A Tacoma auto repair shop has benefitted from attention generated by the Wall Street Journal in its attempts to put heat on colleagues and insurers alike, by encouraging customers to insist on better service.

So far, seven of Mike Harber’s customers at Stroud’s Auto Rebuild on South Tacoma Way have become part of a state-wide suit over portions of their claims that insurers refuse to pay. The suit was filed by Houston, Texas attorney Debra Hayes, who has similar litigation pending in 17 other states.

At stake is a principle known as diminished value. Most insurance policies are written to protect policyholders not just against the cost of repairing a vehicle damaged in accident but from diminished value.

“No repair, no matter how well done, can bring a car back up to factory-original status,” says Mike Harber, Stroud’s president. “Even if the insurance company pays the full cost of repairs, the value of your car has been diminished. Under your contract, you’re legally entitled to be compensated for that.”

Most policyholders don’t know to ask for such compensation, he says, so they don’t receive it. The practice of not providing it has become so common that many insurance automatically reject any portion of a claim based on diminished value.

“This is a problem,” confirms Jim Stevenson of the Office of the State Insurance Commissioner. “We get about a dozen cases a year where claimants have problems collecting. We probably get 50 or 60 inquiries each year from people who hadn’t been aware of this option and need more information.”

Harber emphasizes that such claimants are only demanding what their insurance contracts say they’re entitled to.

“This is not some new scam consumers are trying to run,” he says. “There are legal precedents for diminished value that date to the ’20s and ’30s.”

Matters can be further compounded by unscrupulous repair shops. If a repair shop does a sub-standard, or fraudulent, repair job, the insurance company is obligated to pay for re-repair. Owners may be entitled to additional compensation because shoddy repair jobs can reduce the value of the car beyond the devaluation produced by the original damage.

Harber uses the term shocking to describe problems turned up by Stroud inspections after customers were charged for repairs done at shops in this area.

“We are perfectly willing to contact the authorities when we find evidence that seems significant,” Harber says.

Because of such problems, Stroud has allied itself with an Atlanta-based firm called WreckCheck, which has created a 142-point checklist in what it terms an effort to objectively determine whether specific repairs meet standards.

“Stroud’s is the only shop in the Northwest affiliated with WreckCheck,” says Harber. “As such, it has reaped the benefits of national publicity the issue of diminished value has received.”

Mention of WreckCheck in a recent Wall Street Journal edition of Smart Money magazine—”Ten Things Your Auto Insurer Won’t Tell You”—led dozens of customers to request inspections of their cars.

“I’m not trying to harm other repair shops,” Harber insists. “I’m just trying to raise the bar a little bit as to the quality of repairs, because when an improperly repaired car goes on the road, it’s not just dangerous to the driver, it’s dangerous to everybody. “

By Christopher Hord, Business Examiner staff