A Connecticut bill that restricts auto insurers from directing clients to certain car repair shops – legislation opposed by insurers and agents alike – is headed for a floor vote in the state’s General Assembly.
The bill, part of a package of “anti-steering” laws, prohibits insurers from requiring a client to choose a motor vehicle repair facility as a condition of having repairs paid for. It would also require insurers to pay the usual and customary hourly rate that the general public in the same area of the state commonly pays for repairs.
Supporters of the bill – which include the Auto Body Association of Connecticut and Attorney General Richard Blumenthal – argue that it would provide greater protections for consumers by breaking up the use of preferred body shops.
They say the legislation ensures drivers can choose the body shop they want, eliminate delays in the repair process and prevent body shop owners from being pressured to use cheaper aftermarket parts, rather than those made by original equipment manufacturers.
“Drivers deserve rights and respect when their cars need repair. They own the car, so they should have the right to select the repairer – without coercive steering or strong arming by their insurer,” said Blumenthal’s office in a statement supporting the bill.
Many insurers, however, oppose the bill.
Opponents, which include The American Insurance Association, the Insurance Association of Connecticut and the Property Casualty Insurers’ Association of America, argue that it is anti-competitive and would only increase auto insurance costs.
“What motivation would the insurer have to recommend or suggest a repair shop that does shoddy work? Financially, the insurer would be harmed, because they would have to pay multiple times for the same repair if it was guaranteed, and would likely incur the wrath of the insured, who may take his or her insurance business elsewhere,” said the Insurance Association of Connecticut in a statement opposing the bill.
The bill – S.B. 288 – has come under fire by the Professional Insurance Agents of Connecticut, which says it would have unintended negative consequences for agents in the state who recommend body shops to their clients.
“When consumers experience the misfortune of a car accident or other vehicle damage, the insurance agent is often the first person they call,” said Michael Keating, president of the agents’ trade group. “They will often ask their agent to recommend a reputable auto repair shop. Barring agents from offering options would prevent the state’s insurance consumers from getting their agents’ best advice.”
The bill has already been approved by the General Assembly’s transportation committee and was passed without changes by its judiciary committee. The next step is a final floor vote, which according to the transportation committee’s clerk’s office, has yet to be scheduled.