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How many unsafe vehicles have to come out of “Direct Repair Program” or “Concierge” shops before consumers, legislators, and governmental officials say “Enough is Enough!  We want cars traveling our roads to be safely repaired!”?  Yet another Progressive concierge-repaired vehicle was discovered recently to have been unsafely repaired.  In this instance, the driver was lucky that the second accident didn’t result in dire injury.

Officials: Car Repair ‘Steering’ Cuts Corners - I-Team News Story - WFSB Hartford

I know I have been trying to help the Attorneys General and Departments of Insurance across the country understand what an enormous problem insurer involvement in the repair process is because it leads to corner-cutting and other problems that have a tremendous negative impact on consumers  to enable insurers to save money.

States require us to buy auto insurance if want to be able to drive.  We are a captive market for them.  So, why aren’t our government officials looking at all of these problems and allegations of unsafe repairs in these insurer-repair shop networks?  Why are we having to twist their arms to get assistance?  Do we really have to wait until someone is killed or horribly injured before we make changes?  Let’s hope not.  Especially because that death might be your loved one.

Technorati Tags: insurer, auto insurance, collision repair, accident, body shop, direct repair program, concierge

California joining other locals to stop insurance company referrals to “preferred” body shops.

Steered wrong? | Santa Rosa Press Democrat // News for California’s North Bay and Redwood Empire

Technorati Tags: insurer, auto insurance, collision repair, auto body, accident, legislation

Despite the name, the Tata Nano is a car. Yes, a motor vehicle — at a cost of $2,500. Of course, that reminds us all of the Yugo days (OK those of us who are actually old enough to remember the Yugo). India’s auto maker recently unveiled the world’s most inexpensive car. According to Body Shop Business, a leading collision repair industry magazine, the average vehicle repair cost is around $2,500, thus, virtually guaranteeing that a wreck in a Tata Nano is a total loss. Now, if only it ran on an available fuel source other than a petroleum product. That would be really great.
HT: Ed of Blawg Review and Infamy or Praise: It’s getting better all the time.

Although losing twice before in a Texas district court and before a 5th Circuit appellate court, Allstate Insurance and Ken Starr are hoping to convince the U.S. Supreme Court to take review of the Constitutionality of the Texas statute prohibiting insurance companies from owning collision repair shops.

Although Federal District Judge Ed Kinkeade wrote a compelling and well-reasoned decision identifying the inherent conflict of interest involved with insurers owning body shops, which was affirmed by the 5th Circuit, Allstate didn’t like the answer.  Making some of those moth-eaten arguments most of us haven’t seen since law school, Allstate will once again argue that the Texas law violates the Dormant Commerce Clause of The Constitution.

 Well, maybe Mr. Starr will fair better back in Washington, D.C. where his “starr” quality may have more appeal.

Allstate v. Abbott, U.S. Suprme Court Docket

Senate OKs CAFE hike - Automotive News

With the current legislative session running out of time, the Senate finally approved the increased CAFE standards that the House has already voted on and passed. All we need now for the new CAFE increases — moving vehicle fuel efficiency up to 35 miles per hour by 2020 — to go into effect, is for the President to sign the bill. Some of Senators supporting passage of the higher CAFE standards declared this to be a victory for the U.S. Perhaps I am just being cynical, but it’s a victory that came 20 years too late.

When I drove the Hummer H2, as much as I liked the vehicle, I cringed because of the wasteful consumption in which I wallowed. I want Hummers to be the most fuel efficient vehicles on the market, because they are comfortable, stable, and so much fun to drive. But I want to feel good about myself driving one, too. So, my challenge to you, AM General, is to make any future Hummer the most fuel efficient vehicle available in its class, and let my dream come true.

I-CAR - Current Events/News: e-newsletters: Advantage Online: December 3, 2007

I-CAR recently published its Advantage Online Newsletter for December questioning whether general sectioning methods were appropriate for today’s modern vehicles. I-CAR’s conclusion? General sectioning methods are no longer recommended.

If you visit the newsletter edition link above, you can access a video demonstrating the reduced strength and earlier failure point of high-strength boron alloy steel when exposed to even small amounts of heat typically used in the repair process. The video presents a useful, visual demonstration that is easy to understand and can assist people without engineering or collision repair backgrounds to understand just why it is a bad idea to ignore manufacturer repair recommendations or fail to investigate just how your vehicle is to be repaired.

I’ve received a number of comments from people about the Collision Repair Code of Ethics and have asked permission to share those comments here so that others can consider them. Don’t forget, you can comment directly here at AutoMuse® — after signing in. Comments don’t appear immediately, unfortunately, because of spammers. Real comments get posted — even when they disagree or are controversial — so don’t hesitate to post because you have a different opinion.

A quick scan of your code of ethics brought to my attention the part that speaks to damage analysis. I believe that your expectation on that matter and the 10% deviation is unrealistic. I notice also the absence of any discussion of a professional being compensated for this damage analysis. I believe that need be part of any document such as this that outlines the professional conduct of the trade. I will review more and forward comments unless you are not interested. Thank you for letting me be part of this process…

Mark Cobb
Cobb’s Inc D/B/A Cobb’s Collision Center
Accident Inspection Services
7 Heathwood Drive
Windham, ME 04062

While attending some outstanding presentations on the first day of the Coalition for Collision Repair Excellence (CCRE) fall seminar in October of 2006, I realized that one of the significant impediments the collision repair industry faced in business was that it had no uniform principles governing ethical conduct. I was extremely troubled by that fact given that we all put our lives in the hands of collision repairers on a consistent basis. Even if the vehicle you are driving has never been involved in an accident, what do you know about the condition or safety of the vehicle on the road in front of you, in the opposite lane, or carpooling your kids to soccer practice? As I have often said, if attorneys or accountants act unethically, the typical result is that someone loses money. But if doctors or collision repairers act unethically, people can die.

With that thought in mind, I set about creating the first-ever Collision Repair Code of Ethics. It is designed as a framework for collision repairers nationwide to adopt governing principles for ethical behaviors of those involved in the industry and to establish a mechanism of self-governance to ensure those ethical mandates are met. I offer it as a set of principles that can be molded and adapted to meet the requirements of each state’s laws, and to assist industry members to address conflicts and pressures they experience from outside interests.

I have little doubt that the Collision Repair Code of Ethics will spark significant discussion within the collision repair industry. To assist in that discussion, there is a conference organized by ACAR scheduled October 19^th, 2007 at the National Press Club in Washington, D.C. Information about how to participate at this historic meeting is available here. ACAR Conference Information

Thank you to all of the people who provided information for the development and refining of the Collision Repair Code of Ethics – particularly Wade Ebert of American Autobody in Springfield, Illinois, whose insight is always meaningful.

If you are or have been a party claiming diminished value against a Progressive insured in Connecticut, you might have been put off by a misleading statement by a Progressive claims representative. One such claimant’s attorney was told blatantly that the Connecticut Insurance Department refuses to allow insurers to offer diminished value coverage, and, therefore, no diminished value claims can be paid. CT Diminished Value Correspondence

Say, what?

Here is “Claims Specialist” Heather Hinckley’s July 9, 2007 response to a third party claimant’s demand for the inherent diminished value suffered as a result of a Progressive insured’s negligence:

At this time, the State of Connecticut, Department of Insurance does not allow Progressive Insurance or any other company to sell Diminished Value coverage for a vehicle. As the State doesn’t allow sales of the Diminished Value coverage, we are not able to afford Diminished value coverage. For these reasons, but not limited thereto, Progressive Insurance must respectfully deny your claim for damages. I am sorry that I could not advise you more favorably regarding this matter, but trust that you will understand our position.

Counsel for the claimant took the issue up with the Connecticut Insurance Department, which responded on September 26, 2007 stating that:

Heather Hinckley of Progressive Insurance has responded that the Connecticut Insurance Department does not allow diminished value coverage to be sold and therefore claims for diminished value cannot be made in Connecticut. In response to Ms. Hinckley’s assertion this is not correct. The Connecticut Insurance Department does not prevent claims made for diminished value and an insurer can request to include provisions of diminished value in their policy.

The CID also included a letter from a Progressive Claims Manager responding to the complaint that said:

I am writing in reply to your inquiry dated Aug. 21, 2007. I reviewed the complaint as well as the claim file and am able to provide you with the following information.

The letter sent by Heather Hinckley dated July 9, 2007, is incorrect.

Well that’s nice. Glad we got that all cleared up.

Of course, several questions remain. Has the Connecticut Insurance Department taken any action to ensure this misstatement of Connecticut law/regulation does not occur again? Has Progressive taken any action to make certain that its employees do not make this misstatement of Connecticut law/regulation again? But the one that has me really wondering is whether Heather Hinckley is still a “claims specialist” or whether she’s been knocked down to “claims representative”, “file clerk”, or “doughnut person”? After all, inquiring minds want to know.

It also bothers me that someone labeled a “claims specialist” by an insurance company can’t tell the difference between what is owed to an insured (first party) and what is owed to someone making a claim against an insured (third party). Ms. Hinckley’s comment about Progressive not offering “diminished value coverage” has nothing to do with a third party claim. The only portion of the policy any third party cares about is the section that tells the insured, “We’ll pay for anything for which you become liable up to the policy limits” (excepting, of course, intentional torts). How much of a specialist is a claims specialist who can’t tell the difference between a first party and third party claim? That’s covered in Insurance 101.

Probably, the most pertinent question is how many other people accepted the Hinckley line about diminished value not being permitted to be paid and simply went away? Well, Connecticut, your Insurance Department has spoken. Demand your diminished value. It’s really not illegal after all.

Lucky for this customer that she went to an independent collision repair facility rather than one willing to simply follow the dictates of an insurance company bent on saving money.

Williamsburg, Ohio shop owner Jim Krotchen, of All Makes Collision Repair Service, determined that his customer’s 2002 Honda CRV needed to be repaired using a new suspension, rather than one coming from a total loss vehicle from the salvage yard.  In Krotchen’s opinion as a collision repair expert — who is liable if there is a problem with the repair — installing a used suspension on this vehicle was an issue of safety.  There simply was no way of ensuring that the salvaged suspension had not been structurally fatigued.  As a result, Krotchen installed a new Honda suspension on this consumer’s vehicle.

The insurer, whose adjusters often receive no more than two weeks of “training” before being cleared to write estimates for repairing other people’s vehicles, decided that a used suspension would have been just fine for this repair and refused to pay for the new suspension.  As a result, All Makes Collision Repair Service is being forced to sue for the remainder of the repair bill.

It never ceases to astonish me that insurers feel justified in putting people’s safety at risk simply to save money.  This isn’t an issue of waste or extravagance.  This is about ensuring that this consumer’s vehicle is safe to drive and, thereby, protecting her, her passengers, and every other traveller on the road.

PRESS RELEASE: Cerberus Takes Over Majority Interest In Chrysler Group and Related Financial Services Business for $7.4 Billion From DaimlerChrysler - Automotive News($)

So, Cerberus Capital Management has agreed to buy a controlling interest in Chrysler and Chrysler Financial Services. Let’s recap, shall we?

In 1998, Daimler-Benz paid $36 Billion for Chrysler under the leadership of JÜrgen Schremp. That transaction occurred when the dollar was strong, so $36 Billion really meant something.

Rather than miraculously having the Mercedes brand heal the traditional ills of Chrysler group products — pounding brakes, unreliable transmissions, electronic failures — Chrysler seemed to have infected Mercedes. For the first time, we began seeing significant product liability lawsuits against Mercedes. And they were entirely justified.

Not quite a decade later, the big “D” is bailing out, it’s leading products badly damaged in reputation and performance, without much to show for its good time. Cerberus is paying $7.4 Billion for slighly over an 80% share of Chrysler and CFS. That’s $28.6 Billion less than the big D paid with dollars of a higher value. The 2007 dollar is performing woefully against the Euro, so Cerberus’ 7.4B in today’s dollars is truly a tiny fraction of what the big D paid in 1998 for the privilege of owning Chrysler. Ouch.

By the way, isn’t Cerberus the three-headed dog who guards the entrance to the underworld to make certain none of the dead escape. Yeah, I thought so.

	04-05-07 | New York collision repair shops and consumers are tired of insurers trying to push them to give business to the insurers’ “preferred” shops. Shops allege insurers use any tactic to coerce consumers to patronize their contract shops. After being accused of committing fraud, one shop owner threw down the gauntlet and filed suit against Progressive for $40 Million.
http://www.fox23news.com/mediacenter/local.aspx?videoId=57363

NY appears to be following closely behind CT on its interest in protecting consumers and halting the coercive practices of insurers.  “Steering” is the term used to describe an insurer’s attempt to direct claimants to shops with which they have an agreement.  That agreement doesn’t necessarily contain terms that are good for consumers.  But they are always full of terms that are great for insurers, like ensuring that shops agree to repair vehicles per insurance company dictates and to completely indemnify the insurer from any fall-out related to the claim.

Just about a year ago, I had a high-powered investment banker/venture capitalist say to me that if a big company hadn’t pounced on a particular idea for a new product or service, it must have already looked at and rejected the idea as unprofitable because big companies are run by smart people who know what they are doing, and they have the ability to hire outside experts to look at the question if they don’t have the in-house expertise.  I really had to bite my tongue and be politic, because what had been said to me was idiotic drivel, and I was surprised he didn’t know that.

Take a look at the automotive industry as a prime example.  The Detroit 3 are so far out to sea on how to profitably manage a large company and have been for so long that it’s actually astonishing they still exist.  And, in the dire straits they currently find themselves in, they go right on making irrational decisions that undermine the very companies they are supposed to be saving.

Take General Motors’ recent SEC filing on the bonuses and stock options the company granted to its top executives.  GM has announced that it is giving millions of dollars in stock, and stock options (and there is a plan afoot to allow GM executives to convert their options to cash from the company) to its top 18 executives.  Yet, GM posted a $2 billion loss last year, and a $10 billion loss the year before.  Call me idealistic, but it seems to me that a company that has not earned a profit has absolutely no business paying people in control of the company any bonuses.  After all, where does the money for bonuses come from when you are consistently reporting losses?  Worse yet, how do you pay bonuses to the people responsible for the health and well-being of the company when they are driving it into the ground?

GM’s timing could not possibly have been worse.  It is about to negotiate a new contract with the UAW, and everyone expects GM’s management will ask workers for concessions on labor costs, health care, and pension benefits.  How do you ask people who earn a fraction of what the top executives make to give up current and future benefits, when you are paying the company’s wealthiest workers far more than their salaries as a reward for their decisions that have been bad for the company overall?

  (more…)

Welcome to AutoRepairLegal.com

Collision Repairers and Consumers should all know about the launching of AutoRepairLegal.com, a website enabling people to peruse the laws and regulations of a particular state, and to submit information for upload.

Auto Body Association Protest
	03-28-07 | Members of the Auto Body Association of Connecticut protested at the State Capitol in Hartford in support of legislation to tighten the law against auto insurers steering drivers to specific repair shops. Videographer Alan Chaniewski          Video, as requested.  This video only plays with Windows Media Player.  Click below to download.
You’ll need a version of Windows Media Player 7 or higher to view the video. If you need to download it, go to http://www.microsoft.com/windows/mediaplayer/en/default.asptarget=_blank The video player is supported by Microsoft IE 5.0 and above.

Š

 Don’t look now, but there is a convoy of tow trucks in Connecticut’s capitol.

Frustrated with the fact that they have to pay annual licensing fees, comply with regulations of the Department of Motor Vehicles, maintain expensive insurance policies, and pay high rates of workers’ compensation to operate their businesses, while employees of Progressive’s Concierge facility in the Hartford area admittedly disassemble customers’ vehicles without a repair license, members of Connecticut’s repair and towing industries are taking their fight to Progressive’s doorstep.

And their message is clear.  Stop letting Progressive compete without making it comply with the repair licensing laws. 

Attorney General, Richard Blumenthal, is on board with the repairers and tow companies.  Literally.  Blumenthal is scheduled to give a press conference from one of the tow trucks.  After the press conference, the convoy is headed to Progressive’s Concierge facility in Newington, Connecticut — which Progressive’s website identifies as its Hartford Concierge facility. 

Unable to face the rumble, Progressive is reportedly shutting down that facility for the day.

Good Samaritan law may not apply - USATODAY.com

A colleague forwarding this story said:

In Germany you are required by law to stop and help to the best of your abilities.  In the US apparently you don’t and now after reading this, I’d definitely think twice or three times before I even consider about helping anybody.

And we wonder why people in the U.S. hesitate to stop and give help to others?

As if buying a car is not complicated enough, at least one BMW dealer in California has added yet another layer of complication to the activity.  A well-spoken blogger in California wrote about her attempted car buying experience that culminated in a “No Sale” all because the dealership refused to sell her the vehicle unless she first provided her right thumbprint.

In her quest to purchase a BMW X3 (a nice vehicle, I might add), Lorna furnished her driver’s license and marriage certificate (her name had changed), and her credit report was run by the dealership — although she asserts it was done without her knowledge.  I’m not suggesting this is untrue, but she must have supplied her social security number on the purchase application (the forms usually have a pre-printed section requiring one to fill out that information) or the dealership would have had to have obtained her SSN somehow to run the credit history.  Perhaps California is a state that still has a driver’s social security number stamped on its face.  (I have always been puzzled by the fact that Departments of Motor Vehicles and state universities thought it was a great idea to use one’s SSN as a driver’s license or student identification number.  They simply helped create the identity theft debacle now at hand.)

Nonetheless, Lorna, of lornamatic.com, discovered that the BMW dealership refused to sell her the X3 unless she voluntarily provided her right thumbprint and authorized the dealership to obtain her DMV Driver’s License Record — which, of course, would contain a copy of her right thumbprint that she had to supply to the California DMV to obtain her driver’s license.  Lorna was doubly surprised to find that the dealership intended to keep the copies of her personal information, but the personnel there were unable to provide her with information regarding the company’s privacy policy and data security procedures.

I was intrigued by Lorna’s experience, so I took a look to see what I could find about California’s laws on the subject.  Here’s what I discovered:

1. The California Constitution, Article I, Section 1, ensures citizens of that State a right to privacy.
2. California has enacted its Information Practices Act to provide protection from the dissemination of personal information.  Cal Civ Code § 1798.81.5, however, does not apply to activities taken by “(4) An entity that obtains information under an agreement pursuant to Article 3 (commencing with Section 1800) of Chapter 1 of Division 2 of the Vehicle Code and is subject to the confidentiality requirements of the Vehicle Code.”
3. Cal Veh Code § 1808.5 states that, “Except as provided in Section 22511.58, all records of the department relating to the physical or mental condition of any person, …are confidential and not open to public inspection.”
4. Perkey v. DMV, 42 Cal. 3d 185; 721 P.2d 50; 228 Cal. Rptr. 169 (1984) held that the California DMV could properly require the provision of a thumbprint as a prerequisite to obtaining a driver’s license, but that the the thumbprint was confidential pursuant to the California Vehicle Code and the Information Practices Act. 

While in the past this provision has generally been applied to protect the confidentiality of what might ordinarily be termed “medical” information — such as information relating to an applicant’s eyesight (see 55 Ops.Cal.Atty.Gen. 122 (1972); 26 Ops.Cal.Atty.Gen. 136 (1955)) — a reasonable interpretation of the provision affords protection of that portion of a driver’s license application that reveals the applicant’s fingerprint.

Such an interpretation does not conflict with the statutory language because a fingerprint clearly relates to the “physical condition” of the applicant. Also, it furthers the general underlying purpose of the provision, which is to protect the confidentiality of information revealed by a driver’s license application where exposure will improperly infringe the applicant’s privacy rights.

Id. at 194, 721 P.2d at 55, 228 Cal. Rptr. at 174.

So, now we know that her thumbprint could not be obtained by the dealership from the DMV indiscriminately, the operative question is whether she can consent to the release of that personal information.  It seems highly likely that she can, which again raises a question as to the dealer’s personal information data privacy and security policy.  Clearly the dealer has an obligation to protect the information Lorna provided to it as a requirment of the Information Practices Act.  Had the dealer obtained information about her from the DMV, then the dealer would have to maintain the information securely as a requirement of the Vehicle Code.

These, of course, are only my observations and I would welcome any additional information or thoughts from my colleagues who practice in California.  Lorna’s experience is just a little too much like living in a totalitarian regime for my taste.  After all, if we weren’t so busy collecting all of this information about people, we wouldn’t be able to use it to pose as the upstanding citizen that the data collection says we are.  Don’t forget, Big Brother is watching you.Š

Today sees the advent of a new auto-related site called HealthyCar.org, at which consumers can investigate and research the “healthiest” and most unhealthy vehicles based on their chemical components.  According to HealthyCar.org, that ”new car smell” is actually caused by toxic chemicals and is dangerous to your health. 

I suppose this could be a marketing tool for selling used cars.

Everybody ought to have a … beetle.  A VW beetle, that is.

I am currently driving a 2006 Volkswagen Beetle Package 2, manual transmission, moonroof, heated seats — the works.  This car is a room with a view.  Surrounded by glass, moonroof overhead, no appreciable blind spots, you can really see where you are going.  The Beetle is extremely nimble as it skips around other cars on the highway and the clutch and transmission are smooth as glass.  This would be a perfect car on which to teach a novice how to drive standard shift.

The 2006 Beetle is full of surprises.  It’s a delightful little car that accommodates tall people.  There’s plenty of headroom and a lot of legroom when the front seat is moved back.  Actually, the amount of headroom and the spaciousness of the interior astound me, as the Beetle is a very compact creature observed from the outside.

The interior is practical lux — spare but not cold.  The Bug reflects its German heritage with easy to handle dials for heat, air, and lights highly reminiscent of the Mercedes SLK when it first arrived.  Turn signals and wipers are on paired stalks on the steering column, and the coup de grâce is the heated seats with dial up dash controls.  The leather interior is refined but understated, and the entire effect is clean and crisp like the Mini Cooper, but warmer and more inviting than its rival.  The Mini, however, has a much roomier rear seat compartment, and anyone prone to claustrophobia should never climb into the rear of the Bug.  It’s a very tight fit.

There isn’t a lot of trunk space in this VW, but with folding rear seats, it will accommodate golf clubs or big luggage.  The Monsoon radio/CD player is easy to handle, too.  One thing I found irksome was the fact that the CD skipped to the next track whenever the car encountered a bump while turning.  This glitch never happened when crossing railroad tracks or other bumps as long as I was driving straight forward.

Surprisingly, for the entire week I have been driving the Beetle, an indicator light never once went on.  VWs are known in the remarketing world for being highly sensitive beasts whose airbag and seatbelt lights click on frequently to keep you from getting too comfortable.  There is almost never anything wrong with these features when the alerts activate, but the number and frequency of popup alert lights have earned VWs the nickname “christmas trees” in the remarketing world. 

Other crowd-pleasers of this hardworking car include vanity mirrors on both driver and passenger visors that automatically activate a complementary light when opened.  The driver also has a side visor to block out sun or light.  Gas and trunk releases are at hand on the driver’s door, and the dual window controls are there as well.  Finally, it is economical.  $15 (at $2.28/gallon) filled the empty gas tank to about 70% full, a welcome relief to the budget-conscious.

All in all, a great car with lots of extras for the money.

Attributes

• 2006 VW Beetle Package 2
• cream (officially “harvest moon”) out/black leather in
• 5 cyl/2.5L gas engine
• 5 speed manual transmission
• frontwheel drive
• moonroof
• heated seats
• radio/CD player
• outside temperature indicator
• 8,500 miles

AutoRemarketing reported today stories from sales personnel at Ford dealerships on the extreme measures some customers are taking to buy the maker’s new crossover, Edge.  With all the negative press coming out of Detroit these days, it’s really encouraging to hear that a U.S. manufacturer has managed to produce a product that buyers actually want.

Yesterday, Business Insurance reported that Mississippi’s Attorney General, Jim Hood, urged Congress to repeal the insurance industry’s exemption to the application of the federal antitrust laws.  Apparently, AG Hood testified before the House Financial Services Committee’s Oversight and Investigations Subcommittee and accused insurers of trying to intimidate the state’s justice system.

Well, that wouldn’t exactly be news, as California’s former Insurance Commissioner, and now Lieutenant Governor, John Garamendi, issued press releases about how insurers threatened to pour money into a campaign to defeat his bid for the position of Lt. Governor if he insisted on implementing laws and regulations approved by California’s voters that insurers disliked.

Garamendi issued a May 8, 2006 press release from the DOI’s office declaring:

Let me make it clear, I will not be intimidated – not even by the political clout of a $120 billion industry that is willing to go to any length to get its way. This action by the special interest insurance lobby is pure blackmail and extortion, an attempt to stop me from issuing new regulations that will finally implement the will of the voters as expressed in Prop. 103 in 1988.

Garamendi went so far as to take steps to initiate an investigation into the insurance industry’s attempt to blackmail him.  In his letter to the FBI, the U.S. Attorney General’s Office, and the California Attorney General’s Office, Garamendi stated that insurers had previously voiced their displeasure about the implementation of certain auto insurance pricing regulations in a proper manner.

But things changed dramatically on April 24 [2006]. On that day the insurance industry veered dangerously off track in its efforts, and I firmly believe that its leaders have attempted blackmail and extortion against me.

Naming names, Garamendi’s press release of May 9, 2006 said that, “It has now been reported that State Farm, Farmers, Allstate, Safeco, 21st Century Insurance, and others are financing this campaign.”  Ouch.

John Garamendi also issued the following concern and warning to his correspondents about future actions of the insurance industry.

 While this threat was unsuccessful, I believe it is now my responsibility to stand up to this powerful special interest group and set in stone that they cannot engage in, much less succeed with such tactics. This is a serious threat not only to me, but also to the Insurance Commissioners who follow. They, and all other regulators, must be allowed to protect the consumers of California and carry out the laws of the State and people in an atmosphere free of coercion, blackmail and extortion.

Ouch, indeed.

For anyone interested in seeing the Antitrust Modernization Commission wind down, the AMC is holding (what I expect) will be its last public hearing prior to submitting its report and recommendations to Congress and the President.  Although the AMC website doesn’t yet reflect the newly scheduled meeting and the agenda hasn’t been posted, the Federal Register notifies that the hearing will be held March 14, 2007.  Anyone wishing to attend must schedule in advance by March 13, 2007 for security reasons.

Sometimes I just like to hop around the auto arena to see what my fellow autobloggers are talking about.  And I always find interesting stuff I want to share.

Here’s something fun from cynic Joe Sherlock on how to solve the Chrysler spin-off problem for DCC by offering Chrysler as a time share proposition.  Likewise Buickman, Jim Dollinger, over at General Watch slayed me with the editorial Cannibals and the Secretary.  In a Dilbertian view of relative importance within any organization, the cannibals definitively  know whose flesh will be noticed if it goes missing.  I admit; I sent this to all my friends toiling in the Middle Earth of corporate America.

Carpundit writes a good deal this week on automated law enforcement tactics.  CP wonders whether red light cameras are rigged, and how the Chicago Police Department is now using automated license plate readers. CP also wonders about the Chicago PD publicly asking why thieves are stealing catalytic converters.  What I find interesting is that the Chicago PD has launched an “official” blog Checkerboard Chat.  Maybe this is a widespread trend that I’m not aware of, but it seems to me that a blog is a great way for a police department to allow the public to participate in significant law enforcement issues.  After all, isn’t that part of what makes the Amber Alert so effective — getting the public involved as soon as possible to be on the alert for a missing child and suspect?

The Georgia Collision Industry Association has launched its blog, Collision Solutions. GCIA is welcoming articles and information from industry members, as well as offering the ability to comment on those articles.  The industry association tells us that: ”The purpose of this blog is to educate, inform, and allow like minded individuals in the Collision Industry to post message about issues affecting their businesses.  Please send all articles that you would like posted to gcia at gcia.org.”

Dave Williams at Safe Collision Repairs provides interesting information on customer satisfaction surveys with his post Auto Repair Quality not Usually Reflected in CSI Scores.  Dave’s article talks about the lack of important questions and information being incorporated into the surveys given to customers.  The most important appears to be that no one involved in the customer service indexing process cares about the actual quality of the repair. 

And the Oscar closer comes from John Shortell of BodyShopSolutions for The Wonderful World of Claim Handling Companies.  As only John can write it, at least one insurance company out there is paying $105 for an hour’s worth of work for an outside estimating company to write an estimate chisling the body shop, when insurers insist on paying body shops a prevailing labor rate that is less than half that amount.  Actually, John puts it quite eloquently, “You can’t get half of that from the same insurance company for skilled labor, repairing the vehicle, but they’ll pay some flunkies $105 per hour for clerical work.” (emphasis added.)

John was being circumspect there.  I happen to know that the insurers’ alleged “prevailing competitive price” in the State of Connecticut, the state at issue — for the entire state (Hartford, Greenwich, Stamford, you name it) – is $45 an hour.  That’s the gross profit for an hour’s worth of work from which the skilled technicians and employees must be paid, rent, workers comp., utilities, supplies, accounting fees, license fees, taxes, etc., and, oh yes, insurance.  I doubt you could hire a teenage babysitter in Greenwich, CT for $45 an hour.  And insurers think a body shop should take the responsibility of peoples’ lives in their hands for substantially less than paper-pushers get for an hour’s worth of work?  Get real.

Perhaps even more offensive is the language at the bottom of the appraisal invoice: “The shop estimated damage at $4318.59. We appraised the damage at $3614.19. A savings of $704.40!”

Anyone can appraise the damage for less.  Doing so honestly, legitimately, and without depriving the claimant of a proper and safe repair is the challenge.  Not that this concept seems to worry too many appraisers working on behalf of an insurer, even ones charged with the ethical obligation to handle every claim in an unbiased manner.  Can you imagine if a claimant hired an appraiser whose invoice included this phrase at the bottom:  The insurance company estimated damage at $3614.19.  We appraised the damage at $4318.59.  An increase of $704.40! 

Insurers would lose their minds.

“… February had eaten Harvey Swick alive.  Here he was, buried in the belly of that smothering month, wondering if he would ever find his way out through the cold coils that lay between here and Easter.”  Barker, C. (1992). The Thief of Always.  New York:  HarperCollins.

In the middle of the month, I felt eaten alive by the unrelenting snow that made traveling, even short distances, a dangerous endeavor in a 2001 Jaguar S-Type.

At the risk of having everyone think I am a terrible driver, I found myself driving cautiously down an eight lane highway.  At first, things were fine, the roads were clear at my starting point.  As I worked into my destination, however, things deteriorated rapidly.  Snow began coming down in swirls, the road became increasingly think with accumulated snow, and I felt the unpleasant free-fall effect of the steering wheel when you know your tires have lost any contact with the pavement and the rest of the trip will be an adventure.  After spinning 360 degrees across four lanes of traffic, recovering only to have it slip again, then scudding up against a (thankfully) snow-laden guard rail, and a few additional non-damaging mishaps, I decided that the best course of action was to exit the highway as soon as possible, find a safe place to leave the car, and spend the rest of the afternoon in the nearest bar.

You might wonder why any of this is relevant, other than to point out you might not want to drive with me in a rear-wheel-drive vehicle in a sudden snow storm.  Well, it points up an issue to which I think car makers should give real thought.  Why are they insistently designing rear-wheel-drive cars without the option of all-wheel-drive?

Last year, I wrote about how the all-wheel-drive X-Type Jaguar deposited me safely at work after a blizzard, while other vehicles littered the banks and median of the highway.  The X-Type is a wonderful car to drive, and my only objection to it is that it looks like a Buick rather than a true Jaguar.  On the other hand, the S-Type looks like a genuine Jaguar and is a delight to drive in dry conditions.  Give it any bad weather, however, and you’re in a whole different territory.

Jaguar (well, Ford) doesn’t manufacture the S-Type with AWD.  How silly.  They make the X-Type in AWD, but not the S.  While I understand about concerns for fuel efficiency and weight that are often behind some design considerations, I would be happy if we had the option for more AWD luxury vehicles. 

At a time when we have an entirely new generation of drivers that didn’t grow up driving and haven’t been trained to deal with rear-wheel-drive, the auto makers are returning to rear-wheel-drive in droves.  I haven’t been caught in a snow storm in a rear-wheel drive, automatic, sedan in decades and can tell you that I had some moments when I felt the Jag. slip, thinking, “Now you turn into the spin because that points the drive wheels. . .”  It was like doing Algebra at the most inopportune moment, and I’m still not sure I came up with the right answer for X.  Suffice it to say, it wasn’t the type of surreal, time-suspending thought process I wanted to be having at a moment when I could end up killing myself or someone else.  Luckily, that didn’t happen, but it easily could have.

Attributes:  

• 2001 Jaguar S-Type 3.0
• Navy blue out/beige leather in
• 3.0L, V6 engine
• sport package
• power package
• heated seats
• moonroof
• 32,600 miles

Life is a highway.   Yes, it certainly is, and because of that, the law and cars seem like such a natural fit.  After all, you have rule framework for driving a car on any given highway – just like you have rule framework for being a citizen, living in a given place, and pursuing happiness.  The actual and metaphoric highways mesh.

Satisfaction Surveys are Just Big Lies:

Stephanie West Allen at the idealawg posts an insightful look at consumers’ responses to satisfaction surveys.  Do clients tell the truth when surveyed about satisfaction? The brain knows and it might be telling.   The study West Allen cites to notes that people often fail to tell the truth when responding to satisfaction surveys.  There is an interesting adjunct to West Allen’s post which is the issue that our bodies and brains often know and react to things long before our conscience knows anything. Anyone who has read Malcolm Gladwell’s “Blink” knows that the adaptive unconscious is usually far out in front of our laggard conscious minds when it comes to making determinations on anything.  Therefore, the question that arises about people’s responses to satisfaction surveys is whether they are intentional or unintentional falsehoods.

Which brings me to a very important issue.  Automotive News($) published a recent J.D. Powers survey involving only 5,752 consumers who had been involved in collisions and addressed their satisfaction about the repair experience.  The survey results suggest that people are happier with the collision repair experience when using insurer “direct repair program” shops or when they have received a referral from an insurer.  Part of the rationale given in the story in Automotive News for why consumers feel better about insurer recommended repair shops is that insurers investigate them and insist that they have the latest model equipment and best-trained technicians.  Holy cats, is that a sell job, because it is absolutely untrue.

While insurers put things in these direct repair program documents that say a repairer has to have the right equipment and training, that’s all for show in the event the AG’s office or some other consumer protection group gets hold of them.  The bottom line is the insurers could absolutely care less if you are using chains behind your repair garage to pull vehicles’ unibodies into alignment.  Insurers only care about getting a repair job done as cheaply as possible, and, often, if they can twist the repairer to perform an unsafe, but cheap, repair, they do it.  I would love to tell lawyers how many times I have seen insurance company representatives write an estimate of repair that calls for the “clipping” of the vehicle.  Clipping is the industry slang for “cutting the car in half horizontally, throwing away the damaged half and welding a salvage yard total-loss half onto the consumer’s vehicle, and handing the customer the keys.”  Ta-da!  And guess, what folks?  In the vast majority of states, that practice is not illegal.  Unsafe?  You bet.  Illegal?  No.  And the insurers’ attitudes about practices like these?  “No one says we can’t do it, and if it’s going to save us a buck, we’re going to do it.”  and my personal favorite, “We don’t repair cars, we just pay to have cars repaired.” – even though insurers dictate how vehicles are to be repaired to collision repair shops every day of the week.  If you are a collision repair shop that stands up for the consumer, insurers make your life a living hell.  And, they make the lives of consumers who try to patronize the responsible collision repair facilities hell as well.

You can see, therefore, the complete lack of value of the J.D. Powers survey.  The only reason those customers are satisfied with the insurer’s recommendation is because the insurers tend to leave shops in their “networks” alone and don’t play games with them by browbeating their customers, refusing to pay for necessary repairs, deliberately delaying sending an adjuster to review the damage for two or more weeks, and other lovely games.  And why do they leave the network shops alone?  Because those collision repair shops have signed documents that trade away many rights of the customers (unbeknownst to the customers), agree to use inferior parts, use salvage parts (including salvage airbags), and agree to fully indemnify the auto liability carrier for anything (negligence, intentional acts, diminished value, attorney fees, titling problems — oh yes, some of those clips are “front end” clips.  That means the VIN on your dashboard is a salvage vehicle VIN and no longer matches the registration or title of your car.)  Anyone who takes the insurer’s recommendation for a collision repair shop is asking for trouble.

Along those lines, Eric Turkewitz of the New York Personal Injury Law Blog posts about Anderson Cooper’sstory on Allstate Insurance and its aversion to actually paying claims   No, really?

John Shortell of the BodyShop Solutions blog has an enlightening post called More From Inside Nationwide.  A Manifesto That Threatens Termination for Appraisers Who Fail to Get With The Program about the realities of how insurers treat consumers, collision repair facilities, and their own employees.  Shortell even posts an email from a person identified as Paul J. Connell, Materials Damage Claims Associate Director ratcheting up the pressure on claims personnel and body shops.  Anyone who practices in the personal injury area will find Shortell’s post eye-opening.  As a final thought, PI lawyers, are you aware that many insurers use the cost to repair the vehicle as the basis upon which they offer soft tissue bodily injury claims settlements? So, you can see the additional incentive insurers have to keep repair costs as low as possible. 

Accidents:

In my day, babysitters earned about a dollar an hour.  No one paid social security, worker’s comp., or insurance – but that’s probably changed.  And if it hasn’t, maybe it should.  The Orange County Personal Injury Lawyer blawg recounts a sad tale of a babysitter who hit another car killing someone while picking up his employers’ youngest child from school.  Needless to say, the decedent’s family sued the babysitter but also sued the parents/employers.  Vicarious liability isn’t anything new, but how many times do even lawyer parents, desperate for a night out, stop to think, “what are the potential ramifications of this employment activity?”

David Giacalone has some meaningful information for people involved in accidents who want to handle the matter without the assistance (and cost) of an attorney.    DG must have a great sense of humor as the blawg is titled:  “shlep - the Self-Help Law ExPress”.  He also has an excellent post on how consumers can protect themselves in a used car purchase.  Although, Giacalone’s post contains much useful information for buying vehicles, the gigantic problem with the whole used car world is that there are NO standards dictating how vehicles are permitted to be repaired and NO used motor vehicle standards dictating “lifecycle motor vehicle safety” throughout a vehicle’s lifetime.

 J. Craig Williams from May it Please The Court reminds us that if you ski and get hurt, nurse your wounds and go home.  Assumption of risk is still the word of the day on the slopes, and suing the ski resort just makes you look stupid as well as clumsy.

Just Pull over and Keep Your Mouth Shut:

Carpundit says it like it is, and I just love that.  CP reminds sassy Harvard Law students that, in fact, Big Daddy Brother does have jurisdiction over any punk on the road and it really doesn’t matter if it’s a state road or a local one.  CP’s tip of the day for drivers: “when you see the blue lights flashing, pull safely to the right shoulder and come to a complete stop.  In the words of Chris Rock, If the police have to come and get you, they’re bringing an ass kicking with them.”   Jamie Spencer does a neat job of digging through the law to find out if a client committed a traffic violation by performing a U-turn at a location posted only “No Left Turn”.  I have to admit, trying to piece together state law and local ordinance is often a nightmare, and it makes for some wacky results.  This is an interesting read over at the Austin DWI Lawyer blawg.

Go Green!   The Green Business News brings us news about recent enactment of laws in the U.K. that require vehicle manufacturers to pay for the safe and environmentally appropriate disposal of motor vehicles. Autoblog reports that the President has finally drafted some fuel economy legislation which would allow regulators to demand higher mileage standards from automakers.

Government Officials We Think Have Drive or Have Job Openings

 The AutoProhpet lauds Michigan AG, Mike Cox, for doing what every state should do — ban those stupid (and inaccurate) red-light camaras.  Boy, talk about a total walk around the hearsay rule.

The Antitrust Review points out a bunch of job openings in that easy-to-parse-through land of antitrust law.  In addition to which, the AR tells us that the European Court has upheld a Beer Cartel Fine.  Look, if the U.S. can finally “free the grapes” and let wineries ship directly to consumers, then I think the European consumers should be entitled to “free the hops.”

Revelations (Oh, my goodness, it’s just what I wanted):

GAL of the Greatest American Lawyer has toyed with revealing his (and I do believe it is a “his”, although GAL may be more of a hint than one might imagine!) anonymous self.    There was even a contest, closed yesterday, winners to be announced early this week.  GAL begged not to be outted by those in the know until post-revelation.  OK, I’ll give you all a real heads-up.  It’s me!  Why do you think I’m hosting this blawg review?

Also, anyone interested in what interests gay people in the world of automobiles must visit Gaywheels.com which bills itself as the “gay-friendly automotive resource”.  The Truth About Cars has a fun dish on some woes at ToMoCo (you know, Toyota Motor Co.) involving “memogate“.

Vorsicht bei der Abfahrt  (Danger, Will Robinson, Danger!)

Overlawyered keeps us up-to-date with warning labels the whole family can enjoy, while Jonathan B. Wilson comments on a Georgia Social Networking Bill designed to keep minors safe.

Joe Sherlock of The View From Behind The Windshield warns about property loss damage that can occur to your car just by going through an automated car wash.

Nicole Black of Sui Generis–a New York law blog warns of issues involving ethical issues involving NY’s lawyer advertising rules and their application to a home office. Diane Levin of Death and Taxes Blog talks about her thoughts on Associate Salaries.

Heresy (I prefer to take the bus, thank you very much):

“Blessed are the few of words, for they will be welcome anywhere.”  Lawyers talk too much (just look at this Blawg Review!)  If you don’t think so, marry one.  Imagine if other professions bored spouses and friends with the minutiae of earning their daily bread, e.g. “Then I typed the letter “q”, then a “u” . . .” or “I put the strands of DNA, that I had previously teased from the extracting solution, into a test tube . . .”  Honestly, how does the rest of the world stand us?  But now I have a hero.  His name is Donald A. Van Sullehem.  And courtesy of the (new) legal writer,  Here is his elegant response to a brief, and one which, if I weren’t so much of a coward, I would have written in some of my own cases.

Brief in Opposition to Plaintiff’s Motion for Reinstatement
Plaintiff has got to be kidding.
Respectfully submitted, Simpson & Moran, By Donald A. Van Sullehem, Attorneys for Defendant, Birmingham, Mich.

Basquette talks about why blogging isn’t for everyone in put down the blog and step away from the computer, ma’am… and Charles H. Green emphasizes the power and beauty of silence at the Trust Matters blawg.

By a whisker (as in, “I just missed that guy by a”):

Julian Ku discussed the hang-up concerning the words “annihilation” versus “genocide” in the debate over the mass killings of Armenians during the Ottoman regime in Turkey.  Ken Adams of AdamsDrafting really splits hairs over the use of the words “termination” or “expiration” in contract drafting. 

Warm and out of the wind (if it’s a convertible, the top is up):

The Wired GC takes aim at the Government Accountability Office for being miffed that the DHS counsel wants to review documents before production and be present at employee depositions. Stephen M. Nipper of The Invent Blog gives us the happy news that PayPal is trying to compete with Google’s new “Checkout” program by offering a $15 rebate on goods purchased from participating retailers.  Luckily for us, some of those retailers include purveyors of law books and legal aids.  Where the heck were these companies when I was in law school paying full bore for every book I had to use?   Sox First continues to report that Citigroup has its hands full trying to defend itself against the allegations of the Australian Securities and Investment Commission that it engaged in insider trading and failed to manage conflicts of interest.

Grievances (Why the hell didn’t you fill up before we left?):

J. Daniel Hull of What About Clients?™ flares about whether lawyers are delivering real services to clients in an economy that now seems exclusively about selling services on a global level.  Hull’s comments immediately reminded me of a fascinating discussion my friend Leon Polott of 5iTech and I had when we were the Chair and Vice Chair respectively of the Cleveland Bar Association’s International Law Section.  At the time, Leon and I discussed the client zealous representation and potential ethical issues arising from the ever-present (and in use) bottle of Vodka on the meeting table in a Russian negotiation.  At what point should there be a different code of conduct and professional responsibility for lawyers representing clients internationally?   

S. Alan Childress points out the grandstanding, childish, and jerry-springerish activities that some judges have begun to exhibit in their occupation of the bench. While paid participants in the legal world continue to pay lip-service to concepts of professionalism and collegiality, the migration of the practice of law to the business of law rewards those who can draw the most dollars by their outlandish behavior.

My own grievance, of course, is that issues I care about are once again being upstaged by that minx, Anna Nicole Smith (aka Vicky Lynn Marshall).  It’s bad enough that the U.S. Supreme Court deemed her dispute over her ancient deceased billionaire husband’s estate to be more review-worthy than a genuine issue over the denial of due process and question of the propriety of a state supreme court justice casting the deciding vote overturning a billion dollar consumer judgment against one of his supporters, State Farm.  Now, the week I am hosting blawg review, she dies, leaving questions about the cause of death, the paternity of her new baby, and the quagmire of her former husband’s estate and her own.  As a former probate, trust, and estate trial lawyer the latter is undeniably appealing to me.  Nonetheless, couldn’t ANS/VLM have done this on someone else’s watch?  I think I will have to take this personally.

Tune in Next Week

Blawg Review has information about next week’s host, and instructions how to get your blawg posts reviewed in upcoming issues.
 

Right off the top, I have to say how much I like driving vehicles that have 4-wheel or all-wheel drive.  Why?  I suppose it’s because the weather in Ohio is always unpredictable.  It snows when it’s not supposed to.  It’s 50 degrees in January.  You just never know.  Last year, I fought a 3 inch dump of snow in the first week of May while driving a Corvette Z06.  There I was trying to make it down Route 77 with everyone mincing along at 30 mph; I’m fuming and spluttering, “Don’t you people know this car has to keep up momentum if I’m ever going to get to where I’m going?  I can’t drive 30!”  Then, once off the freeway, I got to take it up a nice, steep grade — slipping, sliding, big fat tires cha-cha-ing their way ’round the snow.  It was NOT a pretty sight.  I redefined the “slippery slope” that day.   Any sane person would think that snow was nigh impossible in Ohio in May, but no.  Our weather Goddess got the idea that her daughter had gone back to the underworld, so she punished us some more.

 But I’m off track.  The 2006 Mercedes C280 is a very nice vehicle.  It’s sleek, most things are right at hand, it’s easy to figure out how to work the CD player.  Even the seat belts are comfortable.  That’s something I’ve noticed in different vehicles lately.  Sometimes the seatbelts imprison you or cut across too high toward the neck area and are just downright uncomfortable.  It is spacious without being huge or ungainly, fits in parking places without too much worry about door dings, and has back seat amenities including an adapter port for kids’ games or co-workers’ cell phone chargers.  No, this Mercedes is very comfortable, and the all-wheel drive action is smooth.  Sometimes, an AWD can chunk when you switch from rear to drive making you think you’ve got a terrible transmission problem.  The C280 does not have this issue.

However, it has two issues that drive me absolutely crazy.  Although the C280 I am driving has a power lumbar support and seat back direction for the driver’s chair, you have to manually adjust the seat closer or farther from the steering wheel, and there is a separate hand wheel for for cranking the seat portion up or down, which is hard to operate and can’t realistically be operated without the driver’s door being open.  The other thing I find completely unforgiveable is the placement of the cruise control.  On the lower left side of the steering column is the turn signal indicator/windwhield wiper stalk.  Immediately above that on the left side of the column is the cruise control stalk.  Although thinner and not as long as the signal indicator, it is almost impossible to activate the turn signal without bumping the cruise control on, and I have yet to put on my turn signal without engaging cruise.  It’s so annoying I want to rip the cruise stalk off of the steering column.  Of course, there is nothing on the right of the steering column at all.  Go figure.

Now, I understand that cars are complicated things with wiring, structural, body design considerations, etc. and I am willing to accept that there may be a perfectly good reason for the placement of the cruise control stalk where it is.  But until DCC explains it to me, I’m going to complain about that darned thing and malign the unnamed idiot who put it there.Š

Attributes:

• Dark blue out/Beige leather in
• Automatic
• Moon roof
• sunshade package
• power windows, doors, partial seats
• heated seats (front and back)
• Radio/CD player
• glove box CD changer
• 18,200 miles
• all-wheel drive 

Don’t we all think it’s important to know who actually benefits from side deals before we give any company our business?  You bet we do.  I don’t think anyone liked hearing that commercial customers were paying substantially too much for insurance because of insurance broker/insurer arrangements that paid enormous commissions for fraudulently placing insurance with certain companies.  It makes us all wonder if we are really getting a good deal on our individual insurance, too.

So, it’s about time some regulatory entity looked at the relationship created between insurers and collision repairers by “direct repair programs” that consumers are vigorously encouraged to patronize.  The Illinois Attorney General’s Office, Department of Consumer Protection is looking at the agreements insurers get repair facilities to sign to become members of the insurers “network” of “preferred” shops.  Insurers push consumers to these network shops for reasons that are good for the insurer, but not necessarily good for the consumer.  To get into these networks, repair shops have to agree to give the insurer discounts, look for “betterment” (i.e. the flip side of diminished value), agree to use aftermarket (non-original equipment manufacture), salvage, or rebuilt parts, and/or agree to indemnify the insurer.  The scary part of the indemnification provisions in many of these agreements is they require shops to indemnify the auto insurer for anything relating to the claim.  That could mean intentional acts, attorney fees, inherent diminished value payments — all things not associated with whether the repair properly fixed the car.  Most importantly, the way insurers market these networks is to tell customers how beneficial it will be to the customer — which may or may not be the case.

Certainly, an insurer will tell you that an adjuster will address the claim right away and you can get the repairs underway immediately.  OK, that’s probably good for both of you.  It saves the insurer money on the rental car expense and helps the customer obtain a prompt repair.  Yet, sometimes the insurer uses this languange and deliberately withholds sending an adjuster to a non-network shop to impress upon customers how difficult it will be if they choose to have their vehicles repaired at these non-”preferred” facilitites.   Nonetheless, insurers also typically say that you get a guaranteed pick-up date and that they will guarantee the repair.  Well, that may sound good, but is it?

A guaranteed pick-up date is good for the insurer because it allows them to minimize rental car expenses and have certainty in the reservation of the claim.  However, the insurer often determines how long it thinks the repair should take, not necessarily how long a proper repair must take.  Customers assume that when they pick up the vehicle it has been repaired correctly and safely — which simply may not be true.  Because the repair shop has to absorb any additional rental car expenses or other fees if they go over the projected ready date, they have every incentive to push the customer’s car out of the door by the pick-up date, ready or not, safely repaired or not.  What if a part is on back order and it will take two weeks to obtain the necessary part?  Again, the incentive for the shop is to find something, anything, that will substitute for that partt rather than be penalized by the insurer for failing to meet the deadline.  Overall, the danger to customers likely outweighs the benefit of an artificial pick-up date.

Then there is the warranty/guarantee the insurer promises.  Virtually all body shops guarantee their work.  After all, just how long would a repair shop stay in business in a free market economy if they didn’t satisfy customers?   (Of course, this has changed completely with insurers selecting repair shops because they don’t necessarily reward for the same things consumers do.)  So, this alleged guarantee is nothing new, other than the fact that the insurer now says that it guarantees the repair.  Well, the insurer typically sends the customer back to the same body shop if there is a problem — which is what the customer would have done if they had selected the repair facility.  So, insurers are piggy-backing on existing repair shop guarantees. The hard part is to get an insurer to truly honor one of these “repair guarantees”, rather than just dumping the problem back in the lap of the customer and the body shop.  Of course, the obvious question is, how well do you think the repair shop that butchered your car in the first place will fix it the second time around?  Or the third? Or fourth?

Illinois AG examining insurer/repairer relationships - Consumer protection statutes are center of the debate - ABRN (Automotive Body Repair News)

Sure seems like it.  While you are away on the crusade, make sure your car doesn’t go out with anyone else.

Biometric Solutions is offering a new technology for keeping your vehicle safe.  It’s a fingerprint identification device that will only allow the vehicle to start if there is a match between the entered fingerprint and one registered for the vehicle. Finally, a way to keep your teenager from nipping out in the Porsche while you are on vacation.

Car Theft Prevention | Immobilizer | Fingerprint Car Security

Once again, on Monday February 12, AutoMuse® is hosting Blawg Review #95, the elite place to be for all things blawgable. Attorneys and Automobiles, Lawyers and Lincolns (after all, February 12 just happens to be that great President’s birthday, as well as my Mom’s and my estates & trusts Professor’s).

For those submissions to the sphere of blawgatoria, feel free to visit Blawg Review’s post submission page.  I’m certainly looking forward to all things court and cars.

Good news for the wretched homeless in Mississippi!  Their “good neighbor” State Farm is opening its wallet and will be paying homeowners’ claims pursuant to a settlement agreement entered into after the first trial made it full policy limits of $223,000 and $2.5 Million in punitive damages poorer.  Yes, from State Farm’s perspective, the homeless in MS are picking the pockets of the insurance giant.  How did the homeless accomplish this task?  By daring to publicize how shamefully State Farm treated them.  I guess they should have gone on living under cardboard boxes rather than rebuilding their homes.

You might ask why SF caved?  Publicity, dear, publicity.  According to the New York Times, “the insurers became tired of being called insensitive and uncaring about the victims of Hurricane Katrina.”  Well, wasn’t that just what insurers were doing?  People who paid premiums to have insurance, and whose mortgage holders certainly insisted they pay those premiums, were being niggled to death about whether (no pun intended) the root cause of the loss was the hurricane, flood, rain, or some other cause.  Newsflash.  These people lost their homes.  They weren’t trying to get completely new carpet for the house because their three-year-old spilled cherry Koolaid in the living room.  They suffered the devastating loss of their homes and belongings and insurers were trying to claim they were only responsible for the last foot of damage.

What makes the State Farm issue particularly compelling is that SF is a mutual insurance company, which means that the policyholders actually own the company like shareholders.  (If I go wrong here, the RiskProf will set me straight.)  This, of course, raises all kinds of questions about whether policyholder/owners could initiate a vote as to whether catastrophic claims should be paid.  It also makes me wonder if there isn’t a really good argument to be made that SF has a fiduciary responsibility to its policyholders as companies do to their shareholders.

The bottom line is that Mississippi homeowners will be getting claims paid by State Farm, which includes, of course, Senator Trent Lott.  I certainly hope State Farm doesn’t think this belated show of good neighborliness will convince Senator L to back down on his introduction of any legislation mandating public disclosure of total loss VINs (to stop title washing) or federal regulation of insurers.  The one good thing about the fact that SF denied Senator Lott’s claim along with all of the other homeowners is that at least we can sleep well knowing that all affected homeowners were sleeping on cots out in the open — the high and the low.