Legislative Lowdown - BodyShop Business

Legislative Lowdown

Connecticut – A Connecticut bill that would require disclosure to consumers that they have the right to choose the repair facility to complete repairs to their motor vehicles was recently approved by the state’s Senate. House Bill 5152 will now go to Gov. M. Jodi Rell for final approval.

If passed, the bill would require insurance companies to include the following notice on all issued insurance cards in capital letters and boldface type:

“You have the right to choose the licensed repair shop where the damage to your motor vehicle will be repaired.”
If passed, the bill also would require motor vehicle repair shops to provide notice to insurers of the need for supplemental repairs and to establish a time frame for insurers to inspect the motor vehicle prior to commencement of such supplemental repairs.

The bill would take effect on January 1, 2009.


Iowa – A bill that will create a consumer advocate bureau in Iowa was recently signed into law by Gov. Chet Culver. The bill, House File 2555, deals with a number of issues relating to the Iowa Insurance Department.
Under the text of the bill, the consumer advocate bureau will be “responsible for ensuring fair treatment of consumers by persons in the business of insurance and for preventing unfair or deceptive trade practices in the insurance marketplace.”


Minnesota – The Minnesota House recently passed a bill that will require insurance companies to use the agreed upon estimating systems in their entirety when calculating collision damage.

Senate File 3508 adds to a laundry list of prohibited insurer actions the following language: “unilaterally and arbitrarily disregard a repair operation or cost identified by an estimating system, which an insurer and collision repair facility have agreed to utilize in determining the cost of repair.”

The Alliance of Automotive Service Providers, Minnesota (AASP-MN) had listed this legislation as one of its top three priorities in the 2008 session, besides a shop licensing proposal and an effort to prohibit insurers from owning repair shops.

House File 3822, a companion bill with more specific language, was indefinitely postponed from consideration in favor of Senate File 3508. That bill would have specifically prohibited insurers from manipulating estimating database information and made it illegal to modify any published manual relating to auto body repairs; fail to use a manual or system in its entirety in the appraisal of a motor vehicle; or refuse to compensate an auto body shop for documented charges identified through systems for paint and refinishing materials in repair claims.


Minnesota – Minnesota Governor Tim Pawlenty signed into law legislation (Senate File 3508/House File 3822) proposed by the AASP-MN that  prohibits insurers from unilaterally and arbitrarily disregarding a repair operation or cost identified by an estimating system. The legislation will become effective on August 1, 2008.  

Minnesota Statutes 2007, section 72B.092, subdivision 1, is amended to read: Prohibitions on insurer. No adjuster or insurer, director, officer, broker, agent, attorney-in-fact, employee or other representative of an insurer shall in collision cases: unilaterally and arbitrarily disregard a repair operation or cost identified by an estimating system, which an insurer and collision repair facility have agreed to utilize in determining the cost of repair.

“Collision shops simply want to know that when they’re required to incur the cost of using certain estimating systems,  the results of those systems will be respected in terms of the repair procedures they undertake and the payments they receive,” says AASP-MN Executive Director Judell Anderson. “Under this bill, insurers will no longer be able to selectively use these estimating systems.”  

The estimating database bill was one of three proposals advanced by AASP-MN during the 2008 legislative session. The two other bills, one which established a licensing program for collision repair shops and the other which prohibited insurers from owning repair shops, were heard and approved in the House Commerce Committee but did not meet deadlines for additional committee hearings. These issues will be carried over to AASP-MN’s 2009 agenda.

In addition, AASP-MN warded off a measure to reduce the threshold for disclosure of motor vehicle damage from 70 percent to 60 percent of the cash value of the vehicle prior to sustaining damage. This legislation would have been detrimental to the collision repair industry by increasing the number of vehicles designated as total losses.


Missouri – While the Missouri Senate Small Business, Insurance and Industrial Relations Committee passed Senate Bill 775 sponsored by Sen. Wes Shoemyer, the anti-steering bill isn’t likely to move any further since the legislative session ends on May 16.

The bill requires insurance carriers to inform auto insurance policyholders on first contact that they can choose any repair facility they want. The bill will be reintroduced next year, according to Sen. Shoemyer’s spokesperson Kathy Armstrong.

“The successful thing was that we at least got the insurance guys coming into our office and talking to the senator and them understanding that he’s serious about [steering,] and they’ve agreed to work on this over the summer,” said Armstrong.

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