Working on behalf of a local auto body shop, Alexander Klein has brought litigation against one of the largest automobile insurance companies in the nation. A central claim in the case is that the insurance company grossly and systemically underpays consumers when they take their cars into a body shop for repairs after an accident. While promising to cover these consumers for all reasonable expenses based upon prevailing competitive prices, the suit alleges that the carrier uses its market power to suppress the market prices that are “prevailing.” In turn, the carrier then uses the suppressed “prevailing” price to refuse coverage beyond those artificial limits—often leaving consumers with bills to body shops that ought to have been paid by the insurance company.
The insurance company filed a motion seeking to dismiss this claim on the basis that, in its view, this conduct would not amount to deceptive business practices under New York’s General Business Law. That argument was firmly rejected on October 18, 2023, with the Supreme Court of the State of New York agreed with Klein’s arguments and allowed the claim to proceed into discovery.
This litigation remains ongoing.