Louisiana has filed suit against State Farm Insurance, claimingthe insurer's Select Service and Parts Trader services illegallymanipulated markets by controlling rates and strong-arming repairshops to use unsafe used or recycled auto parts.

The suit alleges State Farm falsely tricked consumers to workwith auto body shops that have signed contracts with the insuranceprovider, and also pressures body shops to do repairs within ashorter time frame out of accordance with known estimatetimes.

“State Farm has created a culture of unsafe business practicesin which consumer vehicle repairs are performed with cost-savingsas the primary goal rather than safety and reliability,” saysLouisiana Attorney General James D. “Buddy” Caldwell in astatement.

This is not the first lawsuit against State Farm that deals withrepair-shop estimates and State Farm's Parts Trader program—whichuses parts that are certified (though never tested) throughCertified Automotive Parts Association (CAPA). A class-actionlawsuit is underway in Mississippi claiming State Farm ignoredregulations by adjusters and manufacturers to try and cutcosts.

“They say, 'We know it needs to be done, but we're not gonna' bepaying for it,'” John Mosely, owner of Clinton Body Shop, whichfiled suit with 35 other companies in Mississippi, tells PC360.“They're controlling our rates. We raised our labor rate June 2,and State Farm hasn't paid our new rates at all.”

Mosely claims State Farm is pressuring him to use parts that arewell-known to be unsafe and have been deemed hazardous bymanufacturers in order to keep repair costs down.

“It's all about money. They're just making a cheaper repair andsometimes a faster repair,” Mosely said.

But the latest lawsuit concerns Louisiana State Farms clients,who, according to Caldwell's statement, in 2012 spent over $1billion in auto premiums, the highest in the state.

“Each month Louisiana consumers give their hard earned money toState Farm under the assumption that the insurer will take care ofthem if an accident occurs,” says Caldwell. “This simply isn'thappening. Quite frankly, State Farm has been there for State Farm,not the Louisiana consumer.”

Phil Supple, a spokesman for State Farm, says, “The descriptionin this lawsuit is not in line with State Farm's mission to servethe needs of its customers, and our long, proud history ofachievements in advancing vehicle safety. We are reviewing thelawsuit and will have more to share soon.”

The suit can be read here.