California shop owner Gene Crozat of G&C AutoBody is leveling accusations against State Farm that the insurer has repeatedly shorted his customers on claims, steered potential clients to preferred shops, and is being protected by the California Department of Insurance (DOI).
To raise awareness, Crozat has invited repairers to a meeting on Nov. 12 to discuss steering issues related to State Farm. An attorney will be present to discuss current state laws and give advice on protecting businesses and consumers against unlawful conduct by insurers, and how to document such instances.
Crozat says his customers have experienced ongoing problems with State Farm and have won “a large number” of small claims court cases against the insurer after it reportedly refused to fully cover repairs and conducted other alleged misdeeds.
Crozat claims that California Insurance Commissioner Steve Poizner has ignored consumer complaints about State Farm and has actively suppressed public information regarding the insurer. Crozat has filed a writ of mandate against Poizner, requesting that he produce documents related to State Farm’s alleged unlawful activities that are considered public record.
Crozat recently sent a letter to state Sen. Christine Kehoe requesting that she lead legislative efforts to uphold state insurance laws and strengthen consumer protection against insurance companies that flout the law.
Crozat’s letter accuses State Farm of systematically steering customers away from independent body shops, settling claims for unreasonably low amounts, delaying claims payments and engaging in unfair competitive practices. Crozat says that because Poizner and the DOI “turn a deaf ear to hundreds of consumer complaints against State Farm,” consumers’ only recourse is to wage battles against the insurer in small claims court.
“State Farm’s unlawful conduct ultimately defrauds California consumers and auto body shops out of hundreds of millions of dollars, deprives the State of California and the federal government of much-needed sales tax revenue, and permits State Farm to gain an unfair competitive advantage over the many law-abiding insurance companies,” Crozat concludes in his letter.
Specifically, Crozat’s letter says State Farm violated state laws in the following ways:
• Illegal “steering” of a consumer’s vehicle to a particular auto body shop, in violation of California Insurance Code 758.5.
• Failing to pay reasonable repair rates or using an inaccurate and unlawful labor rate survey in determining reasonable repair rates for auto body repairs…The failure to pay reasonable rates includes both insisting on artificially low hourly labor rates for body and paint work, as well as arbitrarily capping paint and material costs substantially below their actual cost.
• Improperly conducting or reporting false/misleading information concerning material facts related to a labor rate survey for auto body repairs.
• Failure to effectuate prompt, fair and equitable settlement of claims for auto body repairs in which liability has become reasonably clear.
• Attempting to settle claims for autobody repairs by making unreasonably low settlement offers.
• Denying or rejecting first-party claims for auto body repairs, in whole or in part, without providing a statement in writing to the claimant containing all bases for such rejection or denial, and the factual and legal bases for each reason given for such rejection or denial which was then within the insurer’s knowledge.
• Failing to restore the damaged vehicle to its condition prior to the loss at no additional cost to the claimant other than as stated in the policy or as otherwise allowed by law.
• Engaging in unfair competitive practices.
More information:
• The meeting is slated for 7:30 p.m. at the Governor’s Inn, 210 Richards Blvd., Sacramento. To RSVP for the meeting, call Crozat at (707) 591-3365.
