Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

Another Victory for OE Parts

This will certainly send a strong message to other insurers currently specifying imitation sheet metal on their repair estimates.

Settlement Reached with Farmers Insurance Group Over Inferior Replacement Car Parts

A settlement was reached on December 14 between Farmers Insurance Group and a nationwide class of plaintiffs who sued to resolve claims that certain “non-OEM crash parts” (generally the sheet metal exterior of a car or truck, such as hoods and fenders, that were not made by, or for, the vehicle’s original maker) did not meet the quality standards required by Farmers’ insurance policies. In addition, plaintiffs claimed that Farmers breached its insurance policies by using those parts to determine how much money to pay on an insurance claim.

OEM parts are those parts that have been designed and manufactured to exacting standards established by the car and truck manufacturers, and meet rigorous quality and safety requirements. Many non-OEM parts, or “imitation” parts, do not meet these standards. Although they may look fine when the car or truck is first repaired, problems often arise later. The parts may not fit correctly, the finish on the parts may not look as good or wear as well as the rest of the car, the parts may cause rain or wind to channel incorrectly, causing problems with noise and visibility, the parts may rattle, dent more easily or improperly vibrate, known as “oil canning.” Non-OEM parts that do not have the appropriate amount of paint or rust coating may also rust earlier than OEM parts. Non-OEM parts may also not be fastened properly to the car or truck, or may rust out easier at the fastening points. Non-OEM hoods may also present serious safety concerns.

The settlement will provide cash payments to customers of Farmers between June 15, 1996 and November 1, 2006 who were insured by Farmers Insurance Exchange, Mid-Century Insurance Company and other entities affiliated with Farmers. Eligible members of the class will receive payments of between $20 and $40 per part, depending on the portion of the car that was replaced. A claim form and other information are available at http://www.lerachlaw.com/lcsr-cgi-bin/mil?templ=cases/farmers/settlement.html. If you are not sure if you are entitled to receive a cash payment, you should submit a claim form.

In addition, class members have a full warranty on non-OEM replacement auto parts for as long as they own their car or truck. If there is a problem with the non-OEM part, the part will be replaced at no cost to the class member. Class members are encouraged to monitor their automobiles for signs of decay or other damage caused by the use of non-OEM parts.

“After years of court battles and a trial, class members will finally receive what they paid for when they bought their insurance policies. Eligible class members will receive cash payments, and anyone who has a problem with an imitation part will be able to have that part replaced under Farmers’ warranty. If you are not sure if you are a class member, please submit a claim form,” said Tim Blood, lead counsel for the plaintiffs with the law firm Lerach Coughlin Stoia Geller Rudman & Robbins in San Diego.

Farmers Insurance operates under a variety of names in different states, including:

• Farmers Insurance Exchange
• Farmers New Century Insurance Company
• Mid-Century Insurance Company
• Illinois Farmers Insurance Company
• Farmers Insurance Company, Inc.
• Mid-Century Insurance Company of Texas
• Texas Farmers Insurance Company
• Farmers Texas County Mutual Insurance Company
• Farmers Insurance Company of Arizona
• Farmers Insurance Company of Idaho
• Farmers Insurance of Columbus, Inc.
• Farmers Insurance Company of Oregon
• Farmers Insurance Company of Washington
• Truck Insurance Exchange
• Civic Property & Casualty Company

©2006 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?