Auto Insurance Co. Fined $71,100

Mechanic checking oilAmeriprise Auto and Home Insurance Company has been found to have been engaging in repair shop “steering,” according to the Colorado Department of Regulatory Agencies. The car insurance company was fined $100 for each of the 711 customers whom it “steered.”

Steering involves auto insurance companies’ pushing policyholders to use certain repair shops — a practice that is banned in many states.

Between September 2006 and January 2010, the policyholders were directed to use auto repair shops that were part of an Ameriprise incentive program. A $100 collision-deductible discount was given for using a preferred shop.

The Colorado auto insurance laws prohibits such practices, saying they ultimately lead to fewer choices for consumers.

“Consumers need to be able to compare repair rates, quality and service,” says Colorado Insurance Commissioner Marcy Morrison. “While the repair shops contracted with Ameriprise may have done good work, the anti-steering law ensures that consumers, not insurance carriers, are in the driver’s seat to decide where they want repairs done.”

Ameriprise, also known as IDS Property Casualty Insurance Company,  wrote $10.39 million worth of coverage in Colorado in 2009 — .38 percent of the total number of policies in place in the state that year.

Colorado isn’t the only state that bars car insurance companies from “steering” consumers.

Recently, the Texas Department of Insurance reminded insurers it is illegal to tell consumers they must use a certain auto repair shop, after the department received reports that some insurers may have been engaging in steering practices.

Consumers should be as aware as possible of the details of their policies and of their rights as policyholders. Since the identification of these types of practices usually stem from consumer complaints, shoppers may want to check their state insurance department’s consumer-complaint index, which provides ratios based on the number of legitimate complaints filed against a company to the number of policies in place. By using this measure, motorists may be able to get a better understanding of the level of customer satisfaction they can expect from a company.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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