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VT Body Shop Owner Scores Victory in Campaign Against Short-Pay by Insurers by Alan J. Keays, VTDigger.org
The Vermont Supreme Court has sided with a body shop in its latest legal challenge to a national insurance company over claims the firm failed to pay enough to cover needed repairs to vehicles that had been in collisions. The case has been working its way through the state’s legal system for about four years, starting in 2015 when Parker’s Classic Auto Works of Rutland brought suit against Nationwide Mutual Insurance Co., which is based in Ohio.
Mike Parker, the repair shop’s owner, said Monday he recently got a call from his attorney, Robert McClallen of Rutland, letting him know of the high court’s ruling. “I was like finally, ‘Hallelujah,’” Parker said. The suit against Nationwide was brought by Parker’s on behalf of consumers in instances where the insurer refused to pay the full amount of the repairs the shop made to vehicles. It’s a practice known as short-pay. The Nationwide lawsuit is part of an ongoing campaign by Parker’s See Short-Pay By Insurers, Page 18
SCRS Event Discussion on Insurance Regulation, Workforce Development by John Yoswick
Body shop associations and automakers increased efforts this year to get state legislation that would mandate the use of OEM repair pro-
cedures for collision repair claims. Since these efforts, insurance regulators in some states have shared writ-
ten statements relative to any such obligation on insurers. Insurance regulatory agencies in about half of all states have responded to a letter the Society of Collision Repair Specialists (SCRS) sent out last year asking, among other things, if anything in their state “holds insurers and insurance policies sold in your state accountable to recognize manufacturer documented procedures as a basis for settling claims.” During a SCRS event earlier this year, the association’s Aaron Schulenburg said the written responses See SCRS Event Discussion, Page 44
AUTOBODYNEWS.COM
Vol. 37 / Issue 8 / August 2019
Uncertain Times for U.S. Auto Industry by Dave Leggett, just-auto
A new Edmunds report says 2019 has been a year of contrasts for automakers as they struggle to find a new normal amid rising interest rates, waning demand, dramatic growth in the used market and uncertain government policies. “Automakers are fighting a war on multiple fronts right now: Old cars are piling up on dealer lots, a glut of affordable off-lease vehicles are luring shoppers into the used market and even with the Fed anticipated to lower rates in July, higher interest rates are here to stay,” said Jeremy Acevedo, Edmunds’ manager of industry analysis. “Strong economic indicators such as consumer confidence and low unemployment are keeping sales at historically elevated levels, but automakers have also been relying too heavily on fleet sales to
keep these numbers up which isn’t a sustainable model.” According to Edmunds data, new vehicle sales are down 2.4% year-over-year through May and Edmunds analysts maintain their forecast that 16.9 million new vehicles will be sold in 2019. In addition to a deeper dive into sales figures, the Midyear Report also reveals: A strong economy is propping up what could be an even weaker auto market. Unemployment is at 3.6% - the lowest it’s been since 1969. Consumer sentiment is at its highest level of 2019. Elevated inventory levels are setting the stage for attractive deals this summer. Even though inventory dipped below 4 million units in May, analysts say this is still too high given current demand. Interest rates are making it more expensive for automakers to offer bargain-basement See Uncertain Times, Page 3
New Louisiana Law Aims to Protect Policyholder Choice of Repair Shop by Staff, Insurance Journal
A new law in Louisiana aims to ensure that auto insurance policyholders have the option to choose a particular motor vehicle repair shop. Under Act 317 (House Bill 411), which has been signed by Gov. Jon Bel Edwards, insurers are prohibited from recommending specific auto repair shops unless their insureds are clearly informed that they are not required to use the recommended shop. According to the Coalition Against Insurance Fraud, insurers are allowed to inform consumers about reputable repair facilities and warn against body shops suspected of committing fraud. However, the bill states: “An in-
surer shall not engage in any act or practice of intimidation, coercion, or threat to use a specified place of business for repair and replacement services.” The act provides for fines for violations of the law:
• $1,000 for a first offense • $2,500 for a second offense within a 12-month period, $2,500 • $5,000 for third or subsequent offense within a 12-month period
The act also gives the state’s insurance commissioner the power to suspend or revoke insurance licenses of violators. We thank the Insurance Journal for reprint permission.
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