Miscellaneous

CT Attorney General Blumenthal Demands Auto Insurance Practices Investigation

By E L Eversman

Once again, Connecticut Attorney General Richard Blumenthal is the only government official who appears to have any knowledge or concern about consumers and what they receive from their state-mandated auto insurance.

Bloomberg.com reports that AG Blumenthal is asking the U.S. Attorney General, Eric Holder, to investigate and stop auto insurance companies from engaging in what he calls “coercive and deceptive tactics” relating to insurers’ direct repair program networks.

Called “DRP”s by the collision industry, insurers urge consumers to patronize one of their network’s DRP shops.  While insurers like to tout that consumers can have their vehicles repaired at any shop, they put extreme pressure on insureds and the people they hit to have the repair work performed at a network shop.

Why?  Because insurers get collision repairers to agree to perform repairs according to their “guidelines”.  The problem is that the insurer is in the business of professional gambling and trying to keep as much money in the kitty — not on how to safely and properly repair your car.  So, their “guidelines” (read “dictates” by the way) make sense for saving money, not for properly repairing your car.

Oh, and there’s that pesky little indemnification clause.  Every DRP agreement I have ever read has one.  Boiled down to the essentials it says, “Collision repair shop will pay us back any money we have to spend related to this claim or repair — including any money we have to spend on expensive lawyers.”  This means that when the original network shop does a crummy job fixing your car so it can keep to the insurer’s “guidelines”, and you have to take it somewhere else to have it fixed correctly, the insurer doesn’t care because it expects the original shop to pay for all of the re-repairs.

You know something funny.  Insurers don’t hesitate to pay the amount necessary to fix your car correctly when they think someone else is going to pick up the tab.  With all of insurers’ fussing about “greedy collision repairers” demanding to be paid for the real cost of repairs, they never say a word when they intend to pass the bill on to someone else.

It’s just like all of those “greedy plaintiffs’ lawyers” insurers love to attack and complain about.  What they forget to mention is that the “greedy plaintiff lawyer” epithet only applies to a consumer’s lawyer when suing an insurer or insured.  You never hear insurers complain about greedy plaintiff lawyers when it is the insurer suing — and they sue more than anyone.  How about when GEICO sued Google claiming it owned the word ”GEICO” and that Google couldn’t allow others to bid on it as a search term.

Full post as published by AutoMuse on September 02, 2009 (boomark / email).