Michael Bradshaw of K&M Collision in Hickory, N.C., has filed a lawsuit against Nationwide Mutual Insurance Company on behalf of his customer, a Nationwide policyholder. The suit alleges that Nationwide refused to pay for "reasonable and necessary" parts, procedures and materials. The total amount sought in the lawsuit is $2,956.98 plus legal fees and costs.
After Bradshaw informed his customer of the alleged short pay by Nationwide, the customer authorized K&M to proceed with the repairer’s recommended repair activities and signed documentation authorizing Bradshaw to act on his behalf in filing a lawsuit against his insurer seeking full compensation for the repairer’s recommended and performed activities.
The claim includes denial of procedures including test-drive, removal of molding adhesive from painted panels, tint color, finish sand and buff, and underpayments of numerous other reasonable and necessary processes including body, refinishing, mechanical and frame labor rates, material allowances and storage charges for the insurer’s alleged delays.
To avoid needing to hold the vehicle until receipt of full payment, K&M allowed their customer to take possession of the properly repaired vehicle with the understanding that all billings remained his full responsibility in the event the insurer failed to provide full payment.
“We value our customers and work hard to ensure their repairs are done properly, thoroughly and in a timely manner," said Bradshaw. "It’s unfortunate that such legal activities have become necessary. Consumers rely upon insurers to be there in their time of need and when they need them most, and when they fail to keep their promise, who can blame the consumer for becoming upset? Our efforts will be to illustrate to the court the insurer’s intentional breach of contract, unfair and deceptive trade practices and their acting in bad faith.
"As Barrett Smith of Auto Damage Experts says, ‘When an insurer fails to fully ascertain the full extent of all loss-related damages and/or fails to provide proper consideration for each necessary process, part and/or material, the failure can be defined as either ignorance, gross incompetence or intentional misrepresentation…or a combination thereof.’ Once the insurer was notified of the underpayments and chose to deny ample consideration, it was no longer a mere error or oversight. We will be illustrating to the court that the insurer intentionally withheld payment in a self-serving interest and not in the interest of their policyholder, and as such we will seek fees and costs as well as punitive damages for same."