Civil Conspiracy Added to List of Charges Against Progressive Insurance

Amended complaint 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 business necessities.

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.

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