South Carolina, Rhode Island Bills Target Steering - BodyShop Business
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South Carolina, Rhode Island Bills Target Steering

Opponents say legislation could raise costs for consumers; supporters say it will empower consumers with choice and level the business playing field.


Lawmakers in Rhode Island and South Carolina are considering legislation prohibiting insurers from steering policyholders filing claims to specific auto repairers, underlining the legislative debate over whether such anti-steering measures will protect consumers by encouraging choice or saddle them with inflated coverage rates.

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In Rhode Island, H.B. 7782 has been called a “consumer protection” measure that, among other provisions in the legislation, bars insurers from requiring policyholders to use a specified repair shop for claims-related work. South Carolina’s H.B. 4042 applies the same anti-steering measures to glass repairers.

Opponents of such kinds of legislation have largely said restrictions on referrals would push policyholders toward businesses outside of insurer networks for repairs. They say those out-of-network businesses could create higher costs for insurers who would, ultimately, pass those costs onto policyholders in the form of higher premiums and make the search for low-cost auto insurance difficult.


The Property Casualty Insurers Association of America (PCI) voiced concern with H.B. 4042 as it was making its way through the state legislature, saying it could “possibly raise costs for consumers.”

“The ability for insurers to choose these practices has contributed to keeping premiums under control,” PCI said in a February statement.

A PCI analysis showed that, nationwide, glass repairers affiliated with insurers cost 15 percent less on average than non-network providers. Also, glass repair costs have grown at a slower pace for in-network providers, according to PCI.

But supporters say such anti-steering proposals empower consumers with choice and promote fairness in what they say is currently a slanted competition between insurers and small businesses.


Rhode Island Rep. Stephen Ucci (D-Johnston), sponsor of H.B. 7782, said his legislation sought to “level the playing field between the insurance industry and small, locally-owned body shops.”

“Many of my constituents run or are employed by those kinds of organic small businesses,” he said.

H.B. 7782 also grants policyholders and repair shops the right to sue insurers over disputes in repair costs and prohibits insurers from labeling a car a total loss unless repair costs are more than 75 percent of the fair market value of the car before it was damaged.

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