Body shops accuse insurers of ‘steering’ customers away

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INDIANAPOLIS - Local auto body shops are sharing their stories with FOX59 as more than a dozen Indiana shops sue an auto insurance giant for allegedly "steering" policy holders away if the shops don't comply with the insurer's price ceilings even if it means using cheap parts.

Indiana is one of 35 states included in a federal lawsuit against State Farm.

Carl Thurman of Thurman's Body Shop in Ellettsville complained that he has been pressured by insurers to make repairs how they want them or else risk losing business.

He showed FOX59 a bent part from a car involved in an accident. He said the driver's insurance agent wanted him to repair it, but Thurman refused saying he and other experts felt the part should have been replaced.

"You gotta draw the line and do the right thing," he said. "This is not an isolated case. This happens in every reputable repair shop in every state."

Tony Passwater, executive director of the Indiana Auto Body Association, said he is deeply disturbed by the stories he hears from body shops across the state.

"Everybody is constantly pressured not to use manufacturing procedures, not to repair the vehicle properly, not do this, not do that, use inferior parts, and as a result it's the consumer is the one that's actually harmed," he said.

State Farm is responding to the allegations in the lawsuit. A spokesman for the insurance giant sent this statement to FOX59:

The allegations in the lawsuit are not in line with State Farm’s mission to serve the needs of its customers, and our long, proud history of achievements in advancing vehicle safety.

State Farm is a defendant along with dozens of other insurers in the litigation relating to issues that have been raised by some auto body repair facilities.

Our customers choose where their vehicles are going to be repaired.  We provide information about our Select Service program while at the same time making it clear they can select which shop will do the work.

A vibrant, profitable auto collision repair industry is in the interest of State Farm.  At the same time, we are advocates on behalf of our customers for reasonable repair costs.  We believe repairer profitability and quality auto repairs that are reasonably priced can both be achieved.

We want you to know that State Farm has excellent working relationships with thousands of body shops across the country, and that they are serving millions of our customers who consistently indicate their satisfaction with our handling of their claims.

Here is some evidence of that:

These findings should surprise no one given that State Farm has been the leading insurer of autos in the nation since 1942.

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