Despite the warm and fuzzy advertising campaigns, auto Insurance companies are in the cut-throat business of making profits for shareholders, sometimes at the expense of the safety of their customers. A lawsuit by over 500 auto body shops in 36 states alleges that major car insurance companies pressured body shops to use cheap used, refurbished, and aftermarket parts in order to reduce the cost of claims after car accidents. They allege that these insurance companies steered their customers to "preferred" body shops that were willing to skimp on necessary repairs and use inferior dangerous parts to save the insurance companies money on claims.
I cannot say that these allegations are at all surprising. I often help injured people navigate this minefield after their car is damaged in a car accident. The large insurance companies always push hard to steer business to these "preferred" dealers and it turns out, according to a CNN report, they have a huge financial incentive to do so.
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