The governor of Rhode Island, Lincoln Chafee, has vetoed H-7782A, which, among other things, would have allowed body shops to take civil action against insurance companies if the shops felt the insurance companies did not negotiate in good faith in trying to reach an agreed price.
“Though [Chafee’s] veto message states that he is concerned about the consumer, he clearly put the consumer and small business’s interests aside and bowed to the pressure of the real ‘special interest group’ – the billion-dollar insurance companies,” said a statement released by the Auto Body Association of Rhode Island (ABARI). “Over 200 auto body repair shops have gone out of business in the State of Rhode Island in just the last decade. We’re in a crisis that hurts the consumer. This veto is just another example of why Rhode Island is considered one of the least friendly to small businesses in the nation.
“ABARI has fought to pass laws that protect consumers and small business from insurers who care only about their bottom line. H-7782A was no different. Insurers always claim that rates will go up, regardless of the legislation’s substance, because it’s the last scare tactic they have left. The truth is collision premiums have been declining in Rhode Island, the opposite of their certain predictions.
“As we have for almost two decades, ABARI will be back next year to continue to expose the lies, reveal the truth, and fight to ensure that consumers receive a safe and quality repair, and that small businesses can thrive in the State of Rhode Island. We will continue to educate the consumer, the legislature and the Governor’s office on the unfair and deceptive practices used by insurers on a daily basis – practices that benefit only the insurers.”
The Property Casualty Insurers Association of America (PCIAA) applauded the Governor’s decision, calling it a victory for consumers.
“Governor Chafee’s veto of H-7782A represents the triumph of everyday Rhode Island consumers over well-connected political insiders,” the PCIAA stated. “The governor carefully considered the legislation and rejected this latest attempt by a group of body shops to further increase their revenues at the expense of Rhode Island drivers. We applaud the governor for taking this important stand against special interest legislation and the politics-as-usual approach which fails to protect the people’s interests.
“Residents in Rhode Island already pay among the highest auto repair bills in the nation, and H-7782A could have driven costs even higher and possibly jeopardized driver safety by forcing vehicles that should have been totaled to be repaired. The bill would have ultimately provided a body shop a blank check to charge whatever it wanted and deprived insurers of the ability to negotiate a fair price by threat of litigation. No other state in America requires such a one-sided arrangement, and in the end, the consumers would be the ones to lose out.
“This legislation was a dramatic overreach by the body shops. We hope this veto sends a strong message that enough is enough. It is time to put an end to the body shops’ legislative agenda which has caused the average repair cost to accelerate at a rate more than twice the national average.”
More information:
American Insurance Association Urges Veto of ‘Reckless’ Auto Body Legislation
