The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
Aug. 21--Auto-repair shops across the United States are suing insurance companies, including the nation's largest -- State Farm -- in a series of lawsuits that will be heard in Orlando.
The auto-repair shops -- several of which are in Central Florida -- claim that the insurance companies don't pay enough to adequately repair cars.
"This is a real safety issue," said Ray Gunder of Gunder's Auto Center in Lakeland. "So many shops are forced to do shortcuts with the money that's being paid, and insurance companies end up free of liability. We're just looking for enough money to fix the cars right, in a safe and efficient way."
State Farm provided an emailed response to the allegations:
"The description in this lawsuit is not in line with State Farm's mission to serve the needs of its customers, and our long, proud history of achievements in advancing vehicle safety. We are reviewing the lawsuit and will have more to share soon."
Armies of attorneys are likely to show up for the court hearings during the next year or so, representing 80 insurers and hundreds of auto-repair businesses. Orlando was chosen as the home base for the lawsuits, partly because Gunder's Auto Center in Lakeland was an early pioneer in court challenges to insurance companies.
Gunder is part of a large Florida lawsuit along with 45 other auto-repair shops. Others include Orlando Auto Body; Earl Stewart Toyota of North Palm Beach; Auto & Coach Works, Winter Haven; Auto Body Concepts, Pompano Beach; and American Paint and Body, Titusville. Lawsuits from four other states were also consolidated for the hearings in Orlando.
Gunder said he has seen many cars that were repaired improperly at other shops under insurer-imposed expense limits.
One of those cars was a 2007 Toyota Camry hybrid owned by Joan Dick of Lake Wales, Gunder said. After a collision, Dick said, she had the car repaired first at a shop that is part of State Farm's repair program. She says the car still shook violently on the road. She eventually took it to Gunder. Gunder's inspections indicated a cracked block and bent steering column, among other problems, Dick said in an interview. Eventually the car was declared totaled.
"I had been through hell for months," Dick said.
The Florida lawsuit alleges that insurance companies, led by State Farm, pay repair shops on an arbitrary basis and "artificially suppress the labor rate" at auto-body shops. The suit alleges that State Farm steers business away from repair shops if the shop attempts to raise its rates.
Other insurance companies, such as Allstate and Progressive, follow State Farm's lead, telling auto-body shops they won't pay any more than State Farm pays, according to the lawsuit. The suit also alleges that the insurance companies failed to abide by industry standards for auto-repair time lengths.
State Farm has filed a response to the Florida lawsuit denying that it is liable in any amount. Other companies, such as GEICO, have filed motions to dismiss the lawsuit.
The auto shop's lawsuit claims that State Farm had set the rate for insurance payment at $42 an hour for six years, but it was bumped up to $44. Gunder said 90 percent of his repair jobs are reimbursed by insurance companies at $48 an hour because he has demonstrated that's the safe and appropriate level.
Gunder's attorney on the case, Brent Geohagan of Lakeland, said the court may need to rent a hall for all the attorneys involved.
Federal suits from Mississippi, Tennessee, Utah and Indiana are among those consolidated in Florida under the federal Multidistrict Litigation Panel of judges. Consolidating the cases allows courts to save time and resources by considering certain aspects of the cases as a whole.
Aside from the federal lawsuits targeting the auto-insurance industry, Louisiana Attorney General Buddy Caldwell on Tuesday filed a state civil lawsuit against State Farm outlining similar allegations against State Farm.
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