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State Farm and PartsTrader Defend Parts Program, Questioned about Benefits to Shops by John Yoswick
Perhaps the most interesting question at the latest Collision Industry Conference (CIC) came at the end of a 2-hour discussion regarding PartsTrader, the electronic parts ordering system State Farm is requiring its Select Service shops in four markets to use (see related cover story). Denise Caspersen, the collision division manager for the Automotive Service Association (ASA), asked State Farm’s George Avery the same question the association first posed to the insurer formally
five weeks earlier in a press release, namely, what benefit, financially or operationally, does required use of P a r t s Tr a d e r George Avery offer shops? “If State Farm is not able to clearly demonstrate the benefits of this pilot application to the repair community, then this application should not move forward,” ASA’s June 12 press release stated. See PartsTrader Defends, Page 40
PartsTrader Coverage Continues from Cover Stories See additional coverage of PartsTrader on pages 34, 35 and 42
PartsTrader Draws Blistering Reaction at CIC, Shop Owners Line Up to Comment in Person
See PartsTrader Pushback, Page 36
P.O. BOX 1516, CARLSBAD, CA 92018
A capacity crowd of more than 400 heard State Farm Claims Consultant George Avery and PartsTrader CEO Rob Cooper give an overview of the very controversial parts procurement system at the CIC in San Antonio. Avery, who is also the incoming Chairman of the CIC starting in January, has endured some harsh criticism since the details of the
PartsTrader program were first announced. Avery and Cooper outlined the program for the few unaware of it, and explained State Farm foresees shops orderRob Cooper ing all their parts (recycled, aftermarket and OEM) from a single provider, PartsTrader.
Change Service Requested
by Autobody News Staff
VOL. 30 ISSUE 7 AUGUST 2012
CDI Proposes Amendments to Standards Regulation on Usage of Aftermarket Parts The California Department of Insurance (CDI) has submitted proposed amendments to its Standards for Repair and Use of Aftermarket Parts Regulation. Included in language is a requirement that insurers disclose in writing if they require “that such parts are of like kind, quality, safety, fit and performance as original equipment manufacturer replacement crash parts.” “No insurer shall willfully depart from or disregard accepted trade standards for good and workmanlike repair in the preparation of claim settlement offers or estimates prepared by or for the insurer,” reads the proposed amendment. “An insurer shall not prepare an estimate that is less favorable to the claimant than the standards, costs and guidelines provided by the third-party
automobile collision repair estimating software used by the insurer to prepare the estimate.” The amendments also specify that the insurer would incur the cost of replacing non-original replacement parts if they require those parts to be used. Insurers specifying the use of nonoriginal equipment manufacturer replacement crash parts that the insurer has implied, actual, or constructive knowledge are not equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance, or do not otherwise comply with this section, shall pay for the costs associated with returning the part and the cost to remove and replace the nonoriginal equipment manufacturer part with a compliant non-original equip-
The Superior Court of the State of California has ruled that James and Patricia Scott are entitled to diminished value from Mercury Insurance Company, notwithstanding that their vehicle had been repaired. Judgment was entered, and no appeal was filed within 60 days as permitted by California law. Thus, the judgment was made final. What distinguishes this case from all others, says Montie Day, attorney for the plaintiffs, is that it’s an “unlimited jurisdiction case,” meaning that it has sufficient legal effect, or “collateral estoppel,” on future litigation or claims made by Mercury. “Thus, for future claims against Mercury Insurance Company, the doctrine of ‘collateral estoppel’ should bar Mercury from alleging that a claimant is not entitled to consideration for diminished value in California,” says Day. “Furthermore, the denial of such claims on the basis that
Californians are not entitled to claim diminished value against Mercury would be subject to a violation of the California Insurance Code and should be reported to the state’s insurance commissioner.” For years, Day claims that Mercury has denied in California that it or its insureds are liable for diminished value based upon California law. “This, among other practices, including suggesting that the victimclaimant can avoid the damages from diminished value by simply selling the vehicle to an individual without disclosing that the vehicle was in an accident, has resulted in Mercury avoiding such liability on a massive scale in that the average consumer/insured does not have the ability to litigate against such insurance giants,” says Day. “If Mercury continues its current practices, the California state insur-
See CDI Aftermarket, Page 20
Court Rules California Couple Entitled to Diminished Value Claim Against Mercury Insurance
See Diminished Value, Page 3
Presorted Standard US Postage PAID Oceanside, CA Permit #236