Montana class action alleges State Farm systematically refuses to pay pre and post scans
A class action filed in Montana alleges State Farm systematically refuses to pay for pre- and post-repair scans in the state when those scans are performed at independent collision repair shops.
State Farm policyholder Lana Curry, a plaintiff in the case, alleges the insurance company undervalued, reduced, or refused to pay claims on her vehicle. This includes refusing to pay for pre- and post-repair scans to verify that the vehicle was safe to drive.
A second plaintiff, Francis Cote, former Montana chief deputy insurance commissioner, alleges that his vehicle was damaged by an at-fault driver insured by State Farm and the insurance company failed or refused to pay the full cost necessary to repair the vehicle to applicable manufacturer repair standards. This included refusal to pay for pre- and post-repair scans to verify that the vehicle was safe to drive, resulting in out-of-pocket expenses or uncompensated repair costs.
The court complaint, filed in Montana’s First Judicial District Court in Lewis and Clark County, notes that Montana’s Commissioner of Securities and Insurance issued an Advisory Memorandum in August 2024 that prohibits insurers from refusing to pay for pre- and post-repair scans.
The advisory reminds consumers that they have the right to take their vehicle to any auto repair shop or location of their choice. It also advises insurers that they may not engage in any act or practice that intimidates, coerces, or threatens claimants or that provides an incentive or inducement for a claimant to use a particular repair shop or location.
A review of complaints found that some insurance companies were paying for pre- and post-sublet scans if completed at an auto repair shop participating in the insurer’s direct repair program (DRP), the advisory says. It adds the companies are not paying for pre- and post-sublet scans under the same or similar coverage circumstances if the scans are performed at or for non-DRP auto repair shops.
The advisory also says that some insurance companies paid a higher amount for scans to DRP shops than to non-DRP shops.
“Both instances above, these practices constitute illegal incentives or inducements to use DRP auto repair shops (also known as steering) and violate §33-18-224(1)(a)(ii),” the advisory says. “It would also be illegal if an insurer used similar tactics regarding other services, such as calibration. An insurer may not require a customer to use a specific auto repair shop, directly or indirectly, to receive coverage for a repair (a scan in this case) or a higher reimbursement rate.”
The lawsuit alleges that Montana law grants Curry and others similarly situated a reasonable expectation and right to receive coverage they contracted and paid for from State Farm.
It adds that the law also grants Cote a reasonable expectation that his third-party damage claims be handled and paid by State Farm.
The lawsuit seeks a declaratory judgment ordering State Farm to pay Curry and Cote’s damage claims and similar class members. This would include complete compensatory damages and interest.
It also asks for a judgment that State Farm reopen and fully pay all automobile damage claims for necessary pre- and post-repair scans.
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