Steering

For purposes of this document “Steering” is defined as the practice of insurance companies directing First Party Insureds and/or Third Party Claimants to or away from specific repair facilities or providers.

It should first be noted that such a practice, now pervasive throughout the insurance industry, is in direct violation of the 1963 Federal Consent Decree. That Consent Decree resolved a suit brought against the insurance industry by then US Attorney General Robert F. Kennedy. That suit alleged a conspiracy had existed among 235 different insurance companies to artificially suppress insurance claims and defraud consumers. Steering was one of the elements of the alleged conspiracy. The 1963 Consent Decree was a document in which the defendant insurance companies said, in effect “No We Did Not Do That” and “We Promise to Not Do it Anymore.” Click Here to view the 1963 Federal Consent Decree Document.

While the 1963 Federal Consent Decree is still valid law, there appears to be no desire on the part of the current US Attorney General to enforce the terms of the document. The only parties eligible to petition a court for enforcement of the Consent Decree are those who were a party to the original litigation. The defendant insurance companies are not going to request enforcement - and the current US Attorney General shows no signs of wanting it enforced.

The illegality of “Steering” notwithstanding, there are serious problems inherent in the practice. Insurers will “Sell” Consumers on using a particular repair facility or provider by offering to “Guaranty” the repairs to be performed. This means both the insured and repair facility agree to a Method, Scope and Cost of Repairs as defined by the insurer. When the insurer has “Low Cost” as their primary objective, quality - safety, and - post repair resale value suffer.

When a Consumer attempts to have the insurer back up their “Guaranty” of the repairs, they are stone-walled by the insurer and their “Partner” repair facility with assertions that the repairs are “Just Fine.”

Only when the Consumer pays to have the repairs inspected by a qualified repair expert does the insurer agree to back their “Guaranty” by either re-repairing or “Totaling” the insured property. When the insurer tells the Consumer they will “Total” the insured property (typically a vehicle) that statement is itself mis-leading. What actually happens is they either buy (or arrange for the repair shop to buy) the vehicle.

By not processing the claim as a “Total Loss”, insurers can get around any “Title Branding” laws and sell the poorly repaired (sometimes unsafe) vehicles with “Clean Paper” to unsuspecting Consumers.

The Policyholders’ Bill of Rights includes provisions that address the inherent flaws and potential dangers of “Steering.”

Given the illegality of “Steering” - - plus the high potential for fraud - - plus the increased risk to public safety as a consequence of “Steering” practices - - the Insurance Consumer Advocate Network must take a position opposed to the practice of “Steering.”

Steering - - It’s Illegal - - It’s Potentially Fraudulent - - It’s Potentially Dangerous !