Features

Repair fraud examined

By Louise Chu The Associated Press
Tuesday October 29, 2002

 

SACRAMENTO — Insurance companies, currently fighting lawsuits that accuse them of defrauding consumers with shoddy auto parts, were challenged by the Senate Insurance Committee Monday to comply with California’s own auto repair fraud investigation. 

The state Bureau of Automotive Repair claims a number of insurance companies, including Allstate Insurance Co., Farmers Group Inc. and State Farm Insurance Cos., have failed to cooperate with its request for documents related to cases in which auto body repair shops have been found to engage in alleged insurance fraud. 

Insurance Commissioner Harry Low reported that more than 80 percent of insurance companies have failed to comply with the requests. Many of those companies, led by State Farm, contend the agency doesn’t have the authority to request those documents. 

“It is hard for me to understand why an insurer would not want to help the state stop insurance fraud,” said Sen. Jackie Speier, D-Daly City, the committee’s chairwoman. 

BAR, which operates under the state Department of Consumer Affairs, registers and regulates about 34,000 California auto repair shops and also licenses smog check, lamp and brake inspection stations.