Anyone who read the Avery lower court case AND the Appeal case where State Farm lost, then took almost 6 yrs to appeal this case knows the truth. Case opinions clearly showed State Farm employees knew these parts were crap and admitted State Farm Management committed fraud. Specifically that means Edward “trusty” Rust(y) Jr, Vince Trosino and the rest of their so called management team who have been ruining a once great company for the last 8-10 years. Fast forward to the appeal to the Illinois Supreme Court and events leading up to the misleading decision just rendered. Judge Lloyd Karmeier, who won a seat on the court last November, reportedly received almost $400,000 in campaign donations from State Farm or its Officers-and perhaps as much as $1 million more through a political action committee called “Justpac.” Karmeier and his opponent in the heated race spent a combined $7 million or more on the campaign, making it the most expensive judicial seat in the country. The fact is the plaintiffs lawyers in the Avery case were asking the Illinois Supreme Court to require Karmeier to remove himself from deciding the case. Not only was the appelate court opinion in the Avery case written by his opponent in the race, but Karmeier also was not in office and did not participate in the deliberatiions when the case was heard in 2002. It really comes down to this. Ethics and honest business practices are a one way street with State Farm Management. It appears they will do anything they can to avoid fair and honest business dealings. Its’ the consumer who loses again in this case. Why? Because when has State Farm EVER really cut premiums over the long haul. State Farm has some of the highest rates and expenses to go along with them in the industry. Don’t be fooled by the “Spin” this group puts out. The management of this Company is not your “Good Neighbor”
Stick to the point, the Non-OEM parts available today are usually a step up for some automobiles, the statement that they are all inferior is just crap ! Those lower prices paid on such parts allow policyholders to pay a “Lower Premium”.
Get a real Brain that works ! Insurers and Agents would like if the OEM Case was upheld. I would make more money if premiums were higher as a result of using such parts. Insurers would make more money, OEM’s would make more money, but in the end, just passing the buck to the policyholder would hurt the consumer.
Hurting the consumer for any amount of money is just wrong.
Insurance is a pass through business. Just look at the disparity in insurance rates between litigious jurisdictions that allow bad faith claims at the drop of a hat and jurisdictions where juries are loath to give out awards.
Read about what is going on in Las Vegas Nevada between the attorneys and doctors. You bet the consumer pays for all of those shenanigans. Insurance companies are going to make a profit or they will go out of business…just like every other business.
Great News for Carriers, Policyholders and the Nation. Our system has been held at “Legal Gun Point” way to long, hopefully this signals the Long awaited Correction in our Legal System.
After market auto parts are clearly inferior and have been proven to be so by the manufacturers of the oem parts. This will further open the market for insurers to direct their adjsutors to even offer less to repair autos and direct the preferred insurance companies auto body repair shops, linked to their back pocket to cut corners even more…..once again State Farm got away with screwing the public again………..for now.
Can the local of this court have anything to do with the outcome of this case???
The only ones who make money in class action cases is the attornies. Had this been upheld, each participant would have received $0.25 and a certificate for 10% discount on their next State Farm Policy.
The best thing that could happen did.
Now is the time for our industry to begin to think of options for policyholders. For example, offer a preferred physical damage option for use of OEM parts only and discount policyholders who will accept aftermarket. How about the insurance company offering to replace any aftermarket parts used in a covered repair for the life of the car? This would protect the insured from problems with inferior parts.
RocketMan & SammyJo what happened to your common sense? Do you really think it is wise to use inferior parts on your clients autos? Having been an adjuster, company executive & agent, I can tell cheap parts most of the time are not in the policyholder or carriers best interest. Do you want below standard OEM brakes, power steering units, engine and sheet metal on your car? Have you ever seen how bad some of the replacement body parts are?
I think the customer should be given the option, OEM parts, pay your deductible; non OEM parts rebate to the client up to the carriers savings. Or how about a life time guaranttee for replacement failure and rust? You would think carriers would want the cars they insure to be as safe as possible. As usuall in our society today, fast profits are more important than doing the right thing.
The comment that â€Åâ€Ŕ Big insurers win†, clearly shows a high level of misunderstanding on how insurance works. I believe State Farm is a mutual company, owned by the policyholders. Instead of lawyers getting the money, now they can return it in dividends or not increase premiums. Someone pays for these lawsuits and unless Statefarm is printing money, it is the public. I bet if we each got a surcharge on our personal auto policy of $25 to pay for this, prior to it being overturned there would have also been complaints. Those people with the view of â€Åâ€ŔBig Money Insurer wins†attitude would complain when they got their insurance bill.
If Statefarm were to have had to pay this they would raise rates, as would everyone, and frankly I am paying plenty now. Nothing is free. The title should be, big lawyers lose and the little person wins!
Hey CA Joe. I agree that the insured should be given an option. CA requires that the claimant/insured be given a guaranty that non-OEM parts are equal in like, kind and quality. The win is for carriers, insureds, and as one blogger put it, the little guys. Class action abuse needs to be brought to an end, and this is a good case to begin bringing it to an end. Had the award stood, then everyone would pay. In a time when most people are complaining about insurance rates going up, this is a good thing.
Most insurance carriers do offer lifetime warranties on the aftermarket parts that are used….lifetime meaning as long as the insured owns the car. In California, insurers are prohibited from directing clients to their list of body shops….the client gets to choose who gets the business, and the insurance carrier must communicate this in writing as part of the claim notification process.
Has anyone actually read the opinion of the court???? Their overall dissention from the Circuit and Appelate Courts was that the Class should never have been certified in the first place as not all contracts in each state were the same and the laws vary from state to state regarding the use of aftermarket (non-OEM) parts. The circuit court judge approved motions by the plantiffs to bar StateFarm from even mentioning that the contracts and laws differed by state.
This opinion was a Win for the Legal system of this country, a Win for the industry and a Win for consumers.
Just my thoughts… BTW… READ the Courts Opinion!!!!
Of course studies conducted by the auto manufacturers show that their parts, compared to a selection of the worst the after-market has to offer, will “prove” that O.E.M. parts are better. I would faint away if it did otherwise.
What I find really incredible is that you think that just because State Farm is headquartered in IL, the IL Supreme Court threw them a chestnut. If you had any experience at all with past decisions of the IL Supremes, you’d realize just how ludicrous that assertion is.
I understand that State Farm offers lifetime warranties on any non-OEM parts. Also, it would not make sense for any insurance company to put unsafe parts on vehicles that they insure, they would just end up paying more claims down the road.
I also understand that if State Farm’s insured is unhappy with the fit or safety of the part, they can choose to use the OEM part. You can’t lose since you’re getting what you want and your premiums will be lower. And with gas prices skyrocketing, lower premiums sounds good to me.
Sorry Bub, The same companies who make the OEM stuff this year may be out bid next year and their stuff will be “After Market” Next year just becouse of a Lowest Bidder Contract !
Putting a Ford part on my Truck or putting a good after market product on the same vehicle does not down grade anyones position, especially if the insurer offers to fix it free of charge for the lifetime of the vehicle. Call Ford, Chevy or Buick and ask them if they will stand behind their products for the LIFETIME period, you will be surprised at the response, try Laughter !
Please get your Facts in order CA JOE, the After Market Industry is the Same Industry the OEM’s come from, just a different contracts in different years ! This does not make them inferior.
Giving the OEM’s the right to charge excessive amounts, absent free and open competition, really takes the consumer for the real “Ride”.
The consumer is “Better off” for what happened today, plain and simple !
Wow Rocket Man, what a coincidence. State Farm saves millions of dollars in claim costs and the policyholders get a “lifetime” warranty on their replacement parts.
How many people keep a vehicle for a “lifetime”? Oh, I guess the insurors never thought of that when the “guarantee” was offered? Just another “coincidence”, I guess……
Talk to some body shops, who can give you some interesting “insight” into “after market” parts.
Oh yes, can we assume that the insurance carriers will start charging “betterment” for providing “after market” parts, since they carry a “lifetime” guarantee??
Since when are all non-OEM part inferior? Sounds like the so-called “advocates” have successfully trained a bunch of parrotts. Maybe the whiners can call “60 Minutes” to stage a crash with “Non-OEM” parts to set-up a point? Maybe John Edwards can join them along with Ralph Nader and J. Robert Hunter; then they can invite Eliot Spitzer or Dick Blumenthal to sue everyone. Michael Moore, George Soros and MoveOn.Org can finace the whole thing, and we can all continue to hate America as long as we can get our piece by extortion through the courts. Whattya say?
Learned a lot today. Some States and insurance companies are protecting clients with life time guarantees. When I was adjusting auto’s in Philly most of the after market body part were not up to factory standards.
As for AKL, grow up. Is perfect spelling and grammer really your thing. Over the past 40 years I have worked with many poor spellers who could sell well because they took care of the client. Also worked with an ex college English teacher, who could not sell his way out of a paper bag.
For those of you who want to make every post some how about liberals, conseratives or religion, get a life.
You must consider yourself a moderate – in otherwords, the all-seeing oracle from whom we must sit at your feet while you enlighten us with your sage advice. You’re politcal as political can be, but “transcendental” in your mystical belief that everyone is an idiot but you. We’ll smoke a fat one and sit in pied-eyed wonderment at profound genius. By the way, how’s your life?
Many good comments and some expected comments from the “not so informed but I want everything free” category. The last line of the comment by Ersaco said it all. These types of decisions need to continue for the good of everyone except those that start it all in the first place-the attorneys who literally pore over insurance policies trying to find their next loophole or subject that they think will be profitable to pursue in the courts.
As a matter of fact I do consider myself a Moderate; who is sometimes conserative or liberal. And I bet many of my fellow vets are too. Don’t see to many big mouth conseratives or Liberals volunteering to serve in Iraq. Some reporter should do a survey of the number of draft dodgers who support the war in the White house, congress and the Senate. When the **** hits the fan fella, you better thank your lucky stars there are moderates willing to die for this country. While you are smoking a fat one, legal I hope, we moderates believe a man has a right to defend his home, a woman has the right to control her own body, on one religion has a right to impose thier beliefs on everyone else and last but not least many of us respect your opinion. By the way, thanks for asking, I have a great life that I worked for.
First of all I am thrilled that the court overturned the ruling. As fars as parts go, have any of you had to replace a radiator, water pump or compressor for an auto air conditioner out of your own pocket? If you can get a lower price for an after market product, I’m sure most of you would take it. Not every one has a newer vehicle, so there are times you can’t even get original parts.
I feel qualified to comment as my career in insurance claims spans over 30 years. Americans have been brainwashed by car companies that after-market parts are inferior. They aren’t. Second, consumers think that OEM parts are superior. They aren’t. Do people realize that to rebuild a car with OEM parts would cost SIX TIMES THE ORIGINAL PRICE OF THE CAR? Why? Mark-up on OEM parts. When a car is repaired properly, it’s restored to it’s pre-accident condition. People need to let go of psyhchological issue of who manufactured the replacement part. As one other person commented, let them pay a higher premium if they want OEM parts.
Excuse me, Whistelblower, but State Farm also has some of the lowest rates for personal auto. In fact, everywhere that I have lived (MD, FL and TX), not one carrier has ever beat the SF rates that I have gotten.
And, I have experienced rate reductions from SF in the past. My ex-wife used to get refund checks almost every year from SF’s results in Alabama, before the tort climate changed and SF’s experience went pear-shaped.
As one of the other bloggers correctly pointed out, aftermarket parts are used on almost all repairs done outside of warranty or dealerships. If aftermarket parts are so inferior, how do AutoZone, Pep Boys, O’Reilly Auto Parts, etc., and the companies that supply them, stay in business?
Almost no one paying out of their own pocket buys OEM parts unless they are unable to find the aftermarket parts they need. Yet, when the insurer is on the hook, suddenly aftermarket parts are all crap, and only OEM parts are good enough? Gimme a break!
Whistleblower, sounds like you are either a disgruntled ex-SF employee or you simply work for a competitor. Either way, you are obviously mis-informed and clearly have a personal agenda.
Survey after survey reveals the reason why I wouldn’t dare change carriers. My experience has shown they not only have the best trained claims staff in the industry, but their service is second to none. SF is one of only a few carriers I’ve dealt with who truly go the extra mile to protect and defend their policyholders.
Agree with that the only winners in any class action suit are defense counsel who get paid to defend the suit, and plaintiff counsel who make a fortune for pillaging and looting. A recent class action suit resulted in consumers receiving a $5 discount coupon toward a purchase – if that’s the type of settlement reached then plaintyiff counsel should get a coupon for $1.73 tward a simialr purchase for each coupon actually reddemed by the consumers. Thay would cut out this kind of nonsense. I’ve been in the business world (both insurance and retail) for 30 years and in all that time there have maybe been two really legitimate class action lawsuits
As long as everyone agrees with you. Otherwise, we are “idiots”, as opposed to “useful idiots” of the left – my point is made by Big Bob and other shrill Sinclair-ites. Halliburton!
I’m curious if the Floridians I know, who’s hurricane loss claims were under-assessed / under-valued, is representative of a questionable pattern of massive unfair trade and unfair claim settlement practices?
Making a two tier policy available does nothing to address the quality and crashworyness of a part. Nor does the lifetime warranty effect the most important aspects of generic crash parts. Safety! They have a two tier in Massachusetts for 4-5 years. But the generics still have to be equal to or better than OEM, lesser quality parts can’t be substituted.
Those issues have not been addressed to my satisfaction, Remember all generic parts that failed, must have fit.
For those of you that have seen the two virgin Taurus sedans that were disassembled and had replacement OEM parts installed on one vehicle while the other was reassembled with CAPA and other generic parts.
Both vehicles were crashed into a fixed barrier by SF’s defense experts. The CAPA hood separated and in fact failed. The OEM replacement hood bent as expected.
Its my opinion that the quality issue of generic crash parts has yet to be resolved.
The Plaintiff’s lawyers, who brought this case for their own benefit first and those of policyholders a very distant second, have cost us millions (thanks to our snail-like appllate system, but there are no consequnces for them. It is like buying a lotto ticket for them, small upfront fee for a potentially huge payoff. We need to impose real consequences for these kinds of actions, not just a small entry fee.
Kind words for the Most Dominant, Best Run, Best Represented & Best Reserved company in the marketplace. This is cool. Being that good usually attracts jabs and insults from the “also rans” in the industry. It is nice to see people “Call it as it is” and give “credit where credit is due”. Good job…Kudoo’s (to all that share that factual knowledge of State Farms Success Story) and to those Sour Grape Suckers out there: Get your act’s together, and maybe one day, your companies might be the “Next State Farm” and “OWN” the industry !
Folks get real, the management of State Farm are not saints. Like most other companies about 80% of State Farm people are stand up people. The other 20% are the one’s who cheated California policy holders several years back. Sorry your best got caught forging docs to avoid payiny S. California quake claims, and offer dishonest settlements. They got caught, because employees of the company turned them in. Also got caught trying to pay off our commissioner, he resigned because of it. Guess what the defense was? Because of the statue of Limitaion the case should be dismissed. Like most things, its all about the money. The question is, how much does it take to make management, employees, agents and policyholders to lie and cheat?
I have never worked for State Farm, never been insured with State Farm (but many of my friends have been insured with them), but I have worked for the Florida Insurance Commissioner’s Office as an examiner, know a number of State Farm adjusters and have worked for some other large insurance carriers for many years. It is inevitable that with a company as large as State Farm that occasionally the handling of a claim will get messed up – maybe even as often as 1/2 of 1% of the time (but probably far less. But generally speaking, State Farm is a honest, well-run organization with claim handlers that are professional, courtious and well trained. I would not hesitate to be insured by State Farm, should the need arise (I’ve had my auto & personal umbrella insurance with USAA for 30+ years – and no I’ve never worked for USAA)
1. State Farm’s detractors like to overlook a very important fact: No one forces anyone to buy State Farm Insurance. If State Farm was unfair in too many instances (compared to other insurers),it would cease to be the #1 insurer, insuring more than the next top three insurers combined!!!
2. The last major dividend was $1 BILLION returned to State Farm customers. Why would a company rip off its own customers, who own the company and then give them $1 Billion back?
3. As stated previously, the whole issue can be washed away by simply stating in the policy that non-oem can be used or by offering an endorsement in return for an up-front discount.
4. One reason State Farm has the good reputation it does is that it treats non-customer claimants well. So many other companies treat claimants poorly thinking they are saving money when in fact they are just killing their own reputation! I see it over and over again.
5. It’s no victory for the “little guy” when auto manufacturers are given a monopoly.
Justice rips majority’s decision in State Farm class-action ruling
August 22, 2005
BY ERIC HERMAN SUN-TIMES COLUMNIST
The Illinois Supreme Court’s momentous State Farm decision did more than send a chill down the spines of class-action lawyers. It revealed deep fault lines in the state’s highest court.
Last week, the court reversed a $1 billion verdict against State Farm in a class-action lawsuit. The suit alleged the insurer used inferior parts in auto repairs. The majority opinion by Chief Justice Mary Ann McMorrow held, among other things, that the case should not have been certified as a national class-action, and that the Illinois Consumer Fraud Act does not apply outside the state.
Justice Charles Freeman laid into the majority with a blistering partial dissent, joined by Justice Thomas Kilbride. The opinion accuses the majority of “bend[ing] over backwards” to favor State Farm. Freeman suggests the majority did so to dispel Illinois’ reputation — especially in the Downstate Fifth judicial district — of being too friendly to class-action lawsuits.
“In their haste, perhaps, to take a stand on the class action question, my colleagues … show a new hostility to a long-recognized form of litigation,” Freeman wrote.
Lurking in the background is the court’s still-awaited ruling in the Philip Morris light-cigarettes case, a class- action suit that yielded an even bigger verdict: $10.1 billion. The 2003 judgment threatened to bankrupt the tobacco giant. On Thursday, word of the State Farm decision boosted the stock of Philip Morris’ parent company, Altria, as traders took it as a sign the court would toss out the cigarette verdict, too.
“In my view, today’s opinion appears to be my colleagues’ point of entry into the ongoing national debate concerning class-action litigation,” Freeman wrote.
The State Farm case and the Philip Morris case both originated in the Fifth District, the state’s southernmost appellate jurisdiction. The area includes Madison County, which business groups branded a “judicial hell-hole,” partly because of its judiciary’s alleged friendliness to class-action suits.
Class-action suits allow big groups of plaintiffs to band together in one lawsuit if the facts they allege are similar. Verdicts can get very big, creating a huge payday for plaintiffs’ lawyers. But the suits enable people to bring suits who might not otherwise be able to.
Freeman, in his dissent, accused the majority of singling out the Fifth District.
“I feel it is my duty to remind my colleagues that the same standards of review that are at play in the other four districts of the state apply to the Fifth District. I am concerned that today’s opinion sends a message that we, as a court, will employ different standards for cases coming out of the Fifth District on which national attention has been focused,” he wrote.
“My feelings in this regard stem from the fact that in overturning the verdict in its entirety, my colleagues in this case have ignored the standard of review, humiliated plaintiffs’ counsel, and demeaned both the trial court and the appellate court,” Freeman wrote.
McMorrow’s opinion confronts Freeman head-on.
“According to the dissent, this court’s decision to reverse the verdict on plaintiffs’ breach of contract count is the result of bias and extralegal considerations. This is emphatically not true,” McMorrow wrote.
“In deciding plaintiffs’ breach of contract claim we have not acted with bias or favoritism but, instead, have applied the law objectively to the facts of record with no purpose other than to reach a just result. The dissent’s assertions to the contrary are unfounded and inappropriate,” she wrote.
The four-member majority included Justice Lloyd Karmeier, elected last year in a bitterly fought Downstate campaign against Gordon Maag. Karmeier earned the support of many pro-business groups in the election, including groups that supported State Farm’s side in the lawsuit. The lower court opinion overruled last week was partly written by Maag.
Freeman and Kilbride agreed with the majority in overturning the nationwide class-action certification. They also agreed with some of the majority’s conclusions about damages.
But Freeman, the court’s only African-American justice, and Kilbride, a one-time legal aid lawyer from Rock Island, disagreed with the majority on how the State Farm policy should be interpreted. And the two dissenters argued the case should be sent back to the circuit to see if a smaller class of plaintiffs could be settled upon.
During oral arguments in the Philip Morris case last November, Freeman took exception to a point made by former Gov. Jim Thompson, chairman of Winston & Strawn, who represents the cigarette company.
“Your attack seems to be against the whole concept of class actions,” Freeman told Thompson.
To Freeman and perhaps Kilbride, the attack is now coming from the bench.
There’s a good reason they treat their 3rd party clmts so well. When another carrier refuses to assist their own policyholder and advises them to see if SF will pay, SF views that 3rd party clmt as a potential future customer. Can’t tell you how many times I’ve seen 3rd party clmts switch to SF when they see how well they’ve been treated.
And if you think they treat 3rd party clmts well, they bend over backwards to assist SF policyholders. Claim handlers are trained from day one that the customer is everything. Most coverage issues are resolved in favor of their customer as they always investigate claims by asking how can coverage be extended, not denied.
4. One reason State Farm has the good reputation it does is that it treats non-customer claimants well.
________________-
What?, thats an outragous statement! In NY ST Farm is well known for treating non-custerms like animals….You are clearly a StFarm employee and your opinion holds no weight here.
I hate to chime in again as a happy SF insured (but NOT an employee), but I have to agree that, compared to the way other insurers treat third-party claimants, at least what I’ve seen in my 26 years as a claims adjuster, SF wins (with the possible exception of USAA, before the downsizing started).
Besides, as a SF insured, and owner (remember, its a mutual), I WANT my premium dollars spent frugally, and I DON’T WANT my insurer to be known as an easy touch for third-party claims.
An earlier comment suggested that everyone read the case, which I did last week.
Class certification is based upon common questions of law and fact, and also often where damages are too small to allow individuals to bring a case.
In the Avery case, State Farm had policy forms that differed in many states, especially in the language pertaining to its repair obligation. So, right away we do not have “common facts” – the trial court not only certified the class despite the multiple versions of the policy, but BARRED State Farm from introducing evidence regarding these different policy forms.
In addition, the lead Illinois plaintiff testified that he didn’t have damages. One of the plaintiff theories was that the consumer was damaged when an estimate was written that “specified” aftermarket parts – apparently, even it the car was never repaired or repaired with OEM parts.
So, whether or not this was a valid case, whether or not State Farm is good or bad, the underlying fact here is that there was an absolute abuse of the judicial system by the plaintiffs and the trial judge.
I went to college with a lot of New Yorkers. I’d have to think living around them could turn anyone sour. “But professorrrrrrrr, I deserve an A!” They worked on me pretty hard for four years but failed. I’m still sweet as can be…the perfect guy to be a State Farm Agent…not an employee as you guessed.
Its not just OEM part. My car[2011 Chevy Malibu paid $15,000.00 in 6/2013] was parked and was hit in 2/2014 by a women insured by State Farm. The Estimate to repair my car is $1,714.97. . State Farms estimate processor team did not want to pay for paint blending or OEM parts and wanted to cut corners. State Farm sent me a check for$1,220.66. The difference of $484.31. Do I fighting State Farm. Maybe file a lawsuit against the women who hit my car for the difference. She can then fight State Farm. State Farm is not a good neighbor. Any suggestions are welcome. Thank you …
Anyone who read the Avery lower court case AND the Appeal case where State Farm lost, then took almost 6 yrs to appeal this case knows the truth. Case opinions clearly showed State Farm employees knew these parts were crap and admitted State Farm Management committed fraud. Specifically that means Edward “trusty” Rust(y) Jr, Vince Trosino and the rest of their so called management team who have been ruining a once great company for the last 8-10 years. Fast forward to the appeal to the Illinois Supreme Court and events leading up to the misleading decision just rendered. Judge Lloyd Karmeier, who won a seat on the court last November, reportedly received almost $400,000 in campaign donations from State Farm or its Officers-and perhaps as much as $1 million more through a political action committee called “Justpac.” Karmeier and his opponent in the heated race spent a combined $7 million or more on the campaign, making it the most expensive judicial seat in the country. The fact is the plaintiffs lawyers in the Avery case were asking the Illinois Supreme Court to require Karmeier to remove himself from deciding the case. Not only was the appelate court opinion in the Avery case written by his opponent in the race, but Karmeier also was not in office and did not participate in the deliberatiions when the case was heard in 2002. It really comes down to this. Ethics and honest business practices are a one way street with State Farm Management. It appears they will do anything they can to avoid fair and honest business dealings. Its’ the consumer who loses again in this case. Why? Because when has State Farm EVER really cut premiums over the long haul. State Farm has some of the highest rates and expenses to go along with them in the industry. Don’t be fooled by the “Spin” this group puts out. The management of this Company is not your “Good Neighbor”
Gomer,
Stick to the point, the Non-OEM parts available today are usually a step up for some automobiles, the statement that they are all inferior is just crap ! Those lower prices paid on such parts allow policyholders to pay a “Lower Premium”.
Get a real Brain that works ! Insurers and Agents would like if the OEM Case was upheld. I would make more money if premiums were higher as a result of using such parts. Insurers would make more money, OEM’s would make more money, but in the end, just passing the buck to the policyholder would hurt the consumer.
Hurting the consumer for any amount of money is just wrong.
Insurance is a pass through business. Just look at the disparity in insurance rates between litigious jurisdictions that allow bad faith claims at the drop of a hat and jurisdictions where juries are loath to give out awards.
Read about what is going on in Las Vegas Nevada between the attorneys and doctors. You bet the consumer pays for all of those shenanigans. Insurance companies are going to make a profit or they will go out of business…just like every other business.
Hurray…what more can be said!
Great News for Carriers, Policyholders and the Nation. Our system has been held at “Legal Gun Point” way to long, hopefully this signals the Long awaited Correction in our Legal System.
No another win by big business over the little guy.
Hasta la victoria siempre!!!
After market auto parts are clearly inferior and have been proven to be so by the manufacturers of the oem parts. This will further open the market for insurers to direct their adjsutors to even offer less to repair autos and direct the preferred insurance companies auto body repair shops, linked to their back pocket to cut corners even more…..once again State Farm got away with screwing the public again………..for now.
Can the local of this court have anything to do with the outcome of this case???
The only ones who make money in class action cases is the attornies. Had this been upheld, each participant would have received $0.25 and a certificate for 10% discount on their next State Farm Policy.
The best thing that could happen did.
Now is the time for our industry to begin to think of options for policyholders. For example, offer a preferred physical damage option for use of OEM parts only and discount policyholders who will accept aftermarket. How about the insurance company offering to replace any aftermarket parts used in a covered repair for the life of the car? This would protect the insured from problems with inferior parts.
RocketMan & SammyJo what happened to your common sense? Do you really think it is wise to use inferior parts on your clients autos? Having been an adjuster, company executive & agent, I can tell cheap parts most of the time are not in the policyholder or carriers best interest. Do you want below standard OEM brakes, power steering units, engine and sheet metal on your car? Have you ever seen how bad some of the replacement body parts are?
I think the customer should be given the option, OEM parts, pay your deductible; non OEM parts rebate to the client up to the carriers savings. Or how about a life time guaranttee for replacement failure and rust? You would think carriers would want the cars they insure to be as safe as possible. As usuall in our society today, fast profits are more important than doing the right thing.
Can I have some K-Y with that?
The comment that â€Åâ€Ŕ Big insurers win†, clearly shows a high level of misunderstanding on how insurance works. I believe State Farm is a mutual company, owned by the policyholders. Instead of lawyers getting the money, now they can return it in dividends or not increase premiums. Someone pays for these lawsuits and unless Statefarm is printing money, it is the public. I bet if we each got a surcharge on our personal auto policy of $25 to pay for this, prior to it being overturned there would have also been complaints. Those people with the view of â€Åâ€ŔBig Money Insurer wins†attitude would complain when they got their insurance bill.
If Statefarm were to have had to pay this they would raise rates, as would everyone, and frankly I am paying plenty now. Nothing is free. The title should be, big lawyers lose and the little person wins!
Hey folks: remember what Henry Ford
once said….”I will give away the cars
if I can have a monopoly on the parts”
Unless the public wants collision and PD Liab. rates to triple, the ins. industry MUST be able to utilize the option of non-OEM parts.
Hey CA Joe. I agree that the insured should be given an option. CA requires that the claimant/insured be given a guaranty that non-OEM parts are equal in like, kind and quality. The win is for carriers, insureds, and as one blogger put it, the little guys. Class action abuse needs to be brought to an end, and this is a good case to begin bringing it to an end. Had the award stood, then everyone would pay. In a time when most people are complaining about insurance rates going up, this is a good thing.
Most insurance carriers do offer lifetime warranties on the aftermarket parts that are used….lifetime meaning as long as the insured owns the car. In California, insurers are prohibited from directing clients to their list of body shops….the client gets to choose who gets the business, and the insurance carrier must communicate this in writing as part of the claim notification process.
Has anyone actually read the opinion of the court???? Their overall dissention from the Circuit and Appelate Courts was that the Class should never have been certified in the first place as not all contracts in each state were the same and the laws vary from state to state regarding the use of aftermarket (non-OEM) parts. The circuit court judge approved motions by the plantiffs to bar StateFarm from even mentioning that the contracts and laws differed by state.
This opinion was a Win for the Legal system of this country, a Win for the industry and a Win for consumers.
Just my thoughts… BTW… READ the Courts Opinion!!!!
Michael,
Surely, you jest!
Of course studies conducted by the auto manufacturers show that their parts, compared to a selection of the worst the after-market has to offer, will “prove” that O.E.M. parts are better. I would faint away if it did otherwise.
What I find really incredible is that you think that just because State Farm is headquartered in IL, the IL Supreme Court threw them a chestnut. If you had any experience at all with past decisions of the IL Supremes, you’d realize just how ludicrous that assertion is.
I understand that State Farm offers lifetime warranties on any non-OEM parts. Also, it would not make sense for any insurance company to put unsafe parts on vehicles that they insure, they would just end up paying more claims down the road.
I also understand that if State Farm’s insured is unhappy with the fit or safety of the part, they can choose to use the OEM part. You can’t lose since you’re getting what you want and your premiums will be lower. And with gas prices skyrocketing, lower premiums sounds good to me.
Sorry Bub, The same companies who make the OEM stuff this year may be out bid next year and their stuff will be “After Market” Next year just becouse of a Lowest Bidder Contract !
Putting a Ford part on my Truck or putting a good after market product on the same vehicle does not down grade anyones position, especially if the insurer offers to fix it free of charge for the lifetime of the vehicle. Call Ford, Chevy or Buick and ask them if they will stand behind their products for the LIFETIME period, you will be surprised at the response, try Laughter !
Please get your Facts in order CA JOE, the After Market Industry is the Same Industry the OEM’s come from, just a different contracts in different years ! This does not make them inferior.
Giving the OEM’s the right to charge excessive amounts, absent free and open competition, really takes the consumer for the real “Ride”.
The consumer is “Better off” for what happened today, plain and simple !
Wow Rocket Man, what a coincidence. State Farm saves millions of dollars in claim costs and the policyholders get a “lifetime” warranty on their replacement parts.
How many people keep a vehicle for a “lifetime”? Oh, I guess the insurors never thought of that when the “guarantee” was offered? Just another “coincidence”, I guess……
Talk to some body shops, who can give you some interesting “insight” into “after market” parts.
Oh yes, can we assume that the insurance carriers will start charging “betterment” for providing “after market” parts, since they carry a “lifetime” guarantee??
Gomer Pyle—-You obviously have no clue…or know how to spell.
Since when are all non-OEM part inferior? Sounds like the so-called “advocates” have successfully trained a bunch of parrotts. Maybe the whiners can call “60 Minutes” to stage a crash with “Non-OEM” parts to set-up a point? Maybe John Edwards can join them along with Ralph Nader and J. Robert Hunter; then they can invite Eliot Spitzer or Dick Blumenthal to sue everyone. Michael Moore, George Soros and MoveOn.Org can finace the whole thing, and we can all continue to hate America as long as we can get our piece by extortion through the courts. Whattya say?
Gomer, I guess the name says it all.
To Big Insurance you need to talk softly and kindly to these folks. THEY MAY GET HURT FEEELINGS!
Learned a lot today. Some States and insurance companies are protecting clients with life time guarantees. When I was adjusting auto’s in Philly most of the after market body part were not up to factory standards.
As for AKL, grow up. Is perfect spelling and grammer really your thing. Over the past 40 years I have worked with many poor spellers who could sell well because they took care of the client. Also worked with an ex college English teacher, who could not sell his way out of a paper bag.
For those of you who want to make every post some how about liberals, conseratives or religion, get a life.
You must consider yourself a moderate – in otherwords, the all-seeing oracle from whom we must sit at your feet while you enlighten us with your sage advice. You’re politcal as political can be, but “transcendental” in your mystical belief that everyone is an idiot but you. We’ll smoke a fat one and sit in pied-eyed wonderment at profound genius. By the way, how’s your life?
Many good comments and some expected comments from the “not so informed but I want everything free” category. The last line of the comment by Ersaco said it all. These types of decisions need to continue for the good of everyone except those that start it all in the first place-the attorneys who literally pore over insurance policies trying to find their next loophole or subject that they think will be profitable to pursue in the courts.
you are an idiot, who believes anything corporate america and your government tells you. SIEG HEIL YOU ROBOT
THIS HAS NOTHING TO DO ABOUT HATING AMERICA. IT’S ABOUT THE FACIST ADMINISTRATION THAT IS DESTROYING AMERICA.
WE SAW THIS ONCE IN GERMANY?
I THOUGHT THAT IT IS WHAT AMERICA IS ALL ABOUT, THE RIGHT TO EXPRESS ONE’E OPINION.
As a matter of fact I do consider myself a Moderate; who is sometimes conserative or liberal. And I bet many of my fellow vets are too. Don’t see to many big mouth conseratives or Liberals volunteering to serve in Iraq. Some reporter should do a survey of the number of draft dodgers who support the war in the White house, congress and the Senate. When the **** hits the fan fella, you better thank your lucky stars there are moderates willing to die for this country. While you are smoking a fat one, legal I hope, we moderates believe a man has a right to defend his home, a woman has the right to control her own body, on one religion has a right to impose thier beliefs on everyone else and last but not least many of us respect your opinion. By the way, thanks for asking, I have a great life that I worked for.
First of all I am thrilled that the court overturned the ruling. As fars as parts go, have any of you had to replace a radiator, water pump or compressor for an auto air conditioner out of your own pocket? If you can get a lower price for an after market product, I’m sure most of you would take it. Not every one has a newer vehicle, so there are times you can’t even get original parts.
I feel qualified to comment as my career in insurance claims spans over 30 years. Americans have been brainwashed by car companies that after-market parts are inferior. They aren’t. Second, consumers think that OEM parts are superior. They aren’t. Do people realize that to rebuild a car with OEM parts would cost SIX TIMES THE ORIGINAL PRICE OF THE CAR? Why? Mark-up on OEM parts. When a car is repaired properly, it’s restored to it’s pre-accident condition. People need to let go of psyhchological issue of who manufactured the replacement part. As one other person commented, let them pay a higher premium if they want OEM parts.
Excuse me, Whistelblower, but State Farm also has some of the lowest rates for personal auto. In fact, everywhere that I have lived (MD, FL and TX), not one carrier has ever beat the SF rates that I have gotten.
And, I have experienced rate reductions from SF in the past. My ex-wife used to get refund checks almost every year from SF’s results in Alabama, before the tort climate changed and SF’s experience went pear-shaped.
As one of the other bloggers correctly pointed out, aftermarket parts are used on almost all repairs done outside of warranty or dealerships. If aftermarket parts are so inferior, how do AutoZone, Pep Boys, O’Reilly Auto Parts, etc., and the companies that supply them, stay in business?
Almost no one paying out of their own pocket buys OEM parts unless they are unable to find the aftermarket parts they need. Yet, when the insurer is on the hook, suddenly aftermarket parts are all crap, and only OEM parts are good enough? Gimme a break!
Whistleblower, sounds like you are either a disgruntled ex-SF employee or you simply work for a competitor. Either way, you are obviously mis-informed and clearly have a personal agenda.
Survey after survey reveals the reason why I wouldn’t dare change carriers. My experience has shown they not only have the best trained claims staff in the industry, but their service is second to none. SF is one of only a few carriers I’ve dealt with who truly go the extra mile to protect and defend their policyholders.
Agree with that the only winners in any class action suit are defense counsel who get paid to defend the suit, and plaintiff counsel who make a fortune for pillaging and looting. A recent class action suit resulted in consumers receiving a $5 discount coupon toward a purchase – if that’s the type of settlement reached then plaintyiff counsel should get a coupon for $1.73 tward a simialr purchase for each coupon actually reddemed by the consumers. Thay would cut out this kind of nonsense. I’ve been in the business world (both insurance and retail) for 30 years and in all that time there have maybe been two really legitimate class action lawsuits
As long as everyone agrees with you. Otherwise, we are “idiots”, as opposed to “useful idiots” of the left – my point is made by Big Bob and other shrill Sinclair-ites. Halliburton!
I’m curious if the Floridians I know, who’s hurricane loss claims were under-assessed / under-valued, is representative of a questionable pattern of massive unfair trade and unfair claim settlement practices?
rogerpoe@acnet.net
Gee, Roger, you wouldn’t be connected with a SF competitor in the FL homeowners market, would you?
Making a two tier policy available does nothing to address the quality and crashworyness of a part. Nor does the lifetime warranty effect the most important aspects of generic crash parts. Safety! They have a two tier in Massachusetts for 4-5 years. But the generics still have to be equal to or better than OEM, lesser quality parts can’t be substituted.
Those issues have not been addressed to my satisfaction, Remember all generic parts that failed, must have fit.
For those of you that have seen the two virgin Taurus sedans that were disassembled and had replacement OEM parts installed on one vehicle while the other was reassembled with CAPA and other generic parts.
Both vehicles were crashed into a fixed barrier by SF’s defense experts. The CAPA hood separated and in fact failed. The OEM replacement hood bent as expected.
Its my opinion that the quality issue of generic crash parts has yet to be resolved.
Ron
The Plaintiff’s lawyers, who brought this case for their own benefit first and those of policyholders a very distant second, have cost us millions (thanks to our snail-like appllate system, but there are no consequnces for them. It is like buying a lotto ticket for them, small upfront fee for a potentially huge payoff. We need to impose real consequences for these kinds of actions, not just a small entry fee.
Wow,
Kind words for the Most Dominant, Best Run, Best Represented & Best Reserved company in the marketplace. This is cool. Being that good usually attracts jabs and insults from the “also rans” in the industry. It is nice to see people “Call it as it is” and give “credit where credit is due”. Good job…Kudoo’s (to all that share that factual knowledge of State Farms Success Story) and to those Sour Grape Suckers out there: Get your act’s together, and maybe one day, your companies might be the “Next State Farm” and “OWN” the industry !
No Chris, I don’t work with a State Farm competitor, but I do monitor their claim handling activity though.
In the trenches.
Folks get real, the management of State Farm are not saints. Like most other companies about 80% of State Farm people are stand up people. The other 20% are the one’s who cheated California policy holders several years back. Sorry your best got caught forging docs to avoid payiny S. California quake claims, and offer dishonest settlements. They got caught, because employees of the company turned them in. Also got caught trying to pay off our commissioner, he resigned because of it. Guess what the defense was? Because of the statue of Limitaion the case should be dismissed. Like most things, its all about the money. The question is, how much does it take to make management, employees, agents and policyholders to lie and cheat?
I have never worked for State Farm, never been insured with State Farm (but many of my friends have been insured with them), but I have worked for the Florida Insurance Commissioner’s Office as an examiner, know a number of State Farm adjusters and have worked for some other large insurance carriers for many years. It is inevitable that with a company as large as State Farm that occasionally the handling of a claim will get messed up – maybe even as often as 1/2 of 1% of the time (but probably far less. But generally speaking, State Farm is a honest, well-run organization with claim handlers that are professional, courtious and well trained. I would not hesitate to be insured by State Farm, should the need arise (I’ve had my auto & personal umbrella insurance with USAA for 30+ years – and no I’ve never worked for USAA)
A few thoughts…
1. State Farm’s detractors like to overlook a very important fact: No one forces anyone to buy State Farm Insurance. If State Farm was unfair in too many instances (compared to other insurers),it would cease to be the #1 insurer, insuring more than the next top three insurers combined!!!
2. The last major dividend was $1 BILLION returned to State Farm customers. Why would a company rip off its own customers, who own the company and then give them $1 Billion back?
3. As stated previously, the whole issue can be washed away by simply stating in the policy that non-oem can be used or by offering an endorsement in return for an up-front discount.
4. One reason State Farm has the good reputation it does is that it treats non-customer claimants well. So many other companies treat claimants poorly thinking they are saving money when in fact they are just killing their own reputation! I see it over and over again.
5. It’s no victory for the “little guy” when auto manufacturers are given a monopoly.
Justice rips majority’s decision in State Farm class-action ruling
August 22, 2005
BY ERIC HERMAN SUN-TIMES COLUMNIST
The Illinois Supreme Court’s momentous State Farm decision did more than send a chill down the spines of class-action lawyers. It revealed deep fault lines in the state’s highest court.
Last week, the court reversed a $1 billion verdict against State Farm in a class-action lawsuit. The suit alleged the insurer used inferior parts in auto repairs. The majority opinion by Chief Justice Mary Ann McMorrow held, among other things, that the case should not have been certified as a national class-action, and that the Illinois Consumer Fraud Act does not apply outside the state.
Justice Charles Freeman laid into the majority with a blistering partial dissent, joined by Justice Thomas Kilbride. The opinion accuses the majority of “bend[ing] over backwards” to favor State Farm. Freeman suggests the majority did so to dispel Illinois’ reputation — especially in the Downstate Fifth judicial district — of being too friendly to class-action lawsuits.
“In their haste, perhaps, to take a stand on the class action question, my colleagues … show a new hostility to a long-recognized form of litigation,” Freeman wrote.
Lurking in the background is the court’s still-awaited ruling in the Philip Morris light-cigarettes case, a class- action suit that yielded an even bigger verdict: $10.1 billion. The 2003 judgment threatened to bankrupt the tobacco giant. On Thursday, word of the State Farm decision boosted the stock of Philip Morris’ parent company, Altria, as traders took it as a sign the court would toss out the cigarette verdict, too.
“In my view, today’s opinion appears to be my colleagues’ point of entry into the ongoing national debate concerning class-action litigation,” Freeman wrote.
The State Farm case and the Philip Morris case both originated in the Fifth District, the state’s southernmost appellate jurisdiction. The area includes Madison County, which business groups branded a “judicial hell-hole,” partly because of its judiciary’s alleged friendliness to class-action suits.
Class-action suits allow big groups of plaintiffs to band together in one lawsuit if the facts they allege are similar. Verdicts can get very big, creating a huge payday for plaintiffs’ lawyers. But the suits enable people to bring suits who might not otherwise be able to.
Freeman, in his dissent, accused the majority of singling out the Fifth District.
“I feel it is my duty to remind my colleagues that the same standards of review that are at play in the other four districts of the state apply to the Fifth District. I am concerned that today’s opinion sends a message that we, as a court, will employ different standards for cases coming out of the Fifth District on which national attention has been focused,” he wrote.
“My feelings in this regard stem from the fact that in overturning the verdict in its entirety, my colleagues in this case have ignored the standard of review, humiliated plaintiffs’ counsel, and demeaned both the trial court and the appellate court,” Freeman wrote.
McMorrow’s opinion confronts Freeman head-on.
“According to the dissent, this court’s decision to reverse the verdict on plaintiffs’ breach of contract count is the result of bias and extralegal considerations. This is emphatically not true,” McMorrow wrote.
“In deciding plaintiffs’ breach of contract claim we have not acted with bias or favoritism but, instead, have applied the law objectively to the facts of record with no purpose other than to reach a just result. The dissent’s assertions to the contrary are unfounded and inappropriate,” she wrote.
The four-member majority included Justice Lloyd Karmeier, elected last year in a bitterly fought Downstate campaign against Gordon Maag. Karmeier earned the support of many pro-business groups in the election, including groups that supported State Farm’s side in the lawsuit. The lower court opinion overruled last week was partly written by Maag.
Freeman and Kilbride agreed with the majority in overturning the nationwide class-action certification. They also agreed with some of the majority’s conclusions about damages.
But Freeman, the court’s only African-American justice, and Kilbride, a one-time legal aid lawyer from Rock Island, disagreed with the majority on how the State Farm policy should be interpreted. And the two dissenters argued the case should be sent back to the circuit to see if a smaller class of plaintiffs could be settled upon.
During oral arguments in the Philip Morris case last November, Freeman took exception to a point made by former Gov. Jim Thompson, chairman of Winston & Strawn, who represents the cigarette company.
“Your attack seems to be against the whole concept of class actions,” Freeman told Thompson.
To Freeman and perhaps Kilbride, the attack is now coming from the bench.
There’s a good reason they treat their 3rd party clmts so well. When another carrier refuses to assist their own policyholder and advises them to see if SF will pay, SF views that 3rd party clmt as a potential future customer. Can’t tell you how many times I’ve seen 3rd party clmts switch to SF when they see how well they’ve been treated.
And if you think they treat 3rd party clmts well, they bend over backwards to assist SF policyholders. Claim handlers are trained from day one that the customer is everything. Most coverage issues are resolved in favor of their customer as they always investigate claims by asking how can coverage be extended, not denied.
4. One reason State Farm has the good reputation it does is that it treats non-customer claimants well.
________________-
What?, thats an outragous statement! In NY ST Farm is well known for treating non-custerms like animals….You are clearly a StFarm employee and your opinion holds no weight here.
Not So,
Check your Facts before Speaking:
Reference 2004 NY State Complaint Ratings,
Out of the top 10 Writers, State Farm had the Lowest Complaint Ratio.
You clearly have an Agenda here. The facts don’t support your accusations.
Now, may I ask, Who is acting like an Animal ? Look in the Mirror Bub !
PS: Source Data Link, http://www.ins.state.ny.us/acrobat/ark04.pdf
I hate to chime in again as a happy SF insured (but NOT an employee), but I have to agree that, compared to the way other insurers treat third-party claimants, at least what I’ve seen in my 26 years as a claims adjuster, SF wins (with the possible exception of USAA, before the downsizing started).
Besides, as a SF insured, and owner (remember, its a mutual), I WANT my premium dollars spent frugally, and I DON’T WANT my insurer to be known as an easy touch for third-party claims.
An earlier comment suggested that everyone read the case, which I did last week.
Class certification is based upon common questions of law and fact, and also often where damages are too small to allow individuals to bring a case.
In the Avery case, State Farm had policy forms that differed in many states, especially in the language pertaining to its repair obligation. So, right away we do not have “common facts” – the trial court not only certified the class despite the multiple versions of the policy, but BARRED State Farm from introducing evidence regarding these different policy forms.
In addition, the lead Illinois plaintiff testified that he didn’t have damages. One of the plaintiff theories was that the consumer was damaged when an estimate was written that “specified” aftermarket parts – apparently, even it the car was never repaired or repaired with OEM parts.
So, whether or not this was a valid case, whether or not State Farm is good or bad, the underlying fact here is that there was an absolute abuse of the judicial system by the plaintiffs and the trial judge.
I went to college with a lot of New Yorkers. I’d have to think living around them could turn anyone sour. “But professorrrrrrrr, I deserve an A!” They worked on me pretty hard for four years but failed. I’m still sweet as can be…the perfect guy to be a State Farm Agent…not an employee as you guessed.
Busted – I knew you were biased. Thank you for playing, now keep quiet young man.
Hi
To write the letter, it is necessary …
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there polite managers and good admin!!!
Its not just OEM part. My car[2011 Chevy Malibu paid $15,000.00 in 6/2013] was parked and was hit in 2/2014 by a women insured by State Farm. The Estimate to repair my car is $1,714.97. . State Farms estimate processor team did not want to pay for paint blending or OEM parts and wanted to cut corners. State Farm sent me a check for$1,220.66. The difference of $484.31. Do I fighting State Farm. Maybe file a lawsuit against the women who hit my car for the difference. She can then fight State Farm. State Farm is not a good neighbor. Any suggestions are welcome. Thank you …