The State of Louisiana has sued State Farm Insurance Company for engaging in “unsafe and deceptive” auto repair practices. Although for a while it appeared the litigation would be brought in federal court in Orlando, Louisiana Attorney General Buddy Caldwell has moved the litigation back to Louisiana.
Basically, the suit has alleged State Farm made their customers use knock-off, junkyard parts of a far lesser quality than they are typically obligated to under a standard contract for automobile insurance.
State Farm is the largest auto insurer in Louisiana, writing roughly a third of all policies in the State. The suit also alleges that State Farm steered their insureds to “direct repair facilities,” which are forced through market pressures and contractual obligations to make vehicle repairs as quickly and cheaply as possible—many times leaving the drivers of repaired vehicles in unsafe vehicles.
In a statement last week, Attorney General Caldwell said, “State Farm has violated Louisiana laws by engaging in a pattern of unfair and fraudulent business practices aimed at controlling the auto repair industry and forcing unsafe repairs on vehicles without the knowledge or consent of Louisiana consumers…”
It will be interesting to see how this litigation proceeds. Many of our clients initially reach out to us because they have received an unfair and lowball estimate on their property damage. Hopefully, litigation like this will push insurers to meet their duties and perform all repairs as they are contractually obligated to.