a pattern of unfair practices that violated Connecticut law. The Hartford is accused of steering its customers to its “preferred” shops rather than freely allowing customers to use shops of their own choosing.
The suit further claims that The Hartford suppressed shop labor rates by eliminating the use of independent appraisers and relying exclusively on its own automobile service representatives to perform appraisals so the company could control their content, including labor rates. The result, in the ABAC’s opinion, was that consumers did not get fair, independent appraisals of the damage to their automobiles.
“The Hartford reviews the appraisals to make sure they conform to company expectations,” said Bob Skrip, president of ABAC and owner of Skrip’s Auto Body, Inc., in Prospect, Conn. “The Hartford has characterized shops that charge more than its approved labor rate as ‘militant.’”
In its ruling, the Supreme Court paved the way for a Superior Court trial in the class action against The Hartford, a class that could potentially include hundreds of independent repair shops across Connecticut.
“This is just one more step in a long road against The Hartford and other insurance companies that seemingly disregard both regulations and consumers’ best interests,” Skrip said. “This is a very positive development for consumers and body shops statewide. It remains a long process but we’re more confident than ever that the courts will rule in our favor.”
The trial is tentatively scheduled for December.
The accusations against The Hartford were supported in the lawsuit by extensive documentation including internal memoranda detailing company policies, as well as several depositions by company employees, Skrip said.
“For years, every body shop owner in Connecticut has been forced to fight against The Hartford and similar car insurance companies,” he said. “Enough is enough. Consumers should remember, it’s your car. It’s your choice where it’s repaired.”
According to the ABAC, evidence in the case showed that when customers required repairs, employees of The Hartford known as "customer care team specialists" were instructed to direct the customers to a preferred shop in The Hartford’s "customer care repair service program." The ABAC says consumers were often pressured to abandon their choices in favor of The Hartford’s preferred shops.
The ABAC also says the specialists were trained to aggressively "sell" the company’s repair program by informing customers that, if they used the recommended shop, they would obtain discounts from their deductibles and a lifetime guarantee for the repairs.
“Any insurance company touting a lifetime guarantee is offering the same thing that every other independent body shop offers,” said Thomas Bivona, past president of ABAC and owner of My Way Auto Body in Stamford and Greenwich, Conn. The lawsuit, filed in 2003, was brought to the forefront under Bivona’s leadership.
“The insurance companies clearly place considerable pressure on their specialists, with supervisors monitoring calls and coaching the specialists to break consumers’ will to go to their own neighborhood repair shop,” Bivona said. “We found that The Hartford even offers cash bonuses and other incentives to specialists who direct customers to the preferred shops. Specialists could be disciplined for deficient performance.”
“Insurance companies carjack consumers by steering them to repair shops the companies prefer shops that may install aftermarket or used parts,” Bivona said. “Using these parts may void a new car warranty something insurance companies neglect to tell consumers. Consumers don’t see that company-preferred shops may cut corners on repairs, perhaps using inferior parts.”
Attorney Alan Neigher of the Westport, Conn. law firm Byelas and Neigher, counsel for ABAC, said, “We’re very pleased and gratified that the Supreme Court unanimously upheld the well-reasoned decision of the trial court. We believe this is another step toward bringing a sense of order to the auto body industry in Connecticut in accordance with Connecticut statutes and regulations.”
Attorney David Slossberg of Hurwitz, Sagarin, Slossberg and Knuff of Milford, Conn., co-counsel for ABAC who argued the case before the Supreme Court, said, “We’re very pleased with the Supreme Court decision which permits our case to proceed as a class action. It greatly advances our ability to represent and vindicate the rights of these hard-working small business owners.”
The legislature earlier this month approved a new law to tighten existing consumer protections from insurance company steering. Attorney General Richard Blumenthal, along with a number of state senators and representatives, supported bills to deter “collusive relationships between certain insurers and repairers.”
The ABAC is a statewide consumer advocacy group dedicated to the advancement of the collision repair industry. The ABAC continuously strives to enhance the professional abilities and knowledge of its membership, helping provide safe and dependable repairs for the public.
For more information on the ABAC or steering, visit www.abaconn.org.