State Farm Insurance Car Accident Claim

State Farm Insurance Car Accident Claim – State Farm last month told the Kansas Department of Insurance that it directs third-party claimants to get estimates from Select Service repairers, but claimants “are under no obligation to use that repairer.”

Illinois attorneys on Wednesday also reported hearing third-party claimants seeking estimates on State Farm’s network of direct repair programs.

State Farm Insurance Car Accident Claim

“It was also raised in the Chicago area,” said attorney Patrick McGuire, whose practice includes collision repairers. (Note: Nothing in this article is intended as legal advice. Consult with qualified counsel in your country.)

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Beyond the obvious steering concerns, these incidents seem to impose obligations on non-contractual third-party claimants. Unlike first-party motorists, who have a contractual relationship with the insurance company, third-parties usually do not sell any rights.

Unfair demands on third-party claimants to suffer the inconvenience of unwanted in-store estimates are bad enough. But the initiative could be greatly expanded if insurance company representatives or third-party claimants mistakenly believe that repairs should be made at DRP facilities. This would certainly violate store choice laws across the country.

“When discussing the claimant’s desire to secure vehicle repairs, we offer the Select Service Program as an initial option if we have a Select Service repairer in a geographic location that acknowledges,” State Farm auto ILR manager Jeff Avery wrote to the Kansas Department of Insurance on April 15 in response to the complaint. general. “We go directly to this repairer to secure an initial estimate for the repair. Once we have this estimate, we issue a payment. The customer is under no obligation to use the repairer. The customer can use the appropriate claim settlement payment, including deciding if and where the vehicle is repaired. . . .

“Once the customer has dropped off their vehicle at their chosen workshop, we will work directly with that repairer to achieve the agreed repair amount.”

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“As previously noted, there is no law related to your concern about specific repair shops,” Kansas Department of Insurance consumer assistance supervisor Karen Wallace wrote April 24 to Tony Adams, vice president of the Kansas Auto Body Association. Adams has submitted a public inquiry into potential law changes that prompted State Farm’s response.

“From the response, State Farm wants people to use the specialty shop for estimates, but there is no requirement to use the shop for repairs,” Wallace said.

We asked State Farm a few questions about reports from Kansas, Illinois and North Carolina about modified third-party claim behavior:

This includes State Farm’s official policy for third-party claimants, sources of possible interpretation if there are new requirements, state filing requirements to change the treatment of third-party claimants, why State Farm can impose obligations on third parties, and how claims can be made when a third-party claimant also held the first party State Farm policy.

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“Thank you for reaching out,” State Farm senior public affairs specialist Tammi Estes wrote April 28. “We have nothing to share with RDN.”

Adams said he has encountered questions from KABA members about Negara Farm’s third-party behavior and has experienced similar situations at his own store.

Adams said a State Farm representative had insisted Weaver’s longtime customer — a third-party claimant — should take her vehicle to a DRP shop for repairs. Ultimately, Adams’ shop sued a State Farm supervisor, who immediately confirmed that consumers have the right to have their vehicles repaired anywhere, Adams said. Weaver kept the key.

Adams said he chalked it up to a simple mistake on the part of his subordinates, but now wonders if the incident was part of something broader.

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In Illinois, “there is no obligation on third-party plaintiffs,” McGuire said. He was even able to fix the car and have a bill before taking the incident with a first-party claimant, according to McGuire.

Insurance policyholders filing as third-party claimants will not be required to use the terms of the first-party contract, according to McGuire. Consumers can choose whether to address their losses as a first-party or third-party claimant.

But while there are also benefits for the victim to file a first-party claim in a situation of total loss, usually “it’s a rare instance where you’re in a better situation as the first party,” according to McGuire.

A third-party claimant likely has zero obligation to take the vehicle to get an estimate at the location that the insurer chooses, “even if they share the same insurance company,” Eversman said.

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The claimant would be a third-party aggrieved party, and “the insurer has no right to conduct any activity through the third party” unless language in the first-party contract requires the customer to waive the third-party rights as well, he said.

Attorney Erica Eversman of Vehicle Information Services said she was not aware of the Kansas law but doubted the insurance commissioner would allow carriers to make such a request in their policies.

Allowing the insurer to participate in the repair process avoids the need for a third party to sue the policyholder for completion. But that doesn’t mean insurers have the right to control the process, according to Eversman.

“As a general principle,” said Eversman, third parties have no obligation to insure – “period.” It would be “inappropriate” for insurers to attempt such controls, she said.

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State Farm has not yet responded to a follow-up request for comment on the Illinois allegations and operator training for adjusters, Select Service Shops and outsourcing estimates (such as A.I., desk reviewers or independent appraisers) regarding differences in third-party writing. and the first third sheet.

“Some states have laws that prevent insurers from allowing third parties or third parties to travel unreasonable distances or establish other guidelines for vehicle inspections,” APCIA Vice President and claims policy Bob Passmore said in a statement. “However, in some cases, claimants and insurers can work together to find the most efficient and effective way to inspect vehicles, assess damage, and pay claims.”

Insurers can also commit insurance fraud by understating claims, according to Eversman. He suggested that if insurance companies use body shops as agents, repairers may be “responsible for insurance fraud and undervalued claims.”

Eversman pointed out the problem of using a third party with a potential interest in the claim to write an estimate “in the insurance company” with the understanding that the shop can write a further estimate after taking the claim. It’s “the whole game” of a DRP repairer to write an estimate, he noted.

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It was a “tremendous conflict of interest” to hire a body shop to outsource claims, when the “clear purpose” was for the DRP shop to handle repairs, he argued.

Eversman said it would be one thing if the DRP shop did “an overall good initial repair analysis without destructive activity” but made it very clear in the estimation that it was done without disassembly necessary to correctly determine the amount of the claim. It should be clear – “in writing, in bold” – that this is “the most accurate estimate made” without disassembly.

“That would be a different story,” Eversman said. However, it may not be possible to eliminate the store or eliminate the problem of conflict of interest, he said.

We proposed that if the assessment shop that is required to be insured begins to remove components, the scenario will be a repair and the risk of violating the shop’s choice law, and Eversman agrees.

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We asked the Kansas Department of Insurance if it has taken any other action or given State Farm any other direction on the issue. We also asked about the apparent lack of obligation for third parties to claim to get an estimate wherever State Farm wanted.

“While consumers are happy to share their personal information with whomever they wish, we do not comment on specific cases,” the agency’s Lee Modesitt wrote in an April 29 email. The general complaint process is to work with the insurance company. and the insured when we receive a complaint to collect all relevant information from the parties involved and  ensure it is handled in accordance with Kansas statutes and regulations.

Since they could not discuss the specific complaint, we asked about general Kansas law and regulations regarding third party claimants.

In actions for temporary damages to real property, Kansas courts will look to PIK Civ. 4th 171.21, which states,

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“When the damage to real estate is temporary and of such a character that the property can be restored to its original condition, the measure of damage is the reasonable cost of repairs necessary to restore it to its original condition, [plus an amount sufficient to compensate. to

Of the property while repairs are being made with reasonable diligence], but not exceeding the fair and reasonable market value prior to the injury.

This is in line with the purpose of the tort action, namely, to restore the injured party, while avoiding the loss of fortune to the injured party. Determination of mechanical damage in labor cost depreciation factors at the same rate as labor cost.

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