Buddy Caldwell, an attorney in Louisiana, recently filed a lawsuit against State Farm, claiming the company “created a culture of unsafe business practices in which consumer vehicle repairs are performed with cost-savings as the primary goal rather than safety and reliability.”
The allegations include not repairing components that owners cannot easily see, but that a reputable repair shop would complete. State Farm also is accused of forcing shops to do repairs cheaper and faster instead of according to regulations regarding safety and manufacturer standards.
Keeping a list of preferred repair shops for consumers to use is standard practice among insurers. These shops agree to costs that have been set by the insurance company which limit labor and parts charges. In at least one case, parts for a vehicle insured by State Farm were found using an automated locator created and funded by the insurance company.
The complaint against State Farm states, “The use of the Parts Trader software platform removes the ability of the repair facility to freely select replacement parts that are most appropriate for a specific repair. State Farm adjusters have become increasingly involved in the everyday tasks performed by repair facilities, including but not limited to, locating specific replacement parts and mandating that repair facilities use the specific parts identified by the adjuster even when the repair shop believes that such use is neither safe nor appropriate.”
It goes on to say that the insurance company has been dictating all aspects of repairs, including parts, which repairs to complete and how much time they should require.
Caldwell said recently in a press release, “In some cases, we’ve found that these parts are nothing more than used junk yard parts. In others, we’ve found them to be foreign knock-off parts of questionable quality. Auto repair is not an industry where you can cut corners to save a little money. It could be a matter of life and death.”
A spokesperson for State Farm spoke to the Associated Press recently, stating, “The description in this lawsuit is not in line with State Farm’s mission to serve the needs of its customers, and our long, proud history of achievements in advancing vehicle safety.”