Top 4 Reasons Auto Repair Shops Are Sued

Any business that provides its customers with products or services has potential lawsuits. Their legal exposures create a need to shield business owners from devastating losses, which is what repair shops with comprehensive NJ Auto Repair Insurance rely on when inevitable legal action happens.

Lawsuits can run up legal defense and settlement costs high enough to cause a business to fail. By sharing the risks of such potential losses with a vast pool of repair shops inside an insurance policy, companies can afford the protection they need from potentially business-ending expenses when sued by their customers.

Car ownership, including repairs and service, takes a significant chunk of consumer spending, making them wary of expensive auto repairs. And because there is a common lack of knowledge about car repairs, the business draws some operators with shady, if not illegal, practices. Together, these conditions create a litigious environment that threatens auto repair shops. Additionally, most states, including New Jersey, have laws to protect consumers from car repair fraud.  

There are many reasons for auto repair shops to become entangled in lawsuits.

The following four examples top the list of why consumers take legal action against their automobile mechanics.

Faulty or Defective Work

When a mechanic makes repairs negligently, the work can cause vehicle damage, property damage, or injuries, and even death to people. Mechanics are required to use a reasonable standard of care when they perform repairs on customer vehicles. Consumers have a right to expect their vehicle repairs by mechanics who have the knowledge, skills, experience, and training to work professionally.

Mechanics must make proper repairs to vehicles under their care. Examples of faulty, defective work include installing the wrong part, disabling safety devices, or doing substandard work when installing correct parts. It is the repair shop’s responsibility to repair vehicles and return them safe to drive. Auto techs need the skills to repair, remove, reinstall, replace, and modify parts without causing damage or making the vehicle unsafe. Cases of mechanic’s misdiagnosis negligence are also a reason for lawsuits.

Fraud

Acts of fraud in auto repair shops happen in many ways. Dishonesty, deception, false pretense, false promise, misrepresentation, and unconscionable commercial practice, which is being a dishonest cheater. If the auto shop charges for parts or services it doesn’t perform is an example of an auto shop’s liability leading to lawsuits for damages.

Issues with Estimates

Auto repair shops that provide false or misleading payment estimates, fraudulent or deceptive payment estimates, fail to provide a detailed estimate, or inaccurate cost of repairs have legal liabilities. There are consumer protection disclosure laws in most states. They mandate auto repair shops provide a detailed work to be done estimate with an assurance to honor the quote. Full disclosure includes noting if new or used parts are being used in the repair.

Breach of Warranty

A network of auto repair shops is how automobile and parts manufacturers contract for warranty services. They rely on local auto repair shops to service new and used cars with their warranties, which are often specific to a particular service to a vehicle.

Issues with stipulations regarding what repairs are covered, for how long, and may require consumers to use their recommended mechanics are reasons why some mechanics fail to honor the warranty. Failure to honor warranty claims is a reason for auto repair shop lawsuits.

Managing Risks

There are ways to avoid or mitigate risks, such as discussed here. Working with a partner like us at the Dickstein Agency is an example. You get our industry expertise and market access that turns into protecting your shop with comprehensive, affordable NJ Auto Repair Insurance. We’re a local New Jersey business here to help.  

About Dickstein Associates Agency

Dickstein Associates Agency has distinguished itself as a leading provider of personal and business insurance in the tri-state area for over 55 years. We pride ourselves on being advocates for our clients and providing them with quality and affordable coverages. As Trusted Choice™ independent insurance agency, we partner with various national and regional carriers, allowing for flexible and unbiased coverage for each client’s unique circumstances. For more information on how you can leverage all of your insurance to work best for you, and how we can secure the best insurance in the marketplace based on your specific needs and business objectives, contact us today at (800) 862-6662.