Two collision repair bills dealing with supplements and steering failed to make it out of the Connecticut General Assembly’s Joint Committee on Insurance and Real Estate after a vote on March 12.
Senate Bill 896, which was introduced in February, would have greatly increased the role of insurance companies in the repair process by requiring shops to give advanced notice to insurers when supplemental repairs were needed.
House Bill 6446 would have prohibited insurers from reducing deductibles or offering additional warranties if a customer used a preferred repair facility “except as provided in a consumer’s automobile liability insurance policy.” It also would have established premium discounts for motor vehicles with VINs etched on the lower corner of the windshield and on each side or rear window.
Both bills are now effectively dead on arrival, but language from each will be incorporated into a new bill, say members of the Auto Body Association of Connecticut (ABAC).
Under SB 896, shops would have had to give “reasonable notice” to insurance companies if supplements were needed, and the insurance company would have had three business days after receipt of the notice to inspect the vehicle. Shops would have been prohibited from moving forward with the repairs without approval from the insurer.
Further, the bill would have made it possible for the insurer to deny payment to the repair shop if those requirements weren’t met.
The bill also would have required shops to provide invoices to insurance companies upon request. The repair shop would have had to certify under penalty of false statement that insureds had paid their deductibles, that all repairs were made “pursuant to the estimate,” and that repairs included all items authorized by the insurer.
Repairers in the state, however, considered the bill a power-grab that would have given insurance companies near complete control of the repair process, essentially establishing the insurer as the proxy for the vehicle owner.
“This would have taken the customer out of the equation and turned the insurance company into the customer,” said Bob Skrip, owner of Skrip’s Auto Body in Prospect and president of ABAC. “If this had passed in Connecticut, it would have had an enormous ripple effect across the country.
At a February 17 hearing on the bill, repairers testified that the bill would place too much power in the hands of insurers, and possibly raise conflicts with existing Department of Motor Vehicle requirements that customers should authorize all repairs. Connecticut’s Attorney General also opposed the measure.
The insurance industry, however, supported the bill as a way to eliminate fraud. According to a written statement submitted by Nationwide Insurance, “These are important steps toward adding transparency and effective anti-fraud measures to the repair process.”
“Often insurers are forced to pay for unnecessary additional repair work that was neither authorized nor subject to an inspection,” said a statement from the Insurance Association of Connecticut. “Unwarranted charges can add substantially to the final cost of repairs, increasing claims costs, which result in higher premiums for insureds.”
The insurance industry also opposed HB 6446. “We fail to see how consumers are helped by denying insurers the ability to provide tangible service and financial benefits,” says David Snyder, the American Insurance Association’s vice president and general counsel.
The Insurance Association of Connecticut claimed the bill was “an attempt to protect some auto body shops from the competitive marketplace, to the direct detriment of the consumers of this state.”
Although 6446 was ostensibly designed to prevent steering, Bill Romaniello, legislative director for ABAC, said that it would have allowed insurance companies to write “HMO-style” policies that would have set up incentives for consumers to use “in-network” shops in much the same way they are required to use in-network hospitals under some health insurance plans.
“They would no longer have had to steer you,” Romaniello says. “Every policy written would have said that these are the repair shops you get to choose from, and there are no out-of-network repairs without cost.”
The Connecticut Insurance Department also opposed the bill.
Romaniello, who owns All-Pro Collision Repair in Southington, Conn., expects new legislation to be introduced through the transportation committee later in March that will incorporate the anti-steering language of 6446, as well as material from SB 896 pertaining to the customer’s right to choose their repair shop.
