Nebraska Autobody Association

Shop Talk Online Newsletter

March 12, 2007

^$17 Million Verdict For Aftermarket Parts Use

After a month-long trial a jury in Jackson County Missouri awarded some 315,000 claimants over $17 million in damages for American Family’s use of aftermarket parts. Originally filed in 2000 the lawsuit alleged that aftermarket parts including fenders, hoods, doors and panels were of a lower grade than OEM and pose a potential safety hazard. The lawsuit also argued that insurers reduced claims payments by omitting certain repair procedures such as rust-proofing, undercoating and others that I-CAR and CIC accept as being necessary. A spokesman for American Family said that the company was in compliance with Missouri law  “We followed Missouri law to the tee, as far as that’s concerned. ”American Family said it plans to appeal the ruling.

Nebraska Bill Gets Priority Status—Just In Time

LB 674, a bill that would restrict an employer's disclosure of employee Social Security Numbers SSNs has become a Priority Bill. Each senator can make one bill a priority during any legislative session, which increases that bill's likelihood of being placed on the general file and voted into law. Collision repairers in Nebraska first raised concerns over this issue, last week, after receiving information that one insurer appeared to be asking for employee SSNs for purpose of conducting background checks. The concerns expressed by repairers through Nebraska senators and the Nebraska Attorney General may have helped move this bill into a priority status.

New York Body Shop Files $40 Million Lawsuit

NorthState Custom of Bedford Hills New York announced today that a lawsuit has been filed in the Westchester County Supreme Court Of The State Of New York. The suit alleges that for the past several years, including but not limited to 2001 to present, Progressive engaged in a massive scheme whereby it steers its insured’s to its DRP program shops by making claims that the independent shops might not be guaranteed, or fully covered, or overpriced, or that the work will be unduly delayed. It has implemented this massive scheme by having its servants, employees, adjusters and/or appraisers make misleading and knowingly false and/or exaggerated statements concerning NorthState, and other independent auto body shops, to its insureds/claimants, in an effort to coerce the insured/claimant to have their car repaired at Progressive’s DRP shop. In the case of NorthState, defendants have habitually coerced its insureds/claimants to have their vehicle removed from NorthState and brought to a ‘DRP’ upon defendants’ representations to their insureds/claimants that NorthState is not a reputable body shop. The suit further alleges that Progressive has violated thru it’s unfair claims practices New York State regulation section 2610 0f the insurance law that says: "An Insurance Company cannot require that repairs be made to a motor vehicle in a particular place or repair shop. You have the right to have your vehicle repaired in the shop of your choice". The suit further claims that every aspect of Progressive’s scheme is motivated by money and greed without regard for their insured(s), the businesses that serve their insureds, and the public/consumer at large. The lawsuit specifies 8 separate causes of action.

NABA Receives High Response To Best Insurer Survey

The number of shops that filled out NABA’s Best Insurer In Nebraska survey is at an all-time high. The association will continue to accept surveys. If you have not filled out a survey you can do so online at http://www.nebraskaautobody.com/surveys/2007/bestinsurer.htm

NABA’s Historic Convention Nears

The Nebraska Autobody Association’s 30th Anniversary Convention will be held on April 13-14 at the Interstate Holiday Inn in Grand Island. Don’t miss this chance to revisit with friends, share memories and attend many great programs and events. Exhibitor spaces are filling up. Complete convention information is available from the NABA web site at http://www.nebraskaautobody.com

National Survey Identifies States With Lowers Repair Labor Rates

According to data in Mitchell’s Winter 2007 Industry Trends Report, the following states had the lowest rates in the nation. Massachusetts $34.55 Tennessee $36.97, Maryland $37.05, District of Columbia $37.55, Georgia $37.80, West Virginia $37.82 Florida $37.99.

Senator's Remarks Echo Coast Frustrations

Anger and frustration over insurer’s handling of property claims arising from Hurricane Katrina continue to build. Mississippi Sen. Trent Lott, who lost his home in the storm, testified before the Senate Judiciary last week vowed to fight back. Lott called the actions of insurers ‘reprehensible.’ Lott vowed to push for legislation that would require the government to investigate insurers. Judiciary Committee Chair, Patrick Leahy, was even more critical of insurers. Leahy also introduced S. 618, a bill that would scrutinize insurance practices. Leahy’s statements will be published in the next Surgeons of Steel.

ASA States Position on Third-Party Auditing

The Automotive Service Association (ASA) board of directors has approved a policy and position statement on third-party auditing presented by the ASA Insurance Subcommittee.  The approved statement presents the association's position that to provide the motoring public with the highest level of collision repair - ensuring safety, quality and craftsmanship - ASA recommends an estimate written with integrity and utmost accuracy.  Estimate negotiations should occur only between parties who have physically inspected the damaged vehicle to ensure accuracy and the highest level of quality and customer care. ASA deems the practice of third-party auditing, in which an estimate is reviewed without physically inspecting the damaged vehicle, as less than fact-based and detrimental to the integrity of collision repair.   

State Farm Exec Gets Hefty Salary Increase

According to the Associated Press, State Farm’s top man received an 82% salary increase after the insurer posted record profits. Chairman and Chief Executive Officer Ed Rust Jr. got a $5.26 million raise. He earned $11.66 million in 2006 with a base salary of $1.77 million and results-based bonus of $9.89 million.

Information in this newsletter while obtained from sources deemed to be reliable, cannot be guaranteed. Readers should consult with manufacturers’ directions, manuals and/or appropriate business professionals before acting on any information reported herein. The reports represented herein are those of the authors. It should not be implied that these opinions are those of the NABA directors, members, or the publisher.