Representatives Matt Lynch (R) and Robert Hagan (D) have introduced HB 526 that would “prohibit auto insurers from requiring, recommending or suggesting that a claimant on a policy have the claimant’s vehicle repaired at a particular repair shop or by a particular person unless the claimant requests a recommendation or suggestion.” While automotive glass companies are not identified in this bill, third-party administrators (TPAs) of automotive glass claims generally offer a recommendation to a related automotive glass company or an affiliated independent glass shop, meaning this bill could have implications for the AGRR industry if passed.
“A violation of this section is an unfair and deceptive act or practice in the business of insurance under sections 3901.19 and 3901.26 of the Revised Code,” according to the proposed legislation.
Lynch reportedly was inspired to introduce the legislation after hearing from an auto body repair shop owner in his district. The repair shop was dropped from an insurer’s list of “preferred providers” after telling his customers that they have “the right to request the companies pay for factory parts,” according to a local report.
“He got kicked off the list because he’s being honest to his customers,” Lynch said, according to the report. “With this bill, there won’t be any preferred lists and the policy has to clearly state one way or another whether you get these aftermarket parts of factory-approved parts.”
The representatives did not respond to a request for comment at press time.
On a related note, groups of auto body shops in Florida and Indiana recently sued more than a dozen insurers alleging the insurers use their direct repair programs to “artificially depress” repair rates and if shops don’t agree, customers are “improperly steered” away.