Tuesday, 09 July 2019 22:14

Nationwide Insurance ‘Short-Pay’ Suit Settled in Vermont

Written by Alan J. Keays, VTDigger
Mike Parker, repair shop owner, in a promotional video on Parker’s Classic Auto Works Facebook page. Mike Parker, repair shop owner, in a promotional video on Parker’s Classic Auto Works Facebook page. VTDigger


The state’s highest court has sided with a Vermont auto repair shop in its latest legal challenge to a national insurance company over claims the firm failed to pay enough to cover needed repairs to vehicles that had been in collisions.


The case has been working its way through the state’s legal system for about four years, starting in 2015 when Parker’s Classic Auto Works of Rutland, VT, brought suit against Nationwide Mutual Insurance Co., which is based in Ohio.


Mike Parker, the repair shop’s owner, said he recently got a call from his attorney, Robert McClallen of Rutland, letting him know of the high court’s ruling.


“I was like finally, ‘Hallelujah,’” Parker said.


The suit against Nationwide was brought by Parker’s on behalf of consumers in instances where the insurer refused to pay the full amount of the repairs the shop made to vehicles.


It’s a practice known as “short-pay.”


The Nationwide lawsuit is part of an ongoing campaign by Parker’s Classic Auto Works in recent years involving similar claims against other insurance companies for collision repairs.


According to Parker’s website, the shop has broken away from a “direct repair program,” that the company says “become subject to insurance company demands such as the repair of parts that should be replaced, using after-market parts, or salvaged parts.”


The website added, “In our experience, these practices are done to improve the bottom line of the insurance company and offer no benefit or savings to the consumer. In fact, such actions can adversely affect the safety and value of the vehicle.”


In the Nationwide case, Parker sued for a little more than $40,000 in denied payments. The lawsuit listed more than 70 names of people who sought payment for vehicle repairs between 2009 and 2014.


In those cases, the lawsuit stated, Nationwide failed “to pay the full amount of the repair to the insured.” In each case, Nationwide paid the amount it believed it owed, but not the full amount sought by Parker’s.

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