Alleging “a culture of unsafe enterprise practices” in its handling of car repairs, Louisiana’s lawyer basic has filed suit against insurance coverage giant State Farm.
Lawyer General Buddy Caldwell’s lawsuit, filed Aug. 19 in the 19th Judicial Court in East Baton Rouge Parish, alleges State Farm has “engaged in a pattern of unfair and fraudulent business practices aimed at controlling the auto repair sector and forcing unsafe repairs on vehicles without having the understanding or consent of Louisiana customers,” according to information released by the AG’s office.
In his announcement, Caldwell mentioned the company’s practice is to make certain that “consumer car repairs are performed with cost-savings as the principal purpose rather than safety and reliability.”
The suit accuses State Farm of violating Louisiana’s Unfair Trade Practices Act and Monopolies Law by “using scare techniques to steer Louisiana buyers to State Farm’s preferred repair shops and forcing shops to execute vehicle repairs cheaply and quickly, rather than in accordance with customer security and vehicle manufacturer performance requirements.”
Caldwell alleges that the company steers claimants to repairs shops that have partnered with State Farm beneath signed agreements that call for them to comply with repair standards set by the insurer, such as how extended the repair should take and what parts may be employed.
“In some situations, we’ve discovered that these components are nothing at all much more than used junk yard parts. In other folks, we’ve discovered them to be foreign knock-off parts of questionable top quality,” Caldwell stated in his written statement.
In an emailed response to a query from Insurance coverage Journal, State Farm Public Affairs Director Phil Supple stated the “description in this lawsuit is not in line with State Farm’s mission to serve the demands of its consumers, and our long, proud history of achievements in advancing vehicle security. We are reviewing the lawsuit and will have much more to share quickly.”
Supple pointed to State Farm’s lengthy-term involvement with the Insurance Institute for Highway Security and the insurer’s part in helping facilitate safety improvements such as car airbags and child passenger security seats, as nicely as fostering research and education aimed at defending young drivers.
In 2012, State Farm wrote a single-third of all private passenger, commercial auto liability and physical harm policies in Louisiana, with premiums totaling far more than $ 1 billion, according to the document filed with the court.
Louisiana vs. State Farm
Louisiana AG Files Suit Against State Farm Over Auto Repair Practices
