Pennsylvania Shop Files Suit Against Multiple Insurers

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Pennsylvania Shop Files Suit Against Multiple Insurers

Unread postby RatPak11 » Thu May 15, 2014 12:10 pm ... -Insurers/

Pennsylvania Shop Files Suit Against Multiple Insurers

May 14, 2014—Crawford’s Auto Center Inc. in Downington, Pa., has filed a lawsuit against seven major insurance carriers and their affiliates, accusing them of short pays and conspiring to establish and enforce “an artificial market value for collision repairs,” according to the complaint.

The suit was filed in an Illinois district court on April 30, and names State Farm, Allstate, GEICO, Progressive, Farmers, Liberty Mutual and Nationwide as the lead defendants, along with a slew of their respective subsidiaries.

Attorney Steven L. Bloch of Berger & Montague P.C., representing Crawford’s Auto Center, told FenderBender that the suit was filed in Illinois for strategic purposes, as “several of the defendants are based in Illinois and conduct a great deal of their business either in Illinois or emanating from Illinois."

“I think [the suit] speaks for itself,” Bloch said Wednesday when reached by phone. It stems from “the artificial establishment and perpetuation of a so-called prevailing rate, which is used to suppress compensation to collision repair facilities.”

Filing under the Racketeer Influenced and Corrupt Organizations Act (RICO), the suit accuses the defendant insurers of “long-running unlawful conduct to suppress compensation” to shops.

The suit goes on to say that the insurers have worked to implement a “prevailing rate” for collision repair compensation that is lower than that of market value, aided by industry information providers that the suit labels as “conspirators.”

This is the latest in a recent string of lawsuits filed on behalf of the collision repair industry against insurers.

The Mississippi Collision Repair Association, along with a number of its affiliated body shops, filed last summer to block State Farm’s PartsTrader electronic parts procurement mandate for its Select Service shops; a Tennessee shop accused Progressive of steering and underpament in November; and an Ohio MSO alleged short pays from State Farm in another suit in March.

There is also a suit pending from industry advocate and shop owner Ray Gunder to block the State Farm PartsTrader initiative in Florida, and a suit recently filed on behalf of a number of Indiana shops.


Allen J Affleck · Hunterdon Central Regional High School
This is all long overdue, how can NJ shops get the same action moving?
Reply · · 5 · Yesterday at 8:01am

Eric Dash · Bellefonte, Pennsylvania
Mechanical Rates are in excess of double the collision rate in my market, for a few of the dealers. The other 85% of the mechanical shops ALL ecipse our "Prevailing Rate" BS door rate for collision compensation by 30% as the lowest and most closer to 50% above our rate! lets ask our insurance companies to find some cost reductions in their OWN HOUSE, as we are stripped to the bone!
Reply · · 1 · 23 hours ago

Bob Juniper · Franklin Heights High School
Good job!
Reply · · 1 · 22 hours ago

Three-C Body Shop
Good Job!!
Reply · · 2 · 22 hours ago
We are going through the biggest Change In the industry we will ever see in our life time. now is just the tip of the iceberg..
Reply · · 50 minutes ago

sign me up my shop info is BUFFALO BODY WORKS longwood fla 32750 407-331-8482 email ;
Reply · · 3 hours ago

people change your posted rates to a fair and reasonable rate and post it for others to follow !! we as body shop determin the preveiling rate not the ins co. we out number them remember ??? how do you think all the ins co rates are equal at $40hr ummm they talk to each other [ rico act violation] lets not talk lets DO .
Reply · · 3 hours ago

DeWayne White · Jacksonville, Florida
I agree with Allen, this is long overdue
Reply · · 31 minutes ago

MAY 14, 2014 03:56 PM POSTED BY JIMMY
It's a start. What the insurers are doing is criminal. We have been made into slaves and whores so they can profit and cars are on the road with unsafe repairs. They heve made us criminals along with them. Abolish the DRP system of repairs.

It's about time. I have been writing about and suggesting to the Connecticut Association to use RICO for years. Included as defendents should also be the DRP shops. They too are conspiring with insurers to keep labor rates down. The average body shop will not want to, or cannot afford to defend a lawsuit. Including DRP shops as RICO defendents will eliminate the most important players in the the conspiracy.
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