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A Jan. 23 Ohio appeals court decision to protect Progressive Corp. against a national class action suit averted “significant cost increases” in auto insurance premiums, according to Ohio Insurance Director Ann Womer Benjamin.The case, Augustus v. Progressive Corp., involved Eric Augustus, a Kentucky resident dissatisfied with the November 1998 repairs to his 1993 Chevrolet pick up truck. Augustus filed a lawsuit and sought class action status in 1999, accusing Progressive of not fulfilling its contractual duty to return his vehicle to “pre-loss condition” because the company allowed the use of two non-Chevy replacement parts.Justices in Ohio’s Eighth District Court of Appeals in Cuyahoga County said they denied class-action status because individual questions of fact outweighed common questions of fact. But Benjamin argued state law expressly permits auto insurers to make repairs with aftermarket, or generic, parts, also known as non-OEM (original equipment manufacturer) parts.“Granting of this class action would have further coerced insurers from using aftermarket parts, just as Avery v. State Farm, did in 1999,” said Kirk Hansen, claims director for the Alliance of American Insurers, an industry trade group.“Too often the courts let multi-state class actions usurp state regulation of insurance, permitting judges to become de facto regulators of insurance industry practices,” Hansen said.An Alliance of American Insurers study found that the cost of building a 2001 Chevrolet Cavalier with OEM parts was $63,240, while the manufacturer’s suggested retail price was only $15,395. Industry observers believe that without non-OEM parts, manufacturers’ large share of the parts market could lead to even higher costs for auto repairs. That, in turn, would lead to higher premiums.The Ohio Department of Insurance filed an amicus brief with the court in support of Progressive, the nation’s fourth-largest auto insurer, in September of last year.Benjamin said Ohioans “enjoy one of the healthiest automobile insurance markets in the country” and the suit, if allowed, would have destabilized the broader auto insurance market in the state. The appeals court upheld a lower court decision.