Canadian Underwriter

Insurers lose on “preferred shop” appeal

January 2, 2002   by Canadian Underwriter

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A decision by the Ontario Court of Appeal could limit insurers’ ability to recommend preferred collision shops to their claimants. The Court is overturning a lower court judgement from November 1999, and saying that Toronto’s new Collision Reporting Centres bylaw does not violate insurers’ rights under the Canadian Charter of Rights and Freedoms.
The city operates Collision Reporting Centres (CRC), requiring that vehicles involved in collision accidents be taken to CRCs, where a report is filed with police and the involved insurers, prior to being taken to a bodyshop.
As part of the new bylaw, a ban was placed on recommending repair shops to drivers at CRCs following a collision. A list of accredited repair shops was constructed by the city of Toronto, and is made available to vehicle owners at CRCs.
Originally insurers Allstate Canada, General Accident Group and Progressive Casualty launched a case against the new bylaw in July 1999. Their argument was upheld, but has now been overturned by the appeals court.
As of January 1, 2002, signs will be posted at CRCs to tell drivers that it is an offense for anyone to recommend a preferred shop to them when they bring a damaged vehicle into the reporting center.
Among the supporters of the Toronto bylaw are the Collision Industry Action Group and the Toronto Collision Repair Society, both of which were involved in the original drafting of the bylaw. The appeal court’s decision “will further help “level the playing field”, provide better public confidence in the activities at the CRC, strengthen the industry shop accreditation program and ensure that accident victims at a most vulnerable time are assured of the right to have their vehicle safely repaired at a facility of the car owners choice, without influence,” they say.

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