Auto insurance group APCIA tells RI lawmakers it doesn’t oppose certain charges
Repairers having difficulty with reimbursement of body shop costs might wish to direct the customer or local expert or appraiser to the reviews of the country’s leading auto insurance trade group.
A representative from the American Property Casualty Insurance Association recently described to Rhode Island state lawmakers accusations either from the group specifically or from the majority of insurers deemed acceptable.
Consumers and repairers should be able to participate in the Rhode Island House Corporations Committee hearing on May 20 as proof that APCIA members or insurers in general are “paying for it.”
The hearing involved House Bills 6234, which deal with fees and surcharges related to paint and materials and sublease invoices, and 6235, which sets six standards for used parts requested by the insurer in as part of a collision repair.
APCIA vice president of government relations Frank O’Brien said his group opposed both bills. However, he recognized concepts that he said his group or “many” insurers found acceptable.
“Many” insurers pay for detailed painting materials
HB 6234 extends an existing requirement in the Unfair Complaints Practices Act, General Laws 27-9.1-4. that an insurer must “indemnify an auto body shop for documented costs identified by software programs or industry-recognized systems for paint, body and refinish materials in auto body repair claims.”
HB 6234 would rewrite this passage to indicate that an insurer must “compensate an auto body shop for its documented costs as identified by the most recent version of software programs or systems recognized by the automotive industry for paint materials,” bodywork and refinishing in auto body repair claims. , including, but not limited to, programs such as Mitchell’s RMC, PMC Logic, Paint, Micromix, or a paint manufacturer’s programs. An insurer should not discount documented costs by not using an entire system, including an industry standard markup.
O’Brien told lawmakers that “few” insurers are refusing material charges today and “many others are paying them.” Those who refuse it see the items as overhead, he said.
His case against the bill mainly highlighted other aspects of the language, in particular the idea of creating an indefinite notion of industry standard markup.
‘Many’ sublet service businesses ‘are needed’
O’Brien said the APCIA was “even more concerned” with the final passage added to state law by HB 6234, despite agreeing with some parties. According to HB 6234, it would be an unfair claims practice if an insurer were:
Refuse to pay an auto body repair shop for documented necessary sublease services paid to vendors or incurred by the auto body repair shop, for specialized or one-time services performed as part of the overall repair process, including the costs and labor incurred to research, coordinate, administer or facilitate the necessary sublease service and standard automotive industry markup. Examples of sublease services include, but are not limited to, towing, hauling, suspension, alignments, electronic calibrations, diagnostic work, mechanical work, and fees paid to release a vehicle.
“It includes a wide range of services, many of which we recognize are necessary,” O’Brien said of the paragraph.
Instead, he focused his opposition on the markup discussed by the text, saying it “could cause costs to skyrocket in Rhode Island.”
Cleaning of recycled parts, suitability OK
O’Brien attacked House Bill 6325 as a “constructive ban on the use of recycled parts”.
However, he continued, “… We have no problem with the provisions of the bill that deal with using proper parts, paying for their fit, paying to have them finished, all that sort of thing. . “
Rather, the APCIA objected to the “absurd requirements” related to proximity to parts “as well as mileage requirements,” O’Brien said.
HB 6325 has six standards for used parts. O’Brien didn’t go point by point in his oral testimony on May 20, but repairers, consumers, and insurers can get some idea of what the APCIA might object to that they “don’t.” no problem “.
(1) The parts used must be at least equal in kind and quality to the original parts in terms of fit, quality, performance and warranty, and be from a vehicle of the same year or newer and have the same mileage or less than the vehicle receiving the used part;
(2) Whenever possible, an insurance company should not require the use of multiple parts distributors to supply parts for a single repair and should limit the distance from the original parts to
3 fifty (50) miles, and ensure delivery unless the vehicle owner agrees;
(3) Insurers specifying the use of used parts should take into account the reasonable cost of any modification of parts that may be necessary during the repair, and the cost of assembly, disassembly and / or handling of parts. used which does not result in the restoration of the vehicle to its condition prior to the loss;
(4) If the used part specified by the insurer does not allow the vehicle to be repaired in its condition prior to the loss, the insurer must then specify the use of an original part;
(5) The auto body shop shall immediately notify the assessor if the used part specified by the insurer does not allow the vehicle to be repaired to its pre-loss condition and allows the assessor to re-inspect the vehicle and to make the appropriate additional authorizations, if necessary; and
(6) The auto body shop shall provide documentation of used parts that do not meet the requirements of this section, as reasonably required by the insurer. The insurer is authorized to exercise any right of recovery available against the distributor of used parts.
Total loss obligation notification OK
Another major auto insurance business group opposed to HB 6324 has specifically indicated that it does not oppose the bill’s new wording regarding total losses. So it could also be something that repairers, lawmakers, and consumers can easily sue in other states.
Current Rhode Island Unfair Claims Law 27-9.1-4 states that an insurer who does not wish to keep a totalized car “must notify the owner of the vehicle in writing of the conditions required to obtain both a salvage title and a reconstructed title “. This implies that the carrier does not keep the vehicle – but it does not specify this fact.
HB 6234 would add a requirement that an insurer “obtain, in writing, the consent and acknowledgment of the owner that the insurer is not retaining the salvage and include a statement of the owner’s obligation and the potential costs to dispose or retain the salvage. recovery ”.
“We have no objection to the total loss notification provisions,” Rory Whelan, regional vice president of the National Association of Mutual Insurance Companies, told the Companies Committee on May 20. His group opposed the other two changes made by the bill, he said.
House Corporations Committee Deputy Chairman William O’Brien D-North Providence told the committee hearing on May 20 that the new language of total loss was intended to address a situation experienced by the one of his constituents.
An insurer has totaled the voter’s vehicle and “has just abandoned the car to the body,” he said. The car had accumulated $ 1,000 in storage costs “for which the insurer was responsible,” lawmakers said.
“This is the main reason why I sponsored this bill,” he said.
Rhode Island House Corporations Committee Hearing on HB 6235
Rhode Island Legislative Assembly Capitol Television, May 20, 2021
The American Property Casualty Insurance Association said in May 2021 that it was not opposed to the subletting of certain services by bodybuilders or to certain work related to recycled parts. (Dmitry Volkov / iStock)
Sponsor of Rhode Island House Bill 6234 and Deputy Chairman of the House Corporations Committee, William O’Brien, D-North Providence, discusses the bill at a committee hearing on May 20, 2021. (Capture of ‘Rhode Island Legislature Capitol TV screen)