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Report: Court Ruling Protects Insurers from Some Consumer Claims

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Dec. 30, 2015—On Tuesday, the Ohio Supreme Court ruled that laws protecting consumers from deceptive practices do not apply to insurance company vehicle repair estimates, according to a report by Randy Ludlow of The Columbus Dispatch.

The ruling stems from a case where a couple won $30,600 in damages in a dispute over the use of original manufacturer parts in the repair of their sedan that was appealed by Farmers Insurance of Columbus. The couple sued after their car was repaired and they had agreed to pay the cost difference for original manufacturer parts since Farmers only covered the cheaper parts.

The couple sued using the Ohio Consumer Sales Practices Act, which exposes companies to legal liability for unfair or deceptive acts, according the report. A trial court found they were entitled to damages because Farmers Insurance did not have their signatures on the repair estimate that was calculated with the use of non-original parts.

A 5-2 vote in the Ohio Supreme Court overturned the lower-court rulings that insurers providing repair estimates to their customers are not engaging in “consumer transactions.”

Chief Justice Maureen O’Conner wrote for the majority and said that a 1990 law concerning consumer consent to repair estimates involving non-original parts specifically exempts dealings between insurers and customers from the definition of a “consumer transaction. Damage claims can be filed against repair shops for deceptive acts involving the use of non-original manufacturer parts when they are prohibited and Ohioans can dispute insurers’ repair estimates under other consumer-protection laws,” according to the report.

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