A subsidiary of Allstate has agreed to pay for the correction of faulty repair work performed on motor vehicles brought to unregistered body shops in Massachusetts, Attorney General Maura Healey announced on Sept. 24.
The assurance of discontinuance with Encompass Insurance Company, filed in Suffolk Superior Court in Boston, alleges that in multiple instances the insurer did not verify a body shop’s certifications and paid unregistered shops for repairs made to its policyholders’ vehicles.
The announcement said Encompass has agreed to inspect the vehicles that were previously brought to unregistered repair shops and paid for directly. If the inspection determines that the repairs Encompass paid for were faulty, Encompass will pay to have the problems corrected by a registered body shop.
Under Massachusetts law, insurers are prohibited from paying body shops directly for repairs made pursuant to their collision and comprehensive coverages, unless that shop represents that it is registered with the state and complies with Massachusetts laws. The law protects consumers who may not be able to determine whether a repair shop they brought their car to is properly registered and insured.
All body shops doing business in Massachusetts must be registered with the state and comply with training and safety standards. If not, they may be shut down or be subject to penalties by the Division of Standards.
The Attorney General’s Office said it began its investigation following a complaint from a consumer who unsuspectingly brought her damaged car to an unregistered shop that did not make the necessary repairs. Encompass nevertheless paid the unregistered shop $4,500 directly for the repairs that left the customer with a still unsafe vehicle, but did not provide the policyholder any additional funds to take the car to a registered shop to have the necessary repairs completed.
Under the terms of the settlement, Encompass will also agree to train its staff regularly on this issue and maintain a regularly updated list of registered shops. Encompass also agreed make a $25,000 payment to the state. Encompass will send notices to consumers that may be affected and have the right to get their vehicle inspected.
This case was handled by Assistant Attorney General Monica Brookman, the Deputy Division Chief of the Insurance and Financial Services Division, with assistance from Division staff members Michael Beaulieu and Rebecca Dutra.
Source: The Massachusetts Attorney General’s Office
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