A bill defining “deceptive referral” and requiring insurers to notify claimants that they have the right to choose a repair center H.B. 186 was introduced in the Kentucky House of Representatives last week. The bill, which also addresses labor rate issues, is similar to a Senate bill pre-filed last year that has since been withdrawn.
The bill defines “deceptive referral” as “any trade practice by which an insurer attempts to persuade, convince, coerce or intimidate a claimant into changing his or her choice of repair facility after the insurer has been informed that the claimant has selected a repair facility.” The bill would make this practice illegal.
The bill would also require the labor rate for damages paid to be based on the “free market rate,” which it defines as “the labor rate the general public pays, without the influence of the insurance industry, for repairs on similar motor vehicles in the same geographic area.”
The bill would also:
Prohibit an insurer or appraiser from steering a claimant to use a specified facility for appraisals or repairs
Require evidence of proof of financial responsibility or security regarding motor vehicles to contain a statement regarding an insured’s right to choose a repair facility
Require appraisers of motor vehicle damage claims to conduct a physical visual inspection of the vehicle and to leave an estimate of the damages with the repair facility
Prohibit the alteration of an estimate of physical repair damage by anyone other than the original appraiser
Require all claims to be paid within 30 days of notice of the claim and establish penalties for violations of this requirement
The bill has been referred to the House Banking and Insurance Committee.
More information:
View a summary of the bill