In an opinion piece that was recently published in the Providence Journal, Frank O’Brien, vice president of state government relations for the Property Casualty Insurers Association of America, blamed the Auto Body Association of Rhode Island (ABARI) for having the nation’s second highest average body shop collision repair costs.
O’Brien referenced three auto body bills backed by ABARI recently heard by the House Corporations Committee of the Rhode Island state legislature, bringing the total count of ABARI-backed legislation to five so far in 2014.
“These bills are the continuation of ABARI’s decade-long legislative agenda that has contributed to the increased cost of auto body repairs in the state,” O’Brien stated in the piece. “…ABARI-backed legislation has been a factor not only in increasing the amount of money paid to auto body shops for repairs, but also in limiting the role of auto insurers in the claims process, which limits insurers’ ability to provide ‘checks and balances’ on behalf of their customers. That impact comes at the expense of Rhode Island consumers.”
O’Brien said the 2013 average body shop collision repair cost in Rhode Island was 28.5 percent higher than the natural average, and that 10 years ago it was only 2.5 percent higher than the national average.
Jina Petrarca-Karampetsos, a spokesperson for ABARI, says ABARI debunked PCIA’s claims in a recent hearing.
“They blame us for everthing from high rates to global warming,” said Petrarca-Karampetsos. “It’s important to note that Rhode Island’s auto body labor rates were $38 in 1999, $44 in 2007 and $44 to $45 in 2014. More importantly, the insurers talk as if we write the appraisals. We don’t. They write the appraisal and they decide what they will pay. We have not tipped the scales. They cannot point to a law that requires that they pay more money to shops.”
Petrarca-Karampetsos countered with statistics from the National Association of Insurance Commissioners showing that auto insurance profits in Rhode Island have consistently outpaced the national average since 2002. Also, that premiums in the state have gone down from 2002 to 2010.
She adds that none of ABARI’s consumer protection legislation has driven up the cost to repair a vehicle.
“ABARI has supported legislation over the last decade for the purpose of supporting small businesses and protecting consumers. Not one piece of legislation supported by ABARI requires an insurer pay a greater amount for auto body repairs."
Instead, she says ABARI’s activism has resulted in legislation which:
• Allows the consumer the right to choose a repair shop and ensures that they are properly informed of their right
• Requires an appraisal inspection by a licensed auto damage appraiser for all vehicles with $2,500 or more of damage
• Requires technicians working on vehicles in auto body shops to be certified
• Requires insurers to use one industry manual in its entirety to appraise a vehicle
• Allows a consumer to choose a rental company, which has led to several new small businesses in Rhode Island
• Requires insurers to conduct a labor rate survey and report their results to the department of business regulation
• Requires insurers to use automotive industry valuation sources when determining the value of a total loss vehicle
“All of the foregoing does not mandate that an insurer pay higher repair costs to an auto body repair facility. Instead, they are all intended to protect consumers and professionalize the auto body industry, and as demonstrated have not resulted in higher insurance premiums for Rhode Island consumers.”
More information:
