Nationwide lawsuit - how good should an auto insurer’s repairs be?

Nationwide lawsuit - how good should an auto insurer’s repairs be? | Insurance Business

Nationwide lawsuit - how good should an auto insurer’s repairs be?

Pennsylvania Supreme Court is reviewing a decision to overturn a lawsuit against Nationwide – and at the same time is assessing how much responsibility the carrier has for the quality of collision repairs.

The Court agreed to reconsider issues raised by plaintiffs who had sued Nationwide for bad faith in a Jeep collision repair. A Common Pleas judge found Nationwide’s behavior constituted intent to deceive, and so awarded the plaintiffs – but that $21 million judgment was overturned by the Supreme Court, which found that the Common Pleas judge “overreached” in his decision.

Last week, the Court said it would hear the plaintiff’s appeal of the June 2018 decision in Berg v. Nationwide.

Nationwide was under an insurance contract to repair collision damage to the motor vehicle in question, instead of paying the insured directly for the fair value of the loss. However, the review of the overturned decision could raise questions about whether Nationwide also had a duty to return the motor vehicle to its insured in a serviceable condition – pursuant to national insurance standards and its duty of good faith and fair dealing.

The insurer had suggested plaintiffs Daniel and Sheryl Berg (who died during the course of the litigation) have their 1996 Jeep Grand Cherokee repaired at one of its direct repair program shops following a crash incident in 1996.

The repair facility suggested by the insurer said that the vehicle was a total loss due to frame damage, but Nationwide disagreed. According to a summary of the case, a claims log item notes: “REPAIRS ARE APPROXIMATELY 50% of ACV NATIONWIDE WILL NEVER RECOVER THE DIFFERENCE IN SALVAGE VALUE.”

Months later, the vehicle was repaired – but it was thought to be unsafe. According to Common Pleas Judge Jeffrey Sprecher in his judgment, Nationwide either did not inspect the vehicle as it should have or did inspect it and did not tell the Bergs.

This week, Nationwide and Mayerson Law – the firm representing the plaintiffs – have each provided statements on the Supreme Court’s decision to hear the case, Repairer Driven News reported.

“Nationwide is aware of the development,” Nationwide corporate communications director Eric Hardgrove said in a statement. “We plan to continue to vigorously defend our adjustment of this claim.”

“We are pleased but not surprised that the Supreme Court of Pennsylvania granted review because this is a case of substantial public importance, involving issues of highway safety and reasonable access to our courts,” remarked Ben Mayerson, an attorney for the plaintiffs.