In response to a consumer complaint, Montana Liberty Mutual’s deputy insurance commissioner stated that settling a claim is not enough and that it is unacceptable to simply label a cited blend study as “unconfirmed” without providing evidence to support it.
Liberty Mutual refused to pay the amount invoiced by the repair shop for blending the vehicle in question on the grounds that the 50% blending period was “successful” and “well established.”
“While we appreciate that Liberty Mutual has made numerous payments on this claim, that does not justify the company’s failure to pay all costs for covered repairs that are reasonable and supported by objective evidence,” Deputy Insurance Commissioner Frank G. Cote wrote in an Aug. 6 letter to Liberty Mutual.
The mixing study in question was conducted in 2022 by the Society of Collision Repair Specialists (SCRS) in coordination with AkzoNobel Vehicle Refinishes, Axalta Coating Systems, BASF Automotive Refinish, PPG Industries and Sherwin-Williams Automotive Finishes. The objective was to investigate the relative difference between the time required to completely repaint an exterior panel and the time required to mix the same panel.
The study concluded that mixing took an average of 31.59% more time than a complete repaint, based on the results of repair jobs compared on 45 different parts using three colors from the five paint and coating companies. The results were in stark contrast to the 50% less time budgeted for in the past in the three costing systems.
“The insurance company refused to properly repair the car,” said Chuck Lipes, senior collision consultant at Capital Collision.
He added that insurance companies generally did the same when it came to mix and material bills.
“Liberty Mutual is notorious for entering repairs and refinishing operations into the repair column that do not incur any material (costs) and then trying to use the calculator in a paint material invoice.”
Capital Collision filed the complaint with the Commissioner of Securities and Insurance Office on behalf of its client, who had to pay the difference out of pocket to pick up her vehicle.
“I was able to show and prove to them that the blending study is actually legitimate and that the fact that they are halving repair times without basis is due to manipulation of our database,” Lipes said. “Montana Code 33-18-224 specifically states that an insurance company cannot unilaterally ignore a repair or cost determined by the database we use.”
In April 2023, MOTOR announced “a change to the methodology for developing estimated labor time for adjacent panel color mixing in the MOTOR Guide to Estimating (GTE) to account for variations in modern vehicle paint.”
In October, MOTOR removed the previous mix percentages in its GTE as a result of its research. This was done in response to industry feedback in the form of a large number of database requests received following the release of the SCRS mix study results. CCC One now offers solutions in line with MOTOR’s revision for adjacent panel color mix as an assessment instead of the previous fixed panel mix calculation.
“If Liberty Mutual wants to claim that it ‘successfully accepts 50 percent blending times’ and ‘that time is well established and their blending study is unconfirmed,’ it cannot simply do so without providing sufficient supporting documentation,” Cote wrote. “Liberty Mutual’s opinions will not be considered credible without current, verified studies and supporting documentation, in this or any other case.”
Cote also cited the new GTE wording and a screenshot from CCC One: “Estimated repair times for paint mixes should be based on the judgment of a cost estimator or assessor who will evaluate the specific vehicle and repair requirements on site.”
“Without an on-site assessment, logic would dictate that Liberty Mutual’s position is based on facts and therefore insufficient to make a correct decision,” the letter said.
“If Liberty Mutual performed an on-site evaluation of (redacted)’s vehicle as required by the GTE estimating system, please provide that information,” Cote said. “If Liberty Mutual did not perform an on-site evaluation of the claimant’s vehicle to determine repair time, please promptly make the payment requested by Capital Collision on behalf of the claimant.”
Liberty Mutual had also claimed: “The paint invoice includes paint for a complete repaint of the mixed panels, which we did not authorize in the quantity requested by the shop.”
“It also contains inflated prices for individual items compared to other suppliers. The material invoice created with EAGLE is not an actual invoice from the shop’s supplier. We have included reasonable amounts for the requested materials.”
Cote responded that these claims were not supported by facts or data from the insurance company.
By comparing Capital Collision’s invoice to a price list from National Coatings and Supply, the department found that the prices of the products listed were “the same, in some cases lower, and in some cases slightly higher.”
“I do not see any ‘excessive pricing’ as you claim,” Cote wrote. “This is a very serious matter when you present something to the insurance department as fact that is not the case.”
The insurance company also refused to cover the cost of re-adjusting the headlights after reinstallation following painting, even though this is a commonly recommended OEM repair procedure and is supported by I-CAR.
Liberty Mutual responded to Cote’s letter by refunding the plaintiff $340.13.
“I think it will be a huge win for all consumers across the country,” Lipes said.
Ashley Kovick, owner of Capital Collision, added, “This is definitely a big win for Montana consumers.”
The shop has submitted at least ten further complaints to the supervisory authority on behalf of its customers, which are currently being investigated.
“We have received similar complaints about various insurers not covering the full cost of auto repairs,” Cote told Repairer Driven News. “When we investigate a complaint, we may find that there are a number of items that are not fully covered – mixed in with these items could be the issue addressed in the paint mix study.”
“Because it is our job to regulate insurers and protect consumers in Montana, we will review these types of complaints to ensure that we are consistent in our response to these types of complaints and that Montana consumers are treated fairly in accordance with their policies and Montana law.”
Liberty Mutual did not respond to questions from RDN by publication deadline.
Pictures
Featured image: A painter participates in the audited and supervised SCRS mixing study at the Global Finishing Solutions (GFS) Center for Excellence in Osseo, Wisconsin in August 2022.
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