Press Release Summary: Press Release Summary = Insurance companies are using illegal tactics such as steering to aide body shops in monopolizing the industry in exchange for low quality cheap repairs that ultimately hurt the consumer.
Press Release Body: Press Release Body = Small body shops are being forced out of business by large insurance companies through direct repair practices. Over the last thirty years Auto insurance companies have been trying to cut costs by signing contracts with body shops that help to monopolize the auto body repair industry and affect the safety and value of repaired cars A direct repair program is a business strategy which involves a body shop signing a contract with an insurance company. The contract stipulates three important terms. These terms are to move initial claims processing tasks to the body shop; the shop indemnifies the insurer from all legal suits for the repair even though the insurer claims to guarantee the work, and requires the shop to write estimates according to guidelines set out by the insurance company. The guidelines set by insurance companies involve using substandard used or aftermarket parts and not completing procedures required to restore the car to it pre-accident value. Direct repair contracts do not technically promise anything in return but the shop does receive rewards in the form of referrals from adjusters. Adjuster referrals range from suggesting a recommended body shop, telling the customer that they guarantee the recommended body shop's work, making derogatory comments about non-recommended body shops, refusing to pay for a rental car, refusing to pay the claim, and telling the customer what shop they have to take their car too. Making referrals in any other way than politely suggesting a body shop is called steering and is illegal in North Carolina. The unofficial agreement is "If you use our guidelines and make repairs cheap for us, we will make customers come to you instead of the other body shops". Neither party in the contract sees any benefit from the contract as it is written. The only way to benefit from the contract is if vehicles are steered toward the Direct Repair Shop. Evidence of a monopoly is shown that over 70% of all body work in the country is estimated to go through direct repair shops yet there are only a handful of Direct Repair shops in a given area. In the Triangle area three of the top insurers in North Carolina, Nationwide, GEICO, and State Farm, use very similar lists of recommended body shops in the triangle area. The body shops that show up on repeatedly on these lists are Coats Garage, Haddock Collision, True2Form, Rick Hendricks Collision, Johnson Collision Center, Mini-City Auto Body, and Capital Ford. Similar acts have been carried out by Insurance companies in the past. Shortly after World War II and up to the early sixties insurance companies set up organizations to control pricing through independent adjusters and agreements with body shops. Their practices at that time differed little from the ones they use now. In 1963 those practices cam to an end with a document signed by the major insurers and the Attorney General in 1963 called the 1963 Consent Decree. The decree outlined regulations to prevent contracts and agreements between insurance companies, adjusters, and body shops to control pricing or consumer choice. For the past thirty years these regulations have been largely ignored and un-enforced. These acts are creating a monopoly in the collision repair industry and forcing small independent shops out of business because the consumer feels they have no choice in the body shop they take their car too. This can only lead to more injuries and deaths as cars that have been repaired as cheaply as possible do not function the same way in their next accident.
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Contact Details: Albert Loyd / Beryl Road Automotive and Collision, 919 821 7226, customerservice@berylroadautoandcollision.com
2022
