The Hartford insurance company has been ordered to pay $20 million in punitive damages to auto body repair shops throughout the state of Connecticut.
The lawsuit was filed on the grounds of unfair trade practices and labor rate suppression steering by the Auto Body Association of Connecticut (ABAC), according to its president, Tony Ferraiolo.
The penalty was sanctioned by state Superior Court Judge Alfred J. Jennings Jr. on Friday, June 5, nearly 10 years after ABAC filed the lawsuit.
In addition to this recent decision, the Superior Court jury ruled against The Hartford in 2009, awarding $14.7 million in damages to nearly 1,000 body shops throughout the state. However, those shops have yet to see the nearly $35 million award.
A Hartford spokesperson has announced the company’s plans to appeal. In the meantime, Ferraiolo says the decision could have a huge impact in the state if it’s upheld.
“If The Hartford follows the guidelines put in place by the judge and reports back, [Jennings] would get all the data, and he’s hoping that the market will adjust. He did warn that if they didn’t adjust fairly, he’d appoint a special master who would actually go out and determine what the rates should be in certain areas of the state. But for now, he’s trying to let the insurance company do what it’s supposed to do.
“They can use a [direct repair labor rate] as a guide, but not solely as a rate for independent shops,” he continued. “This would allow the marketplace to adjust to a more fair labor rate because it would be based individually on each shop.”
ABAC has also filed a lawsuit against Progressive on similar grounds.