Alliance Troubled by Decision to Certify Class Action Lawsuit in Ill. Aftermarket Parts Case

The Alliance of American Insurers offered the following comment on a recent decision by Madison County, Ill., Circuit Judge Nicholas Byron to certify a class-action lawsuit regarding the use of aftermarket parts to fix damaged vehicles. The suit involves 30,000 GEICO Corp. Illinois policyholders.

“The Alliance of American Insurers is disappointed with the court’s
decision, due to the chilling effect it could have throughout the
country on the use of aftermarket auto parts,” said Kirk Hansen,
Alliance director of claims. “This will have a negative impact on the
cost savings that insurers and their customers enjoy with the freedom to use certified aftermarket replacement parts. Alliance studies over the past 20 years have repeatedly shown that car company parts from the original equipment manufacturers cost an average of 60 percent more than aftermarket auto parts of equal quality.”

He added that the case once again reportedly clearly demonstrates the need for reform of the class-action court system. The Illinois Supreme Court is currently reviewing a similar case (Avery v. State Farm) that resulted in a $1.2 billion verdict against State Farm in 1999.