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Published Friday, November 3, 2000
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Insurance habits irk body shops

Some owners urge halt to `preferred lists'


Owners of some N.C. auto body repair shops are angry over insurance company practices they say are hurting their business, and unhappy with N.C. Insurance Commissioner Jim Long's response to their complaints.

The shop owners want to halt insurance firms' practice of referring policyholders to repair places on their "preferred shop" or "pro shop" lists. It's a practice allowed under N.C. law, though insurance companies must tell customers they aren't required to use suggested shops.

Shop owners such as Tommy Green, owner of Green's Auto Body Repair in Brasstown in Clay County, say they want the law changed. Green said earlier this year he gathered names of 56 other N.C. shop owners on a petition asking state officials to start that process. He's sent letters to U.S. Sen. Jesse Helms, R-N.C., and U.S. Rep. Charles Taylor, R-N.C., on the issue, who have forwarded the letters to Long. "We've had customers steered away from us," said Green, who has run his one-person shop 25 years. "Slowly, over a period of time, you see your business decrease. You begin asking people and they say, `I was told to take it to the pro shop or the preferred shop.'"

While he wants the state law changed, Green also believes the outcome of a 1963 court case that then-U.S. Attorney General Robert Kennedy brought against a group of insurers overrides the state law. The order essentially said insurance companies can't refer customers to a repair shop. A group of shop owners has met with representatives from the U.S. Department of Justice to discuss their complaints, Green said. U.S. Department of Justice officials could not be reached for comment Thursday.

Green has written Long asking him to enforce the federal consent order. But Long, and his office's general counsel, say it's the federal government's job to do that - and, in any case, a 1945 federal act says states, not the U.S. government, can regulate insurance.

Long believes Green is raising the issue in part for political reasons. "That's where all this is coming from," he said. "It's what they call the silly season of politics."

Long's opponent, Republican Mike Causey, said he's been contacted by some shop owners and has championed their cause in several campaign speeches.

"I've said what the HMOs and the insurance companies have done to health care, they're trying to do to collision repair," he said. Causey said if elected, he would "get the insurance companies out of the collision repair business."

Jetty Tuttle, who owns Jetty Tuttle Body Shop in Archdale near High Point, said sometimes insurance companies don't even comply with the existing state law allowing referrals only. Customers, he said, have told him their insurers have said they must get their vehicles repaired by a shop on the preferred-shop list.

State Farm Mutual Automobile Insurance Co., one of the firms whose practices shop owners complained about, doesn't require policyholders to use certain shops, said Mary Beth Cramer, State Farm spokeswoman.

"I would categorically deny that we are forcing their car to be repaired somewhere they don't want to take it," she said. State Farm has a list of shops that meet certain quality and service criteria, she said, but the company doesn't refer customers to these so-called "Service First" shops unless they ask. However, customers who pick a shop on that list won't have to first take their vehicles to a claims adjuster, she said, so service can be faster.

Long said any repair shop that wants to get on an insurer's preferred list can, as long as it meets the insurers' standards.

Tuttle said he's not interested.

"To be on an insurance company's list, you have to sign a contract," he said. "You have to repair a car the way they say. I'm not going to take shortcuts and cost me customers."

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