One Maryland-based shop has sued State Farm and Allstate alleging customer steering, while Safelite is being sued for insurance fraud.
Multiple lawsuits involving various segments of the collision industry are working their way through federal courts.
State Farm has filed a motion to dismiss a tortious interference and defamation lawsuit brought by a Tesla-certified collision repair business in Maryland, arguing the lawsuit doesn’t adequately “state a claim [for] which relief can be granted.”
In the lawsuit, Total Recon Auto Center in Rockville, MD, alleges the insurer’s “intentional, malicious campaign” to “disseminate misinformation to its insureds who are actual or potential customers” of the shop violates the Maryland Information Act.
The lawsuit states the shop is one of three Tesla-certified shops in the county, and charges “a specific hourly labor rate---no more or no less---determined by Tesla to be reasonable” in a given market area. That labor rate of $60 is $10 more than “the area’s more typical hourly labor rate.”
The lawsuit says State Farm “resisted but eventually agreed to pay” that labor rate, but “ultimately decided to launch an intentional campaign to harm Total Recon" using misinformation to improperly steer customers away from Total Recon. It cites more than a half dozen examples of customers and potential customers of the shop concerned about having to pay out-of-pocket for costs not covered by the insurer even though “there is no history of Total Recon charging out-of-pocket expenses to State Farm’s customers.”
Total Recon said in June in response to cease and desist letters sent to State Farm, it received a letter from a law firm for the insurer saying the company’s actions are “compliant with Maryland law.” Total Recon argues the letter did not dispute “any of Total Recon’s contentions but instead has brazenly taken the position that [State Farm’s] conduct is not unlawful and that it will continue engaging in this course of conduct.”
For each of three counts in the lawsuit, Total Recon seeks more than $75,000 in punitive and compensatory damages.
The same shop filed a similar lawsuit against Allstate in March. That insurer is similarly seeking to have the lawsuit dismissed for “failure to state claims for which relief can be granted.”
In another lawsuit, a former Safelite Auto Glass employee is suing the company for insurance fraud, alleging Safelite billed insurance for OEM or aftermarket moldings but used neither, instead using less expensive universal moldings rather than vehicle-specific ones.
“Safelite concocted a scheme to get paid insurance rates…regardless of the part selected by its technicians,” states the complaint, filed on behalf of the people of California, alleging two senior employees of the company created computer programming that would do just that.
“Safelite’s computer systems have been programmed to replace the name of the OEM or aftermarket part…while keeping the part-specific number and/or part-specific price of the OEM or aftermarket part intact,” the lawsuit alleges.
The complaint provides three screenshot examples of invoices in which it says such substitutions occurred.
The lawsuit also claims Safelite was charging $30 for cleaning of vehicles using special sanitation wipes during four months early in the pandemic, yet alleges only about 25,000 of the nearly 500,000 wipes those services would have required in California were used.
The former Safelite employee, product development and strategy manager Brian Williams, said he first noticed the differences in 2019, eventually bringing it to the attention of his direct supervisor and others within the company. He said he was the only management person furloughed for four months in March 2020 at the start of the pandemic, and was told when he returned to work that summer his job duties were changing. Feeling nothing was being done about the issue, he resigned the following year.
A Safelite spokesperson said the company does not comment on pending litigation.
John Yoswick