A series of policyholder-driven class-action lawsuits being pursued in California are assailing the prevailing market-rates
surveys conducted by insurers along with the companies' claim settlement amounts. At press time, four legal challenges had
reached the courts; four more were in the preparatory stages.
Certain insurer surveys — ostensibly designed to determine how much body shops are paid for collision repairs — are either
non-existent or rife with faulty methodologies, according to plaintiff lawyer John N. Quisenberry. The lawsuits already filed
are against Allstate, USAA, Progressive and the California State Automobile Association Inter-Insurance Bureau.
Quisenberry declines to discuss the other insurers being targeted, saying those actions remain in the due diligence stage
of the legal proceedings.
ABRN contacted the insurers named in the legal actions, but all of them declined comment and referred questions to Sam Sorich,
president of the Association of California Insurance Companies. Sorich claims the lawsuits are totally without merit and expects
the insurers to prevail. "The contract does not require the insurance company to pay whatever a body shop might charge," Sorich contends. "The company
is under no obligation to pay whatever fee is charged by the body shop."
Body shops are not an official party to the filings, which focus on the distress faced by vehicle owners forced to pay the
difference between a repairer's stated fees and the settlement amounts paid by insurers.
Insurers have an obligation to the policyholder to cover the cost inflicted by a covered wreck, says Quisenberry.
"It's not a co-pay like a health insurance policy," he says. "It's to pay for the actual cost value of the damage."
These alleged payment discrepancies result in shops and consumers being ensnared in the middle of a financial battle they
should not have to endure, says Quisenberry.
"They're being told, 'That's all we pay. Period,' " he says. "On any given claim either the body shop eats the difference
or the customer has to pay out-of-pocket. Either way, the insurance company gets to unilaterally declare what it's going to
pay, and then they leave the bill to the consumer."
Each lawsuit consists of complaintants who were policyholders with the particular company being sued. They were involved in
a crash and then told that the full amount of their claim would not be paid, according to Quisenberry, who is seeking class-action
status to include any customer who has faced a similar experience.
"We try to pick plaintiffs whose situation is representative of the others," says Quisenberry. "Apparently it's not a new
issue, as collision shops and consumers have consistently faced these conflicts. We represent a lot of policyholders and we
were contacted by a lot of policyholders who were unhappy with how their claims have been handled.
"This is for California vehicle owners, and it turns on hourly rates."
Quisenberry has long been filing lawsuits against insurance companies related to other types of underwriting issues, but he
found the problems within the collision repair segment astounding as he learned of the dissatisfaction being expressed with
auto policy procedures.
"I don't know if it reflects a market power [wielded by insurers] or if they're able to intimidate body shops," he says. "The
insurance companies seem willing to knock heads with the body shops all day long."
Quisenberry's puzzlement continued as he researched the consumer complaints he was receiving.
"We attended hearings and talked to body shops and others in the industry," he says. "If you're in California [and own a body
shop] you're welcome to get in touch with me. I learn something every time I talk to someone in the industry."
Quisenberry can be reached at (310) 785-7966 or http://www.quislaw.com/.
