Allstate Insurance Co. Wins Ruling on Texas Law Prohibiting Claim Referrals - aftermarketNews

Allstate Insurance Co. Wins Ruling on Texas Law Prohibiting Claim Referrals

Allstate Insurance Co. has won a temporary injunction that will allow it to continue to refer claimants to Allstate-owned Sterling Autobody Centers, the company said Wednesday. Allstate Insurance Co. has won a temporary injunction that will allow it to continue to refer claimants to Allstate-owned Sterling Autobody Centers, the company said Wednesday.

From Fort Worth Star-Telegram

FORT WORTH, TX — Allstate Insurance Co. has won a temporary injunction that will allow it to continue to refer claimants to Allstate-owned Sterling Autobody Centers, the company said Wednesday.

U.S. District Judge Ed Kinkeade in Dallas ruled in December that a Texas law that went into effect Sept. 1 forbidding insurance companies from referring automotive repair work to insurance company-owned shops violated free speech.

The deadline for appeals of the decision passed Monday without a filing, Allstate said.

Kinkeade’s ruling said that “consumers benefit from more information rather than less.” Allstate spokesman Justin Schmitt said the company informs claims customers about Sterling shops.

Allstate owns 50 Sterling Autobody Centers nationwide. Allstate bought Boston-based Sterling in 2001.

Another provision of the law, which prohibits insurance companies from buying or opening more body shops, was not challenged.

“Allstate and Sterling are pleased with the judge’s decision and are hopeful that this temporary decision will become permanent,” said Cathy Lazaroff, Allstate vice president for property and casualty claims.

Last spring, the Texas Legislature passed a bill forbidding insurance companies from referring customers to shops they own.

Texas is the only state with such a prohibition, Schmitt said.

The Automotive Service Association in Bedford, which represents about 12,000 auto shops and which supported the new law, did not comment on the matter Wednesday.

Copyright 2004 Fort Worth Star-Telegram, Texas. Distributed by Knight Ridder/Tribune Business News. .

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