Blumenthal: Insurance companies may be breaking the law

Ashley Stinnett Sep. 2, 2009, 1:45pm

Richard Blumenthal (D)

HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General Richard Blumenthal on Tuesday sent petitions to U.S Attorney General Eric Holder urging him to investigate insurance companies that steer auto repair customers to body shops of their choosing.

Blumenthal said companies that deny consumers the right to choose their own auto repair shop may be breaking both federal and state laws.

"Practices pressuring consumers to use insurers' preferred repair shops suppress consumer choice and disregard legal duties," he said.

The state along with state auto repair shop owners representing 48 states and the Connecticut Auto Body Association signed the petitions which were forwarded to Holder's office.

The signees are seeking relief from "onerous and arbitrary insurer practices that harm auto repairers and deny consumers the unfettered right to choose the most appropriate repair facility for their car," according to Blumenthal.

According to the 1963 Consent Decree with the U.S. Department of Justice insurers were ordered to stop sponsoring any appraiser, directing, advising or otherwise suggesting that any person or firm do business with any independent or dealer-franchised automotive repair shop, exercising control over the activities of any appraiser and fixing or controlling the prices charged by automotive repair shops for the repair of damage to the vehicle or for labor in connection therewith, by use of a flat rate.

The state is asking the federal government to thoroughly review the 1963 consent order to see if any laws are being broken.

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