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from WAFB.com Louisiana Attorney General files lawsuit against State Farm over cheap repairs

by Steven Voivedich on 08/20/14

BATON ROUGE, LA (WAFB) - Louisiana Attorney General Buddy Caldwell is suing State Farm Insurance saying the company deceives customers who have been in a car crash by steering them to use cheaper or used auto parts and steering customers to specific repair shops.

The Attorney General's Office has determined that certain business practices led by State Farm Insurance amount to violations of Louisiana's Unfair Trade Practices and Consumer Protection Law. The suit, which is the first of its kind nationally, seeks to change current practices that pose dangers to Louisiana drivers and passengers.

"..the nationwide insurer has engaged in a pattern of unfair and fraudulent business practices aimed at controlling the auto repair industry and forcing unsafe repairs on vehicles without the knowledge or consent of Louisiana consumers," Caldwell says.
Caldwell also says State Farm uses "scare tactics" to steer Louisiana consumers to State Farm's preferred repair shops and forcing the repair shops to perform vehicle repairs "cheaply and quickly."

The lawsuit alleges that State Farm steers consumers to direct repair providers that have signed agreements with the insurance company. As part of the terms of the agreement, those repair shops must comply with the standards for repair laid out by State Farm. The insurance company, not the repair shop, dictates how long the repair should take, what types of repairs are made and the quality of replacement parts. In many cases, the repairs are completed with sub-standard parts without the consent of the policy holder.

"In some cases, we've found that these parts are nothing more than used junk yard parts. In others, we've found them to be foreign knock-off parts of questionable quality," said Caldwell. "Auto repair is not an industry where you can cut corners to save a little money," he said. "It could be a matter of life and death."

"State Farm has created a culture of unsafe business practices in which consumer vehicle repairs are performed with cost-savings as the primary goal rather than safety and reliability," said Caldwell.

Meanwhile Phil Supple, State Farm's director of public affairs, says they are reviewing the lawsuit, but "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."

Chris and Dominica Medine own Medines Collision Center off of Choctaw Drive. They said several years ago they were a part of State Farm's repair shop program. Dominica explained it was not only bad for customers, but them too. Sometimes they would eat up the cost of some repair jobs because some insurance agencies didn't want to pay their fair share. 

“The insurance agency keeps on saying that's a part of doing business,” said Dominica. “But it's not. We should get paid for what we do.” 

Chris said they have a long tradition of making sure their customers are happy and satisfied, and we want to keep it that way. 

“I want to keep the insurance companies out of my business,” he said. “I want to be able to be able to fix the customers vehicle and say 'I have your car fixed to the best of my human ability and here is the bill."

State Farm currently holds the largest share of auto insurance policies in Louisiana. In 2012, State Farm wrote one third of all auto insurance policies in the state totaling over $1 billion in premiums.

"Each month Louisiana consumers give their hard earned money to State Farm under the assumption that the insurer will take care of them if an accident occurs. This simply isn't happening. Quite frankly, State Farm has been there for State Farm, not the Louisiana consumer," Caldwell stated.

Caldwell says hopefully this lawsuit will change the culture for the auto insurance and repair industry. He will also seek restitution for policy holders. 

To see a full copy of the lawsuit, click here.

Copyright 2014 WAFB. All rights reserved.

Confessions From the Auto Body Shop - from www.edmunds.com

by Steven Voivedich on 08/18/14

Confessions From the Auto Body Shop

Get Your Car Fixed Right Without Getting Ripped Off

Published: 04/26/2011  - by Philip Reed, Senior Consumer Advice Editor

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COMMENTS (8)
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Most consumers know little about auto body shops, making it difficult for them to shop for good services at affordable prices. | April 25, 2011 | Phil Reed for Edmunds
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For most consumers, auto body shops are intimidating and mysterious. The good ones restore your beloved car to gleaming perfection. The bad ones hide problems and stick you with a big repair bill.

We talked with three veterans of the auto body industry, two of whom (Brian and Neal) run their own collision repair businesses and the third expert (Andy) who is a well-connected industry observer. Our sources, who spoke on the condition of anonymity, shed light on this shadowy world and offer suggestions on how to manage costs, avoid rip-offs and ensure that sure your car is fixed right.

Know That Body Shops Run the Quality Gamut
"I don't care what state you live in, for every 10 body shops, three of them are unethical and five of them do mediocre work at best," Neal says.

It's clear that finding the right shop and building a relationship with the owner or manager is an essential first step in the repair process. There will always be fly-by-night shops, and even mobile dent-repair guys working out of the trunks of their cars. Consumers should look for brick-and-mortar body shops that have been in business a long time and have a solid track record of satisfied customers.

Most body shops are family-owned or second-generation businesses, says Brian.

And it's a tough business these days. After getting a high bill for collision repair, some people might think that body shops make a lot of money. Neal laughs at this. "At one time body work was lucrative. But today, the well-run shops are realizing profits of 4-7 percent. And it's a very fine line between making 4 percent and losing 5 percent."

In an environment like this, shops rely on good word-of-mouth referrals to attract customers. "The last thing we want is a bad reputation or reports of poor customer service," Brian says. "We want to fix it right and make that customer happy." (For more about choosing the right shop, see "5 Tips for Choosing the Right Auto Body Shop.")

Once you find the right shop, the process of getting your car fixed right at the right price starts with getting an accurate, reasonable estimate.

Understand Your Estimate
Price quotes from different body shops seem to vary wildly, and this shouldn't be the case.

Our three experts remind us that collision-repair facilities and insurance companies use one of three systems for estimating repair jobs to arrive at standardized, impartial quotes. Theoretically, this means three different shops will present similar estimates. But insurance companies will sometimes present their policyholders with a low quote that bears no relationship to the product of these estimating systems, Brian says. And if the consumer decides he can live with minor body damage and elects to pocket the check rather than pay to have the damage repaired, the carrier has quickly cleared another claim.

It's increasingly tough for body shop owners to provide an accurate cost estimate that will cover the expense to fix the car properly and still make a profit. Brian says automakers frequently change vehicle designs as the Environmental Protection Agency raises fuel-efficiency standards. They are increasingly using lighter materials like aluminum and high-strength metals like ultra-hard boron steel, particularly in the frame and suspension parts. Such parts are expensive.

Body shops are supposed to restore cars to the standards of the original equipment manufacturers (OEMs), but they know from experience that doing so is going to be prohibitively expensive. Instead, they don't even consult the manufacturer's specifications and fix the car according to time-tested methods. Those methods might not fix the car safely or completely.

"So all of a sudden the lowest common denominator — the insurance company's quote — becomes the benchmark," Brian says. And the shop with the lowest cost is likely the one the consumer will pick.

Neal adds that there is another factor that makes the process difficult for consumers. "One guy might have a different definition of what a fair profit is from the next guy for procedures that are identical between the two shops." This is the dreaded gray area in evaluating cost estimates and it can hit your wallet hard. Here's how it works.

Get an Estimate Breakdown
There are judgment calls in auto body work that can lead to huge swings in price quotes, our experts report.

Neal gives an example: Say you have a dent in your quarter panel. One shop might write a simple four-line estimate to repair the panel and repaint it. (Each line on the quote constitutes another charge.) Another shop might write a 20-line estimate that includes removing the taillight and bumper, instead of just taping them off. "There can be 20 steps for the repair if you want to do them all and if you want to charge for them all," he says.

If a consumer doesn't understand the steps, the estimate makes little sense. And many body shops don't take the time to explain it, Brian adds. "There are a lot of shops that print their estimate, throw it at the consumer and say 'Call me if you want me to do it,'" he says. Instead, he recommends looking for the shop with a staff that listens patiently and replies with reasonable answers.

Andy says consumers should be aware that some shops write lowball estimates just to "seize the keys" — get the car owner's commitment to do the job. Once the car is dismantled, the body shop owner calls the consumer and lists additional charges, claiming that the shop discovered new damage after it started work.

Additional charges do occur because, "you can't see through a car without taking it apart," Andy says. Avoid this ploy by choosing a highly regarded body shop in the first place and making sure to the best of your ability that the estimate covers all the work required.

Turn Down the "Save the Deductible" Come-on
Andy warns that some shops will offer to help consumers "save the deductible" from their insurance claim — typically about $500. The shop is basically offering to scam the insurance company for the consumer by not collecting the deductible payment.

But Andy says that what such a shop is really intending to do is to either not perform necessary work, or overcharge for something to compensate for the waived deductible. "Collision repair shops are businesses, and like any business, can't afford to not charge for work that is being performed," Andy tells us. "If a shop says they can waive the deductible...that is something for consumers to be cautious of."

Ask About the Parts
Our insiders say some unethical shop owners will try to boost profits by charging customers for new OEM parts when they've actually installed used ones, or have substituted aftermarket parts for OEM parts without telling the customer. In other cases, they repair the original part, reuse it in the vehicle and charge the customer for a new part.

It's difficult for unwary consumers to protect themselves against these scams. However, they can ask to review the original quote and request documentation of the parts the shop used in repairing their vehicle. In most states, repair facilities are required by law to disclose in their estimates that they intend to use non-OEM parts. If you live in one of the states that doesn't require disclosure, it's even more important to ask.

Consumers also have to be alert to the terminology that shops and insurance companies use when they're describing parts. Our experts talked about "imitation" parts, using the term to refer to parts that are made by aftermarket suppliers. The aftermarket industry says its products are built to industry standards and are as good as those produced by the OEMs. Your decision on which to use likely depends on the age of your car, the size of your wallet and the terms of your insurance policy. In any case, make sure you get your body shop to define its terms. Will it use OEM parts? Aftermarket? New? Used? Will it repair and reuse a part from your car?

Neal says that aftermarket parts have their place and consumers shouldn't always be hesitant to approve their use.

"If you came to me with a damaged year-old vehicle, I wouldn't even suggest an imitation part because it doesn't belong on a vehicle that we're trying to protect the value of," Neal says. "But if you came to me with your daughter's eight-year-old transportation car, we would price it both ways." There would be a small risk in lowering the resale value of the car in exchange for the savings.

For more on this subject, please see "How To Tell if Your Body Shop Did the Job Correctly."

Beware of Shops in Cahoots With Adjusters
Insurance work is the lifeblood of the auto body business. Nearly 85 percent of the work for most collision repair facilities comes from claims, according to the insiders we interviewed. Brian says that he knows of many shop owners who attempt to ingratiate themselves with insurance adjusters by detailing — or even painting — their personal vehicles for free. "We know of it happening all the time," he says.

(For the insurance industry's side of the story, see "Confessions of an Auto Claims Adjuster.")

This unethical relationship puts the consumer at a disadvantage, Neal says. "Your repair shop is supposed to act as your advocate," he says. "If your insurer wants to put an aftermarket part on a vehicle that's six months old without your permission, the shop should tell you so: 'Mr. Jones, I have to let you know that your insurer is playing games.'" There are consequences for that, though, as Neal notes. "But if you do that they'll take you off the list — that's the dirty reality," he says.

Once again, your best defense is a good offense. Only work with shops that have a track record of dealing fairly and honestly with their customers.

Don't Get Pushed to "Preferred" Auto Body Shops
When an insurance company is paying for repairs, Neal says it often tries to steer clients to its "preferred" list of body shops. Insurance companies control these collision repair facilities by promising them steady work in exchange for corner-cutting, according to the insiders we interviewed. This control may encourage some body shops to "back charge," or build in extra costs to cover areas not covered by the insurance company. If a shop begins doing this, Neal says, "It's a slippery slope, and when you get on that path it's hard to get off."

Andy says that most state laws allow consumers to choose their auto body shops, even when an insurance company is paying for the repair. But insurance adjusters will still coerce clients toward the "preferred" shops using a variety of tactics to discourage them from going elsewhere, the insiders say. For example, the adjuster might say if you go to a shop that's not preferred, some costs won't be covered, or the non-preferred shop won't guarantee the work, while the preferred shop will.

In many cases, Andy has seen consumers pay out-of-pocket for repairs that the insurers said they won't cover. Then, when the consumer files a complaint with a state's department of insurance, the insurer is forced to pay for the repair. "Some insurance companies will put the onus on the customer to prove that they will pay for it themselves before they will agree to indemnify them for it," he says.

All three experts agree that consumers place a lot of trust in their insurance companies to look out for their best interests. What most people don't consider is that the insurance company is trying to cut costs to the bone while still retaining policy holders. "Consumers are at a disadvantage because they're not knowledgeable about the services that they're procuring," Andy says.

Be Your Own Advocate
Sad to say, the body shop experts we spoke with say that the consumer can't rely completely on body shops or insurance companies to watch out for their interests. You have to act as your own advocate, choose the best shop and remain alert to overcharging and misrepresentation.

"Most body shop owners are very concerned about getting good feedback and building a list of customers who'll come back next time work is needed," Andy says. "Find those shops, work with them, and nine times out of 10, things will go smoothly."

Read more articles in the Edmunds Confessions Series.

From www.thesimpledollar.com

by Steven Voivedich on 08/11/14

Choosing an Auto Body Shop that Works for You and Your Insurance

For More Free Online Car Insurance Quotes, Visit Our Car Insurance Resource Center.

If you’ve been in an accident, it’s important to know that auto body shops have your best interests in mind – and the same goes for doctors. Unfortunately, some body shops and doctors – the ones that tend to favor insurance companies – will routinely downplay claims, minimize auto repair costs, use cheap parts, or even neglect to fully treat ailments. These practices can devalue your vehicle or prevent you from a full recovery following an injury.

Auto Insurance Questions Pocket Sized

Print this out and bring it with you as you investigate possible body shops and doctors. Click to enlarge.

 

To the left is a quick guide to establishing whether a doctor or auto body shop is truly independent, or if they’re really in the back pocket of the insurer. Protect you and your wallet by printing out TSD’s, “How to Sniff Good and Bad Service Providers.”

Auto Damage Claims

This section provides some basic principles on what to look for when choosing a auto body shop, as well as tips on how to be an active participant in your car’s repair to ensure that it comes out looking great and costing you no more than your deductible.

  • Research Before You Repair
    Angieslist.com, Yelp.com and Google reviews are useful sources to get a sense of a shop’s quality based on customer reviews, but take the online reviews with a grain of salt. You’ll want to pay attention to well-written, thought-out reviews – not nasty one-liners, since even the best businesses can end up with an unhappy customer from time to time. You may also be able to find discussion forums specific to your vehicle’s make and model where forum members can recommend good shops in your local area.
  • some body shops and doctors – the ones that tend to favor insurance companies – will routinely downplay claims, minimize auto repair costs, use cheap parts, or even neglect to fully treat ailments…Sniff out good and bad service providers

  • Choose a Shop with a Warranty
    Some auto body shops offer their own independent warranties on their repairs for fit, finish, functionality, and overall quality. Request to see their warranty and ask some questions about it before agreeing to do business with a given shop and make sure it doesn’t have a time limit. A good shop will offer a lifetime warranty.
  • Keep Your Existing Manufacturer Warranties Intact
    Ask your chosen auto body shop if any mechanical repairs will void or alter any existing warranties you may have on your new or recently purchased car. Factory warranties on engines and accessories may be compromised if your car needs mechanical repairs following a collision, so be sure your car’s factory warranty isn’t being compromised with aftermarket or used parts, or repairs that otherwise aren’t manufacturer-approved.

     

    If your insurer is trying to “mandate” aftermarket or used parts that will void your factory warranty, demand that the insurer give you a written warranty identical to your factory warranty. Nine times out of ten they’ll simply pay for original parts, instead of giving you the runaround.

    pay attention to well-written, thought-out reviews – not nasty one-liners, since even the best businesses can end up with an unhappy customer from time to time

  • Get More than One Estimate
    According to Edmunds.com’s tips for car maintenance and choosing a body shop, it’s best to get estimates from several different shops. After your first estimate, show their estimate to the second shop and the third shop, and ask how they compare with the first shop’s quote. You might find that one or the other is skipping over a lot of important items. Don’t simply compare the final estimated cost, since one shop may be quoting for an entirely different method of repair than the other. You’ll want a shop that is both thorough and friendly.
  • Be Picky – and Let Them Know It
    Make it clear to your auto body shop that you want all brand-new, factory-original parts used in your car’s repair. In some states, the law allows for used or aftermarket parts to be applied, but if they don’t fit properly or if they don’t match quite right, you have the right to demand new replacement parts that will restore your vehicle to its original condition. Let the shop know that you’re picky and expect high quality work. If you leave them with the opposite impression, your car might end up with some ill-fitted panels after the work is done, leaving your car devalued and in poor cosmetic condition.
  • Go to a Shop Specializing In Your Car’s Brand
    Choosing a shop is like choosing a restaurant – you wouldn’t order Mandarin chicken at an Italian restaurant, so don’t try to get your Volkswagen fixed at a Honda specialist’s shop. It might work out fine for a basic repair, but it’s best to go to a shop that knows your car inside and out. Different car brands have a lot of nuances, so it’s best to go with experienced technicians.
  • If your insurer is trying to “mandate” aftermarket or used parts that will void your factory warranty, demand that the insurer give you a written warranty identical to your factory warranty

  • Get It In Writing
    When your insurance adjuster or auto body shop representative promises to “pay for everything,” “restore your car to its pre-accident condition,” or “completely cover the rental car,” make sure you get these types of commitments in writing. Even after a phone conversation, send an email to your adjuster or auto body shop to officialize the agreement or promises made and ask them to respond to clarify that everything is accurate. You’ll thank yourself later if you happen to lodge a complaint with their manager in order to get the service you were promised.

Good article from bankrate.com

by Steven Voivedich on 08/07/14

How to choose the right auto body shop

Tara Baukus MelloIt's stressful enough having a car accident, dealing with your auto insurance company and worrying about how to get around. The last thing you need is to get the runaround from the auto body shop tasked with fixing your car. Like any business, auto body shops run the gamut of quality, so save yourself the headache by doing a bit of research before you choose an auto body shop to help ensure that your car repairs are completed correctly, on time and with no hassle.

Repairs from a car accident are likely to cost thousands of dollars, and it's smart to use an auto body shop that comes highly recommended. If your car insurance is covering the majority of the repair costs, you may be inclined to go with the authorized repair facility closest to you, considering their list of facilities as a recommendation. Not so fast.

 


 

While an auto insurance company will remove a facility if it gets complaints, its list does not constitute a recommendation. Instead, get the info for several auto body shops from your insurance company and then ask friends and neighbors for feedback about any of the shops they've used. Take a few minutes to do an Internet search on each shop, searching for customer reviews.

When you arrive for your estimate, take a few minutes to learn more about the shop. Look for the shop's business license on the wall and ask to see it if it's not there. Ask how long the shop has been in business and if it's always been in that location. Auto body shops that haven't been in business for long or those that have moved from one town to another may indicate a less-than-reputable business. Find out how long the owner or general manager has been with the company and if he has skills in auto body repair as well as managing a shop. While the owner or manager doesn't have to have a background in repair to have a great business, this knowledge certainly is helpful to ensure quality work.

Also, pay attention to the number of people working in the auto body shop's office. The more office staff, the higher the shop's overhead. Overhead costs also can vary widely in the same town, depending on the shop's location. Auto body shops with higher overhead will sometimes tack on additional repairs that are in the gray area of the project to help increase their profit margin. In some cases, they may charge for these services but not actually complete them. For details, read "3 tips to avoid the auto body shop rip-off."

Finally, when you receive your estimate, ask about the auto body shop's warranty for its work. Look for a shop that provides a written warranty for at least one year on the parts as well as the work. A two-year warranty on the body work and three years on paint is ideal. However, be cautious if an auto body shop offers a lifetime warranty, as this type of warranty isn't realistic and usually comes with many exclusions.

When you do choose an auto body shop to get your car repaired, read "Body shop blues: Getting the repairs right" for tips on how to ensure your car is repaired properly.

 

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

 

 

Ask the adviser

If you have a car question, email it to us at Driving for Dollars. Read more Driving for Dollars columns and Bankrate auto stories. Follow her on Facebook here or on Twitter @SheDrives.
 


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What to Consider When Choosing Auto Body Shops

by Steven Voivedich on 08/07/14


So this week I crashed my car. I'm perfectly fine and so is the other driver. But my car has some ugly "injuries" and suddenly I have to try to follow the advice I give to consumers all the time. Getting in a car accident is bad enough, but some consumers feel like fate comes crashing down on them a second time when they go to get their car repaired.

Shoddy work. Junkyard parts. Insurance-company influence. But even if your car is a tangle of metal, like something from a bad dream, getting it fixed doesn't have to be a nightmare. The key is in choosing the right auto body shop. It's an important choice because for most of us our car is our second biggest investment after our home.

Insurance companies are not supposed to force you to use their chosen shop. That's called "steering." But most insurers keep a list of approved shops that they've worked with in the past. And it's one way to narrow your choices down. Once you have that list, ask friends, colleagues -- your mechanic -- if they can recommend any of the shops on the list. If not, maybe they have another strong recommendation.

Next, check out the reputations of the shops people have recommended by calling or going online. Contact your local Better Business Bureau (BBB), your county consumer affairs office (if there is one) and your state consumer protection office. You should be able to find out the number of complaints, the nature of those complaints and how they were resolved.

Find out whether the body shop belongs to any professional organizations. For example, shops that belong to the Automotive Service Association (ASA) pledge to uphold a code of ethics. You can call (800) ASA-SHOP for a referral. Some auto body shops also belong to ACRA -- America's Collision Repair Association. See if the technicians are certified to do body work by ASE -- Automotive Service Excellence.

Some insurance companies allow certain shops to do their own adjusting work, rather than waiting for an adjuster from the insurance company to come out and look at your car. This could save you time. Plus, since the auto body shop wants to make money and wants to do a thorough job, if they do their own adjusting you may get the better benefit of the doubt.

Once you go to the shop, make sure it has a professional appearance and works on newer, nicer cars. Ask the shop if it regularly works on your make and model and has the equipment recommended by your vehicle manufacturer.

Some insurance companies pressure customers to accept generic parts. Auto body experts say most of these parts are of lighter weight than the originals. If you must use generic body parts, ask about the CAPA seal of approval. CAPA is the Certified Automotive Parts Association, a group that tests auto parts.

You may also run into junkyard parts. If your car is fairly new, don't accept junkyard parts. If you have an older car, it's not as much of a problem.

When it's time to pick up your car, study it carefully. Test every single button, switch and lock in the car to make sure it works -- even the stereo. Make sure the doors, hood and trunk open and close smoothly. Examine the paint in bright sunlight to make sure the color matches. I once had to have major body work on a car after somebody fell asleep at the wheel and plowed into it as it sat parallel parked on the street. For three months afterward, I discovered additional problems because I didn't test every last thing before I left the body shop.

 

To Be a Savvy Consumer:

Carefully choose which collision repair facility will work on your car.

Don't feel pressured to accept generic parts or junkyard parts. Remember, the body shop works for you, not your insurance company.

Put your car through its paces before you take it home.

 

Where to Complain:

If you're unhappy with an auto body shop, report them to any professional organizations they belong to and file a complaint with your county or state consumer protection office. Also file a complaint with the BBB.