IABA, shop owners file suit against 12 insurance carriers

April 11, 2014
IABA and 14 Indiana collision shops have filed suit against 12 insurance companies to stop “tortious interference and to protect consumer safety.”

The Indiana Autobody Association (IABA) along with currently fourteen Indiana Collision Repair Shops have filed legal action against twelve Property and Casualty Insurance Companies and their subsidiaries on April 2, 2014.

The suit accuses the insurers of "engaging in an ongoing, concerted and intentional course of action and conduct with State Farm acting as the spearhead to improperly and illegally control and depress the automobile damage repair costs." In addition, "The insurance companies (“Insurers”) are improperly intruding upon the relationship between the Shops and consumers, and placing the driving public at harm by their practices."

As it pertains to DRP shops, the suit also accuses the insurers of "engaging in an ongoing pattern and practice of coercion and implied threats to the pecuniary health of the individual plaintiff businesses in order to force compliance with unreasonable and onerous concessions."

Tony Passwater, IABA Executive Director, states, "For decades the insurers have interfered with the collision repair professional's obligation to restore the vehicle back to pre-accident condition as humanly possible. It has been well documented with the 1963 Consent Decree. Since then, over the last two decades, the pressure to compromise the repair quality and safety has increased with many insurer mandates and cost controls. It must stop, the driving public deserves a vehicle that has been repaired properly and is safe." Passwater continues to say, "I am sure that in the near future, possibly hundreds of shops will stand up and join this action, to allow our Industry to repair the vehicles properly for the safety of the consumer. It is unfortunate that the driving public are bombarded daily with billions of dollars of advertising the insurers are spending to convince them that they are a "good neighbor", or "on their side", but once this action begins to unfold, the real nature of what has been happening will certainly be revealed."

John Eaves Jr., lead counsel for the actions across the Country is following a very organized and strategic plan to maximize the effect of the lawsuit for our industry, Some of the top tobacco litigators in the country are now included as legal counsel for many states. Former attorney generals are counsel for many members. The fight is beginning to shift to a more even playing field.

The Indiana Autobody Association is a non-profit trade association in Indiana and is an affiliate member of the Automotive Service Association (ASA), and the Society of Collision Repair Specialists (SCRS).  The IABA represents approximately 1000 independent and dealership collision repair facilities in the State of Indiana. The Mission of the Indiana Autobody Association, IABA, is to Promote Professionalism and Consumer Awareness of the Automotive Collision Repair Industry in the State of Indiana. Tony Passwater can be contacted at: (317)290-0611 x201, or by e-mail at: [email protected].

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