Auto Body Shops Beat The Hartford In Appraisal Battle

A Superior Court jury in Stamford sided with the Auto Body Association of Connecticut in a class-action lawsuit that accused Hartford Fire Insurance Co., part of property casualty giant The Hartford Financial Services Group, of unfair trade practices that led to artificially low labor rates in damage appraisals.

"This is just one more step in a long road against The Hartford and other insurance companies that seemingly disregard both regulations and consumers' best interests," said Bob Skrip, the association's president and owner of Skrip's Auto Body Inc. in Prospect.

The jury agreed with the association that The Hartford's damage appraisals included artificially low labor rates because the insurer eliminated the use of independent appraisers, instead relying exclusively on its in-house appraisers so the company could control all aspects, including the cost of labor.

That, the association said, had the effect of "strangling the industry by exerting undue influence on its appraisers."

The Hartford said Tuesday it would appeal the decision. "We are disappointed with the verdict as it relates to labor rates for auto body repair, and we will ask the court to overturn that decision," Thomas Hambrick, a spokesman for the insurer, said.

Hambrick said The Hartford continues to believe that Connecticut law clearly allows insurers to use in-house appraisers. The labor rates that The Hartford pays "are consistent with the market rate in Connecticut," he said.

Attorney General Richard Blumenthal, who has pressed for strengthening laws regulating how insurance companies deal with car repairs, hailed the jury award Tuesday.

"By law, appraisers should be independent -- uninfluenced by insurance companies and their profits," Blumenthal said. "A jury has agreed that the Hartford has placed undue pressure on appraisers, interfered with consumer choice on repairs and deprived consumers of independent assessments."

David Slossberg, an attorney for the association, said it would now request an injunction to force The Hartford to change its practices, and may seek punitive damages.

Slossberg estimated that about 1,000 auto repair shops -- some still in business, some not -- would share in Tuesday's award.

"Everybody is very happy with the award, but the most important thing is that The Hartford changes the way it does business," Slossberg said.

The award did not appear to cover another hot-button issue in the lawsuit: the "steering" of business to The Hartford's "preferred" network of body repair shops.

Association members have long insisted that preferred shops cut corners to save money for insurers and eliminate choice for customers. Insurers say the preferred system means little if any savings for them, but lets them get repairs done more quickly and conveniently.

"The jury appears to have recognized the benefits that The Hartford's direct repair program provides to our customers, and affirmed that the operation of that program complies with Connecticut law," Hambrick said.

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