Independent auto body shop owners have long argued that the auto insurers are illegal "steering" consumers to the stores in the network, but the state insurance investigators claimed that they've found only isolated cases, rather than systemic violations of the law state industry.
A 19-month investigation by the Department of Insurance to find "some representatives of the insurance companies involved in practices that could be considered a breach of the insurance law or regulations," officials said in a press release. Such practices involved "improper or inaccurate information provided to consumers, they said.
The state does not find widespread problems or policy at any insurer that has broken the law.
"We have not found the formula misconduct or violations of standard," said Steven Nachman, deputy superintendent for insurance fraud and consumer services. "We see visible single violation."
Officials are now reaching out to these companies to their awareness of potential violations and to give them an opportunity to respond, defense and correct such violations. Will include the repair of a fine or other penalty has not yet been determined, and depends on the nature of the infringement and the companies response officials said. State did not say how many violations found, nor identify him insurers.
"I always want to send the corrected version will see the practice and whether a fine or penalty is warranted will depend on the specific breach" Nachman said. "Regardless of whether the companies is cooperative and agree to change their practices is something that comes to bear."
Local Body Shop owners were satisfied.
"Everyone has the right to choose the shop of their choice," said Rich Leather, owner of Mike's Leather Collision in Blasdell. "When the customer has a choice, it always better."
"It's a long-term investigation, but I am very happy that our state department of insurance is to take an active role in protecting consumers' rights," said Mark mixed, owner Elma collision. "This is something that has been going on for several years and we hope that this investigation will lead him to stop."
Insurers were not surprised. "I do not think there would be no serious systemic problems with the steering wheel and only a few isolated cases," said Ellen Melchionni, president of New York Insurance Association. "The report went exactly as we thought that the industry was in line with the law."
The investigation, which began in May 2007, stemmed from complaints by the New York State Automotive Collision Technicians Association.
Trade group of independent auto body workshops repeatedly argued that the auto insurers were using the "heavy-handed tactics" to drive customers to conflict-specific workshops, refusing their business. Local shops in Western New York even launched an advertising campaign to educate consumers about their rights and persuade them to benefit from independent shops.
"It was clear that consumers are confused. They're in stressful situations and do not know what their rights," said Ed Kizenberger, executive director of the group.
The group said in its press release that "a large number and frequency of complaints and calls were received from consumers and retailers" led it to call for investigation.
"We are grateful to the insurance department took the matter seriously enough to look at New York on behalf of insurance consumers," said Chairman, Mike Orso.
State law clearly gives consumers the right to choose where they want to have vehicles repaired after the collision. It also bars auto insurers targeting business anywhere.
As health insurers with a network of doctors, auto insurers can create a network "participating" or "direct repair" shops that agree to charge less to insurers in exchange for business.
Insurers can talk about their networks and tout the benefits, but they are prohibited recommending, directing or requiring customers to choose the auto shop, or for repair or inspection.
Indeed, with the exception of window glass repair, they can not even refer to propose concrete or shop unless the consumer asks first. In addition, the checks must be carried out by the insurer at a time and place convenient for the customer, not necessarily in the shop. And the insurer must pay the costs of repairing the damage, even if you do not fix it, that it can not force someone to repair the car in order to make money.
"Consumers need to know their rights and know that the Department of Insurance stands ready to protect them," State Insurance Superintendent Eric Dinallo said in a press release.
Breaches occurred when representatives of insurance claims, usually by phone, or recommend a shop without prompting from consumers or customers, he said, the damaged cars had to be checked at a specific location, such as the drive through the company's facility. Or implied, that the inspections will be much faster in the shop than a non-affiliate.
Researchers found companies set target of 45 percent to 60 percent of car repair shops repaired the network.
"Companies have the right to discuss the benefits of their programs, but they are not allowed to be used to process claims or mislead consumers, in particular, making the choice of what is usually stressful time," Dinallo said.
If you have insurance-related complaints, questions or concerns, please contact the Department of Insurance by calling (800) 342-3736 or visit the Web site www.ins.state.ny.us.
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