Advertisement
News
Advertisement

Attorney General Sues State Farm Over Auto Repairs

Tue, 08/19/2014 - 3:29pm
Melinda Deslatte - Associated Press

Attorney General Buddy Caldwell filed a lawsuit Tuesday against State Farm, alleging Louisiana's largest auto insurer is illegally steering customers involved in car accidents to repair shops that use junkyard parts and choose cheap fixes over safety.

The lawsuit, filed in state district court in Baton Rouge, accused the insurance company of violating Louisiana's unfair trade practices act with a systematic effort to lower its costs at the expense of its customers.

Caldwell said his office's investigation started in March after receiving complaints from around the state about shoddy repair work. He said his office has found hundreds of violations.

"We rely on our insurance companies to guide and direct us and hold our hands through the stressful process of an auto accident. ... But as our investigation has uncovered and our petition alleges, what happens next is often not in the best interests of consumers," said Stacie Lambert deBlieux, an assistant attorney general.

State Farm spokesman Phil Supple said the Illinois-based company, which insures one-third of all Louisiana drivers, still was combing through the lawsuit's accusations.

"The description in this lawsuit is not in line with State Farm's mission to serve the needs of its customers, and our long, proud history of achievements in advancing vehicle safety," he said in a statement.

The lawsuit alleges that State Farm makes customers believe they can't choose where they get their vehicles repaired and directs people to repair shops that have agreements with the insurer to fix the car as cheaply as possible.

The company provides false information to customers about non-participating repair facilities and incorrectly claims that customers will be forced to pay out of pocket, Caldwell said.

In order for a repair facility to be on the list recommended by State Farm, the shop must use repair standards set by the insurer, which includes how long the repair should take and what sort of parts should be used, the lawsuit said. Caldwell said the parts used are often sub-standard and don't match the consumer safety and vehicle manufacturer standards.

The lawsuit was filed against State Farm Fire and Casualty Company, State Farm General Insurance Company and State Farm Mutual Automobile Insurance Company. It seeks an injunction against State Farm, prohibiting the use of any programs that manipulate auto repairs, along with restitution to consumers and civil penalties.

Caldwell said his office found similar problems across multiple insurance companies in the state but targeted State Farm because it covers so much of the automobile insurance market in Louisiana.

"Other companies have a tendency to follow the leader," he said.

For people who have gotten their cars repaired after an accident, deBlieux recommended they get a post-repair inspection at a different, independent auto repair shop to check the work.

Advertisement

Share this Story

X
You may login with either your assigned username or your e-mail address.
The password field is case sensitive.
Loading