describes insurer's employment of unlicensed body shops as a conspiracy to
deceive its policyholders.
According to a recently filed lawsuit against Progressive Insurance, the
company is referring its policyholders to illegally-operating, unlicensed
body shops in order to save money on repair bills.
In the recently filed class action suit filed against Progressive
Insurance by a group of Ohio repairers, a fifth count has been added to
the list of complaints against the insurer. On August 28, attorneys in the
Ohio case of Blue Ash Auto Body Inc. v. Progressive Insurance filed an
amended complaint adding a charge of civil conspiracy to their list of
allegations against the auto insurer.
According to the court filing, the new complaint describes how
Progressive's conscious use of unlicensed shops in their direct repair
network amounts to a conspiracy with those shops to commit an unfair and
deceptive act. The plaintiffs allege that Progressive participates in the
unlawful scheme when it approves and pays for collision repair work that
the insurer knows will be carried out by body shops operating outside the
law. A practice that continues today, the filing says.
According to the complaint, Progressive does this to save money on the
claim because these illegal shops traditionally have less overhead, and
can charge less, than shops that must incur the additional expense of
complying with the requirements of the state's licensing laws.
Ohio Administrative Code requires Motor Vehicle Collision Repair Operators
to register with the state and provide proof that their business is
complying with certain minimum requirements to protect consumers, their
employees, and the environment. Requirements include items such as proof
of garage keepers insurance, EPA hazardous waste permits, and workers
compensation. A non-licensed shop could operate without any of these basic
According to a brochure distributed to consumers by Progressive, the
company selects the shops in its preferred repairer network "based on
their high quality repairs, efficient scheduling, professionalism, and
commitment to customer satisfaction." On their Web site, Progressive
states that the network shops are chosen "based on factors including the
quality of repairs."
In the amended complaint filed with the court, the original four
allegations remain largely unchanged. They are: Deceptive Trade Practice,
Breach of Contract, Unjust Enrichment, and Tortious Interference.
The 15 page court document describes how independent repairers are injured
by Progressive's actions that include illegally steering consumers to its
network shops, illegal suppression of price, interfering with professional
collision repair judgment, misusing estimating database information
(including the use of a special version of the Mitchell estimating system
created by Mitchell specifically for Progressive's use), and the refusal
to pay for necessary repairs on behalf of consumers.
In an August announcement of the case, plaintiff's attorney Stan Chesley
said, "This case is corporate arrogance at its worst-Progressive just
walks all over these independent shops, and is trying to prevent them from
performing the repairs that any reasonable consumer would expect."
The plaintiffs must now seek approval from the court to have their case
heard as a class action.
19 Dec 2007
Consumer Survey of Progressive Claims Finds Faster and Cheaper Not Better