Monday, February 18, 2013

Crash, you lose.

Collision Collusion: How Insurance Companies Junk Your Car

Drivers who were in a collision often follow the recommendation of their insurance company when it comes to fixing the car. By doing so, they hope for a more accommodating insurance company. They also are likely to end up with a car that has lost a lot of value. In collusion with insurance companies, low-cost collision shops use knock-off or used parts.
“It’s a big problem,” Bob Collins, owner of Wreck Check Assessments told the Boston Globe. “It’s pretty widespread.” Collins says vehicles are often worth an average of about 10 percent less, or more vulnerable to failure, when shops install generic parts.
  • In December, a West Virginia court ordered Liberty Mutual to stop using parts salvaged from junkyards to fix newer cars.
  • California regulators tightened their rules for using knockoff parts last month.
  • Massachusetts repair shops are considering lobbying state regulators to require insurers to pay for new parts for vehicles that are still under warranty, or with less than 36,000 miles: Current regulations require companies to use new, original parts on cars with less than 20,000 miles.
In many states regulations require insurance companies to tell customers what type of parts are being used in repairs. Often, the information is buried in stacks of paperwork.
In Massachusetts, a group representing repair shops, the Alliance of Automotive Service Providers, is considering asking regulators to stop insurers from requiring old or generic parts to fix cars that are still under warranty or that have less than 36,000 miles.

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