Personal Injury

Louisiana sues State Farm for endangering motorists with cheap auto repairs

 Louisiana sues State Farm for endangering motorists with cheap auto repairsState Farm Auto Insurance endangers the lives of its policyholders by effectively forcing auto body and repair shops to perform repairs as cheaply and quickly as possible, the Louisiana Attorney General’s office alleges in a lawsuit.

According to the lawsuit, filed August 19 in a Baton Rouge federal court, State Farm repeatedly broke state laws against unfair trade practices and monopolies by directing consumers to preferred repair shops or “direct repair facilities.”

The repair shops are then effectively forced to conform to insurance estimates by using cheap, imitation, and used parts “rather than in accordance with consumer safety and vehicle manufacturer performance standards,” Attorney General Buddy Caldwell said in a statement.

According to the Times-Picayune, Mr. Caldwell “said the lawsuit can prove State Farm deceived customers in order to save money by employing practices that could potentially endanger the lives of their customers.”

Repair shop owners who provided tips to Mr. Caldwell’s office prior to the lawsuit said that State Farm’s repair plan called for repairing rather than replacing the damaged part, replacing damaged parts with “junkyard,” “knock-off,” or “after-market” parts, obtaining discounts on replacement parts, and obtaining the lowest possible labor rates.

Not only do these practices return the customer to the road in an unsafe vehicle, they can void the vehicle’s warranty.

“Assistant Attorney General Randy Ishee said many repair shop owners pay the difference out of their own pockets to install authentic manufacturer parts instead of imitations, so they don’t send their customers on the road in an unsafe vehicle,” the Times-Picayune reported.

Mr. Caldwell said that he is suing State Farm for restitution and civil penalties for each violation of the state law concerning unfair trade practices and unsafe and deceptive business practices.

Endangering motorists for the sake of profits apparently isn’t a practice unique to State Farm, Mr. Caldwell’s office said, indicating that it seemed to be an industry-wide problem. State Farm is the only defendant named because it alone represents one-third of the casualty business.

According to the Times-Picayune, Mr. Caldwell has uncovered hundreds of violations since he began investigating the matter in March. The aim in suing State Farm is to get the company and other insurance companies who do business the same way to start putting the safety of their customers on top.

Sources:

Times-Picayune
Louisiana Office of the Attorney General