A Maryland parts bill that would have prohibited insurer-mandated parts procurement processes or vendors
and the usage of aftermarket parts for the first three years of the
vehicle was defeated by the Maryland House Economic Matters Committee on March 13.
The Washington Metropolitan Auto Body Association (WMABA) is disappointed because they believed this bill was an important piece of consumer protection legislation. Despite the vote, WMABA legislative liaisons were encouraged by Maryland legislators’ reaction to understanding collision consumer issues, as the process and pursuant discussion highlighted the workings of the collision industry and how certain claims settlement practices can disadvantage the consumer.
House Bill 574 (Senate Bill 487) was sponsored by Delegate Olszewski (D-6) and Senator Astle (D-30), both with several co-sponsors, and had intended to prohibit insurer-mandated parts procurement processes or specification of vendors, and limit the use of aftermarket parts during the first three years of the vehicle. There was also a provision that woud have allowed for consumer consent to choose aftermarket parts at the time of repair.
The WMABA feels its representatives did a good job outlining the issues, advocating for both the WMABA membership and the consumers they serve, as well as debunking what it called "myths and contradictions" put forth by the opposition.
According to the WMABA, collision repairers were represented well by all those who participated in the hearing and work group processes for both the House and Senate committees. WMABA’s Executive Director Jordan Hendler and Hannah Garagiola, WMABA’s lobbyist and government relations consultant with Alexander & Cleaver, combined efforts with Maryland collision repair business owners both prior to and during the legislative session. Repairer business owners participated in these same meetings, and even more throughout the state communicated to their representatives their view that this law was important to protect Maryland policyholders.
"While this consumer legislation is straightforward, in our opinion, it turned out to be more controversial as medical marijuana and the minimum wage bills," said Garagiola. "Legislators typically do a good job of putting themselves in the place of the consumer, but opposition tactics to promulgate lies and kick up dirt can be hard to overcome. Given how close this year’s efforts came to fruition, I think the groundwork has been laid, and there are good opportunities to succeed with the same language – and some added ammunition – in future sessions."
The primary opponents of the bill included the Property Casualty Insurance Association (PCIA), as well as LKQ Corporation and the Certified Aftermarket Parts Association (CAPA). According to WMABA, State Farm, Liberty Mutual, Nationwide and USAA were the most vocal in opposing the bill. Many of these companies put forth industry press releases, while PCIA took out a targeted email advertisement with the Baltimore Sun, calling the bill an "auto body repair tax" that reduced consumer choice. The opposition focused on the increased costs associated with properly indemnifying their policyholders losses, although when WMABA representatives raised examples of other states with more extensive parts prohibitions and lower premiums, PCIA’s rebuttal was that no single contributing factor impacts premium costs.
"Representing the collision repairer and their customers for this issue was an honor for me," said Jordan Hendler, executive director of WMABA. "Repairers deserve to be as well-represented as any other group. The repairers who joined in the process were well-articulated, smart business owners who were able to convey a professional and realistic view for the legislators into not only how our industry works, but more importantly how insurer mandates can sometimes be in direct conflict with what is best for the consumer. They provided honest, factual information and maintained their professionalism and decorum despite the opposition’s accusations and political tactics. I personally thank them for their commitment to excellence and for doing the right thing even when it made it harder for them to be with their business and family."
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