A Connecticut Superior Court judge ordered The Hartford Insurance Co. to pay $20 million in punitive damages to auto body shops in the state.
The order by Judge Alfred J. Jennings Jr. is in addition to a 2009 $15 million jury verdict awarded to repair shops in an unfair business practices case against the insurer, led by the Auto Body Association of Connecticut.
The lawsuit said the insurer steered customers who needed auto body repairs to its preferred network of shops, which had a contractual relationship with the company and charged labor rates "well below reasonable market value." This forced auto body shops outside the network to charge lower labor rates and allowed the insurer to exert greater control over the repairs, the lawsuit said. The Auto Body Association of Connecticut also said The Hartford pressured independent appraisers to accept limits set by the insurer.
"The punitive damages award is intended not only to punish The Hartford for its unfair trade practices, including what the court cited as The Hartford's intentional efforts to conceal its conduct from regulators and the public, but also to deter all insurance carriers in the market from engaging in the same unlawful conduct," attorney David Slossberg, who represented the auto body shops, said in a press statement. "The court has placed the entire industry on notice that forcing their appraisers to violate the code of ethics by writing estimates at unreasonably low labor rates must stop."
The Hartford spokesperson Thomas Hambrick said, "We're disappointed with the ruling, and we have appealed."
Slossberg said in a press release that the auto body shops expected the insurer to appeal and were "determined to see this through."
He said he hoped to have the case resolved in the next year to 18 months.