A car accident can be deeply unsettling, even if it’s relatively minor. But it may trouble consumers to know the auto repairs they have done afterward may make them less safe on the road than they were before.
At least that’s the allegation made by hundreds of auto repair shop owners in 36 states against dozens of automobile insurance companies in a federal lawsuit recently filed in Florida.
The primary issue is the fact that insurers routinely push for repair companies to use cheaper replacement parts, which usually means they are used, after-market parts. They may not be designed exactly to fit the vehicles on which they are being outfitted. In some cases, the lawsuit alleges, the parts are counterfeit or even pulled right from a scrapyard.
The 92-page complaint, filed recently in the U.S. District Court for the Middle District of Florida, Orlando Division, says repair shops that refuse to outfit vehicles with these cheap parts risk being stiffed for the difference or else losing a coveted spot as a large name insurance company’s “preferred” repair site. That means shops that are willing to cut corners with work quality, labor costs and substandard parts are rewarded by insurance companies, while those who consistently do quality work with the right parts are snubbed.
Insurance industry representatives sharply dispute this characterization, saying there is nothing wrong with trying to save consumers’ costs. The industry reportedly saves about $1.5 billion a year by covering the cost for after-market parts, rather than parts from the manufacturer, which can cost 25 percent to 50 percent more. In turn, the industry representatives say, they can keep premiums down by nearly 4 percent.
But that savings is likely diminished if, as the plaintiff auto repair shops allege, the repairs make drivers and passengers less safe. For example, using a lower-grade replacement windshield or one that doesn’t quite fit the make and model of the vehicle on which it’s being installed increases the risk of passenger ejection if the windshield is more likely to shatter or pop out upon impact.
Plaintiffs were quick to say not all direct repair programs are bad, and for the most part, the shops that participate in these programs employ professional, honest places. However, they say the insurers are manipulating these companies, and this must change.
There are numerous, well-tested examples of how use of certain after-market parts could diminish occupant safety. One of those cited in the lawsuit involved test conducted by Ford Motor Corp. that showed when certain off-brand parts (radiator supports and bumper beams) were used to repair a vehicle, they did not resist the force of a crash as well as the manufacturer parts. Ill-fitting replacements also reduced the speed at which airbags were inflated – which could mean the difference between walking away from a traffic collision relatively unscathed or sustaining serious or life-threatening injuries.
This is not in fact the first time such allegations have been made against insurers. U.S. Sen. Richard Blumenthal, D-Conn., wrote a letter asking the Attorney General to launch an investigation into the quality of repairs pushed by auto insurers, which he indicated put consumer’s at risk and was also largely done without their knowledge. Recently, Mississippi’s attorney general added his support for that request.
Before that, the attorney general in Louisiana filed a lawsuit against one large insurance company over similar assertions last year. That case is still pending.
In the meantime, consumers should know they have a right to ask about the replacement parts being used and to request manufacturer replacements. They can make a case for coverage to an insurance company about why that particular part should not be after-market, but they may need to be prepared for the possibility of covering the cost difference. In cases where replacement parts may not keep them as safe in a crash, paying that additional cost now could be well worth it later.
If you have been a victim of a traffic accident, call Chalik & Chalik at (954) 476-1000 or 1 (800) 873-9040.
Auto Insurance Giants Accused of Pushing Cheap Repairs, April 17, 2015, By Sarah Cooke, NerdWallet.com
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