Louisiana Attorney General Taking State Farm to Court

lawsuit has been filed against auto insurance giant State Farm by the Attorney General of Louisiana, Buddy Caldwell, who claims the company is forcing consumers to seek unsafe repairs from shops that have signed deals with State Farm.

The insurance company allegedly contracts with certain repair shops, creating their own set of mandates for service times, fees and costs. Consumers are scared into using these repair shops because otherwise State Farm makes them pay the difference.

Caldwell stated that this practice is an attempt by State Farm to cut back on time and costs of repairs, creating a dangerous environment for car owners. He said that the state has discovered that many parts that are being used for repairs often come from the junkyard or are cheap knock offs from other countries.

Junkyard car parts are often old and damaged, and foreign knockoffs can be ill-fitting. Using these car parts is unsafe and can make cars unfit for the road, creating the possibility of further accidents.

“We have not had anything that major happen at our shop, however, an insurance company shouldn’t force any claim holder(s) to go to any specific company. They should have their choice of where to go. By not allowing them to do so, thats taking away their rights, in order to better themselves” said Gary Ingold, Owner of Duraleigh Auto.

The lawsuit argues that State Farm is in violation of the Unfair Trade Practices Act and Monopolies Law set forth by Louisiana because of they are creating their own guidelines for auto repair practices that is based on cutting corners.

State Farm is being singled out because they have the most insurance contracts in the state of Louisiana. A third of all car insurance policies were written by State Farm in 2012.

While their unsafe business practices have been brought to light in this case, Caldwell says State Farm is not the only insurance company at fault and hopes that officials from other states will soon follow suit in holding these companies accountable for their actions. He hopes to set a precedent for others with this lawsuit.

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