Auto Repair Shop Owners Decry ‘Steering’

Auto Insurance News

Talk about David versus Goliath. The owners of auto repair shops in this part of New York have cried foul over the covert practices that some large auto insurers are sticking to when policyholders bring in their vehicles for repairs.

Auto Repair Shop Owners Decry ‘Steering’Randy Hassell, the owner of Hassel Bros. Auto Body in Jamaica, Queens, deals regularly with representatives and agents of some of the biggest auto insurance firms in the US. He says that more often than not, auto insurers try to weasel their way out of paying claims made by clients involved in accidents, especially those that need repair.

When Hassell called Geico to report an insurance claim from one of his customers, a representative on the other end of the line asked him well-rehearsed questions before talking to the policy holder. After a brief conversation with the customer, the Geico agent recommended that he bring his car to one of the insurer’s Auto Express Facilities or Direct Repair Shops.

Hassell then confronted the agent on the line and criticized the company for “steering” his customers to other repair shops, a practice that is illegal. The Long Island Press, a local paper in New York, revealed some of the insurance firms’ secret tactics despite top companies’ denial of the illegal practice.

While customers still have the freedom to select auto repair shops of their choice, the Long Island Auto Body Repairmen’s Association, Inc. (LIABRA) and New York State Auto Collision Technicians Association (NYSACT) say that ‘steering’ is the so far the biggest challenge to repair shops across Long Island and the country.

State laws also prohibit insurance companies from requiring customers to choose particular shops. According to Regulation 64 of the New York State Insurance Law, specifically Section 2610, states that, “An insurance company cannot require that repairs be made to a motor vehicle in a particular place or repair shop. You have a right to have your vehicle repaired in the shop of your choice.”

Repair shops that are part of insurer carrier arrangements usually get lower hourly rates than shops independent of such arrangement. Owners like Joe Amodei of Medford-based 112 Auto Body say that he is paid $47 per hour while shops not aligned with large insurers get $60 for an hour’s work.

Working with insurance companies have also earned owners like Amodei the ire of some fellow shop owners.
Amodei says, “There has been some turmoil over the years.” He adds that “A lot [of other body shops] hate me. I get along with some of them, but they have a problem with it.”

“It’s not like I am the only one who does it,” says Amodei. “I have to make a tough decision, and I have to take the good with the bad.”