The Connecticut Committee on Insurance and Real Estate had a public Supplements
hearing this week covering three bills dealing with steering, total
loss calculations and supplements, drawing testimony from the collision
repair and insurance industries.
S.B. 896 would reserve the right for an insurer to authorize any repair
work beyond the original estimate before a shop could continue with
repairs.
Bob Skrip, President of the Auto Body Association of Connecticut
(ABACONN), testified against the bill, saying it would take control
over the repair away from vehicle owners and place it into the hands of
insurers who have a “vested interest in limiting the scope and cost of
auto repairs.”
“Insurance companies are not our customers,” Skrip said in his
testimony. “The vehicle owner is our customer, and the one we
ultimately need to satisfy with a safe, quality repair without third
party influence from the insurance industry.”
The bill also states that if a repairer proceeds with supplemental work
without insurer approval, the shop would be prohibited from collecting
payment from the insurance company or any other party for the work
performed.
“This means the insurance companies have the discretion to send
vehicles out on the highways with defects that could cause accidents
and injuries to drivers, passengers and others,” Skrip said. “Are we
going to allow the insurance companies to say what a private citizen
can do with their cars?”
Connecticut Attorney General Richard Blumenthal also opposed the bill
and said that legislators could better serve consumers by developing
laws that promote consumer interest in obtaining quality repairs at
fair prices.
Nationwide Insurance submitted testimony in favor of the bill stating
it would enhance the “transparency, efficiency and effectiveness” of
the repair process and would help prevent repair fraud.
Steering
H.B. 6446 is an anti-steering measure that would stop insurers from
offering special warranties or waived deductibles as enticements to
insureds for using a preferred repairer. Both the Property Casualty
Insurers Association (PCI) and the American Insurance Association (AIA)
testified against the bill, calling it “anti-consumer.”
“Through H.B. 6446, some auto body repair shops are attempting to limit
an insurer’s ability to offer an important and very popular benefit to
consumers – a lifetime warranty on the repair work,” said Paul Magaril,
PCI counsel. “While an auto repair shop may guarantee their work, this
is of little benefit to a consumer who has moved or is traveling. The
warranty offered by insurers extends beyond the particular direct
repair facility used by the consumer and can be used at any such
facility in the country.”
AIA Vice President David Snyder echoed PCI’s sentiments, saying, “We
fail to see how consumers are helped by denying insurers the ability to
provide tangible service and financial benefits.”
Blumenthal disagreed and said that such incentives, which he called
“subtle coercion” on the part of insurers, should be banned because
they “undercut” the state’s anti-steering laws (click HERE to read about Connecticut’s newly enforced anti-steering measure).
Loss Calculations
H.B. 6450 would change the way insurers calculate the value of a
totaled vehicle when reimbursing its owner. Insurers would have to
obtain a vehicle’s retail value from two automotive industry sources,
then use the higher of the two values when reimbursing an insured,
ensuring that there’s “no additional cost to a claimant to replace” his
or her vehicle, according to the bill. PCI said it is seeking to amend
the bill.
The Committee on Insurance and Real Estate is tasked with recommending
any changes to the bills and whether the state’s House and Senate
should pass them.
