June 28, 2012—The American Insurance Association (AIA) praised the governor of Rhode Island for vetoing legislation that could have let body shops sue insurers who don’t agree to pay a non-negotiable labor rate.
The AIA says that the Rhode Island legislation would have also made it so that Rhode Island consumers couldn’t have the option to total a vehicle and accept a check for its value if the cost to rebuild the car was less than 75 percent of what the vehicle is worth.
"AIA commends Rhode Island Gov. Lincoln Chafee for vetoing H. 7782A, legislation which represented poor public policy that would have led to an explosion of litigation. No other state in the nation allows auto body shops to set non-negotiable rates and attempt to force them on third-party payers under threat of litigation. Rhode Island is already one of the most expensive states in the nation for auto body repair, and this bill would have made the problem even worse,” said Gary Henning, northeast region vice president for the AIA, in a prepared statement. "Gov. Chafee stood with consumers by taking a stand against this bill. The governor's veto protects policyholders from increased repair costs and increased litigation."
