Auto Repair Insurance Antitrust

Insurance Appraisal Plan Antitrust Consent Decree

On August 2, 2019, the U.S. Department of Justice (DOJ) opened a public comment period regarding the potential end of a federal consent decree involving the collision repair industry, with a deadline of September 2nd for public comment that was extended to October 2nd, which eventually resulted in preservation of the consent decree.

  • For the consent decree, click here

  • For the proposal to end the consent decree, click here

  • In August 2020, the U.S. DOJ confirmed that the consent decress would not be dissolved

Summary of Consent Decree

The consent decree was entered in 1963 as a result of cases being prosecuted by the U.S. Department of Justice against three national insurance trade associations involving insurance boycotting through programs that were generally referred to as Independent Appraisal Plans or Automotive Damage Appraisal Plans. These plans involved specific appraisers being selected to act for the insurance association members, and when an auto repair shop did not adhere to a selected appraiser's estimates, that repair shop was boycotted. This was viewed by DOJ as an antitrust conspiracy to boycott, coerce, and intimidate automobile damage appraisers and auto repair shops in order to depress auto repair costs. The consent decree required an end to these types of appraisal and boycott plans. (note: an end to the consent decree does not mean such appraisal and boycott plans will be legal since industry activities are still subject to antitrust laws)

Public Comment Recommendations

For any public comment seeking to maintain the consent decree, it is recommended that comments focus on the main aspects of the consent decree.

  • Has there been compliance with the consent decree—i.e. are there appraisers in relationships with insurance companies where non-compliance with their estimates results in an auto repair shop being boycotted, coerced, or intimidated? (note: examples may be helpful to avoid issues that can arise if a specific entity or individual disagrees with an accusation of illegal behavior); or

  • Even if there has been compliance, what actions by insurance companies are more likely to occur if the consent decree is ended that will result in an antitrust conspiracy to depress auto repair costs?

For any public comment, information that is submitted in connection with this matter cannot be maintained as confidential by the Department of Justice. Written submissions should not include any information that the submitting person or entity seeks to preserve as private or confidential.

By John Huetter for Repairer Driven News - Aug. 13, 2020
Alliance of Automotive Service Providers of Illinois logo