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Top Insurers Beat Claims They Drove Down Auto Repair Rates

Dec. 20, 2019, 9:02 PM

State Farm, Allstate, and five other top insurers don’t have to face revived claims that they conspired to underpay for auto repairs, the Eleventh Circuit ruled Dec. 20, affirming dismissal of a fraud and racketeering lawsuit.

The proposed class action also targeted affiliates of Geico, Progressive, Farmers Insurance, Liberty Mutual, and Nationwide. It accused the insurers of driving down the “prevailing” cost of repairs—which determines reimbursement rates—by calculating it based on the reduced rates they negotiated with auto body shops to which they refer business.

By refusing to pay more than that “artificial” prevailing rate, the insurers ...