Allstate Faces $5,000 Fine for Charges Related
to Steering in Rhode Island Body Shop Case; Decision Defines What
Constitutes "Interfering" with Consumer Choice
December 9, 2009
Allstate Insurance Co. has been fined $5,000 for "interfering
with [a] consumer's free choice of repair facility" in a case
involving a Rhode Island body shop, according to a decision released
by the state's Department of Business Regulation's Insurance Division.
The company is charged with "failure to affirmatively inform
a claimant of his right to select the auto body shop of his choice;"
and interfering with the claimant's choice of shop.
The fine came about as the result of a complaint filed by Providence
Auto Body on behalf of a customer, Dennis D'Ambra, against Allstate
Insurance Co. The company argued that Allstate interfered with D'Ambra's
choice of repair facility following a claim in which he was involved,
and thereby attempted to steer him to a direct-repair facility.
A hearing was held earlier this year in the case, and the decision
was recently released.
In the initial complaint, Providence claimed that D'Ambra initially
contacted the company to have his vehicle repaired, after being
involved in an accident with an Allstate insured who had accepted
liability for the accident, and that Providence then contacted Allstate.
One week after Providence called Allstate, the insurer's CSR, Darlene
Sczygiel, who was handling the claim, contacted D'Ambra and did
not mention her contact with Providence, according to the state's
decision. D'Ambra says that when he advised Sczygiel that he wanted
to take his car to Providence, Sczygiel placed him on told "to
see if they [were] one of [the company's] approved shops."
Though Sczygiel denied using the word "approved," she
told the court that she advised D'Ambra that Providence was not
a direct-repair shop, and then, despite his request to have the
vehicle also appraised at Providence, "indicated to him that
it would be more expedient to have the appraisal conducted at a
drive-in call center," according to the state's decision.
According to the Department of Business Regulation, Allstate claimed
that since the CSR did not specifically suggest another shop, she
did not breech the state's insurance code, which says "Once
the insured or claimant has advised the insurer that an auto body
repair shop has been selected, the insurer may not recommend that
a different auto body repair shop be selected to repair the automobile."
However, the state points out that another provision in its insurance
code prohibits insurers from "interfering with the insured's
or claimant's free choice of a repair facility."
"The question for decision, therefore, is whether Allstate
'interfered' with D'Ambra's free choice of auto body shop,"
writes the officer who heard the case, Elizabeth Kelleher Dwyer,
After reviewing several definitions of the word "interfere,"
Dwyer concluded as follows: "The intent of the legislature
is that insurers do not undertake actions that hamper repair by
the shop of the customer's choice. In other words, without a legitimate
business reason, an insurer may not take actions which make it more
difficult to have the repair done at an auto body shop with whom
the insurer does not have a contractual relationship."
The state rules that, according to the testimonies provided in
the case by both D'Ambra and Sczygiel, she continued to suggest
that he bring the vehicle to an Allstate drive-in claim center for
appraisal, even after he'd advised he wished to take the vehicle
to Providence, and only after rebuffing this suggestion did she
agree to contact his preferred shop.
"The choice of an auto body shop is the customer's,"
writes Dwyer. "This decision should not be interpreted to keep
information from a consumer. This means that discussion of an insurer's
drive-in claim center and/or a direct repair program is not in and
of itself an indication of steering. However, when the customer
indicates that he does not need or want that information, as D'Ambra
did here, the conversation must stop."
In addition, the state department ruled that Allstate also interfered
with D'Ambra's decision to have his vehicle repaired at Providence
by placing him on hold while she checked the direct-repair list,
"when she had plenty of time to make that determination before
making the call," advising D'Ambra the shop was not approved
without explanation, and delaying the appraisal for 15 days after
making contact with D'Ambra.
"These actions taken together constitute 'interfering' with
the claimant's free choice of repair facility
In addition to the $5,000 fine faced by Allstate, the Department
of Business Regulation has mandated that Allstate also "cease
and desist from engaging in any activities" that violate the
state's insurance code.
HERE for full text of decision.
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