The Alliance of American Insurers issued a statement applauding the decision of the Illinois Supreme Court to hear an appeal from the $1.2 billion damage award in a class-action lawsuit against State Farm for sanctioning the use of non-standard auto parts in car repairs.
The case, Avery vs. State Farm, has caused a great deal of controversy, not only for the amount of the award, but also because using non-standard parts considerably lowers the cost of auto repairs.
Kirk Hansen, the AAI’s director of claims stated that “The lower court ruling has had a chilling effect on the use of aftermarket parts throughout the country, denying the cost savings their use provides directly to insurers, and indirectly to consumers. Alliance studies over the past 20 years have repeatedly shown the high cost of car company parts, which on average cost 60 percent more than aftermarket auto parts of equal quality.”
Ann Spragens, AAI Sr. VP and general counsel, added that the case once again clearly demonstrates the need for reform of the class-action court system. “The class in the State Farm case should never have been certified,” she stated, “because it consisted of policyholders from 48 states, each with its own differing laws and regulations pertaining to the use of aftermarket parts.”
The AAI plans to release a new aftermarket parts study within a week.
Topics Auto
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