News Article

Orlando Business Journal - June 7, 2004 http://orlando.bizjournals.com/orlando/stories/2004/06/07/story6.html

EXCLUSIVE REPORTS
From the June 4, 2004 print edition

AccidentCheck puts the brakes on faulty repairs
Chad Eric Watt
Senior Staff Writer

ORLANDO -- If he were still in the auto repair business, George Forman's holding bays would indicate some brisk business.

The trouble is, the cars at his shop have already been fixed. But Forman says they haven't been fixed properly.
Repair shops deserve the reputation they've got, says Forman. But the reason more than 30 vehicles are parked in his space is bigger than a few body shops.

"The insurance companies have got the power and can dictate what repair work gets done," he says.
About eight years ago, Forman left the repair shop business in Fort Lauderdale and set up AccidentCheck Inc., a business looking for faulty repair work.
Forman moved AccidentCheck to Orlando last October. Since then, he's provided work for more than 50 insurance cases.

"I want to get people out of dangerous cars," says Forman, a second-generation auto repairman.
Disputes between an insured person and an insurer are not unique, says Mark Cornelius, an attorney with Bogin Munns & Munns. But there's a shift in the automobile part of the insurance spectrum.
"More experts are willing to go head-to-head with the insurance companies," says Cornelius.

Tech catches law
After years in the auto repair business, Forman can quickly see whether a vehicle is not "square."
A car or truck with a bent frame is significantly weaker than a never-damaged car and more likely to develop mechanical problems, he says.

To demonstrate what his trained eye can see, Forman uses infrared precision measuring devices like the ones used in building autos.

That provides hard numbers on how much a car is off-kilter.
And it has the potential to be compelling evidence.

"The technology has caught up with the law," says Hans Kennon, an attorney with Morgan, Colling & Gilbert. That firm has used Forman on about 30 cases thus far.

In filing, the attorneys and car owners are claiming breach of contract.
It's only applicable when the car owner takes the insurer's advice on which repair shop to go to.
When an insurer recommends a body shop, the insurer is standing behind that shop's work, says Kennon.
Forman says that the insurance companies are able to use those referrals to pressure body shops to keep repair costs down.

"It's really that HMO mentality," Kennon says.
The 50 matters brought to litigation are a drop in the bucket compared with the claims paid out every year by insurance companies. For instance, Allstate Insurance handles about 15,000 auto repair claims each year in Orlando, says spokesman Ryan Priest.

To get referrals from the national insurance company, repair shops are held up to customer satisfaction, repair quality and cost effective practices, says Priest.
That includes recertification every two years and audits of repair work done by the shop, he says.

Insurers versus attorneys
Whether it's medical malpractice, personal injury or insurance claims, lawyers and insurance companies regularly end up in adversarial positions.

"Our system is set up that way," says attorney Cornelius.

And it's a natural fit that firms involved in personal injury litigation would explore insurance claims.
"If you're injured in an auto accident, you more often than not have property damage," Cornelius says.
Once an attorney gets involved in a case of personal injury or property damage, he or she is naturally looking to get claims paid from insurance funds. On the other hand, insurance companies aren't in business to hand out payments to any and all comers.

"Insurance companies are in business to make money," Cornelius says.
By contrast, when an insurer holds back, that's what generates business for lawyers, Kennon says.
"If the insurance companies paid their claims, I wouldn't have any business," he says.
Kennon oversees a portion of insurance litigation for Morgan, Colling. He says the auto repair work holds a personal fascination for him, plus it deals in hard dollars.

"In personal injury, you have to speculate about the value of an injury," he says. "You know what a car is worth. I start these cases knowing exactly what we need."
Interestingly enough, points out Forman, none of the auto repair cases handled by him have gone to trial. Most end up settled before a trial date is set.

As the litigation proceeds, Kennon says, car owners can file a claim that the insurance company negotiated in bad faith. If proven, that could lead to punitive damages and regulatory intervention, Kennon says.
Beyond that threat, most drivers settle before court simply because they need a car, Cornelius says.
Successful settlements typically cover the cost of replacing the vehicle, plus expenses, Forman and the attorneys say.

For auto repairman Forman, Orlando has been a good place to ply his new trade. That early success now has him thinking bigger.

To be sure, it would take a sizable investment to set up AccidentCheck locations elsewhere.
But he's hopeful.

"If this caught on nationally, it could change the economic structure of the business," Forman says.