November 1999 Editor's Page
I Repeat, Let the Repair Facilities Decide What Parts Work!

The smart money was right! State Farm lost their non-OE parts lawsuit in a big way- to the tune of nearly $1.2 Billion.

This lawsuit, I’m afraid, is only the beginning. More lawsuits are being filed to cover the time frame since the initial class period for this lawsuit against State Farm. Numerous other lawsuits have been filed against other insurers.

No doubt, this will keep lawyers on both sides busy for years to come.

As I stated in last month’s editorial, the time has come for insurers to get out of the business of specifying parts and procedures. Instead, they need to do more to foster quality and customer satisfaction. Now that the legal profession smells blood, albeit blood tinged with the smell of billion dollar judgments, insurers will find every claims practice designed to control costs termed a breach of contract by the legal profession.

The word on the street is that the next insurance company claims practice to come under the scrutiny of the legal profession is the low-balling of claims that go through drive-through claims centers. This practice, where insurers write exceptionally low estimates of damage, hoping that the insured will never have the vehicle repaired, is also believed to be on the wrong side of many insurers’ contracts with their policy holders.

At first, I must admit the very premise of these lawsuits filled me with disgust. The State Farm lawsuit, won by present and former policyholders will eventually be paid by policyholders- myself included.

But, I have slowly come to the realization that the legal profession is really just seizing on the public’s disdain for insurers in general. Heck, it worked for the legal profession when it came to the tobacco industry. And, it is growing in evidence regarding health insurers and their treatment of insureds and caregivers.

As I finish this editorial, I have just read a survey published in the American Medical Association’s Archives of Internal Medicine that states that over 57 percent of doctor’s would lie about a patient’s medical condition to secure an HMO’s approval for bypass surgery they felt was necessary. The report, covered by CNN’s Headline News on October 25, played up that doctors were protecting a patient’s rights- CNN’s report did not mention that these doctors were actually committing fraud and a breach of their professional ethics.

By lying, the doctors are just addressing what collision repairers have had to deal with for many, many years- insurers’ unnecessary involvement in the detail of their profession.

Insurers should find ways to direct customers towards those providers that are capable of providing quality, at fair prices, without their involvement in the minutiae of the repair process. As I stated last month, let the shops choose the parts and procedures that work. Doing so insulates the insurers, the ones who have had the targets painted on their back by the legal profession, from many potential lawsuits.