New Louisiana Law Forbids Insurers from Recommending Repair Shops

Louisiana has a new law, as its legislature announced House Bill 411, was enacted last week. The law, also known as HB 411, “requires that an insurer shall provide notice in any circumstance to the insured that there is no requirement to use a recommended place or shop for motor vehicle service or glass window repair.”

The Governor signed HB 411 into law June 11, 2019. It becomes effective August 1, 2019. The new law will give insureds the option to choose a particular motor vehicle repair shop. While also prohibiting insurers from swaying its insureds from going to a particular repair shop.

“An insurer shall not recommend the use of a particular motor vehicle service or network of repair services without informing the insured or claimant that the insured or claimant is under no obligation to use the recommended repair service or network of repair services,” a portion of the new law reads.

According to the new law, an insurer may not participate in any act or practice of intimidation, coercion, or threat to use a specified place of business for repair and replacement services. Those who are found in violation of it will be fined, the amount fined will vary based on the number of violations had.

“[the] Proposed law repeals present law and provides that if the insurer violates present law then the commissioner of insurance shall fine the insurer $1,000 for the first offense, $2,500 for a second offense that occurs within a twelve-month period of the first offense, and $5,000 for a third or subsequent offense that occurs within a twelve-month period of the preceding offense,” a portion of the new law reads.

Louisiana’s Governor signed HB 411 into law June 11, 2019, and according to its legislature, it becomes effective August 1, 2019.

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3 Responses to New Louisiana Law Forbids Insurers from Recommending Repair Shops

  1. Kerry Soat says:

    Third Party Administrators are not Insurance Companies. This law doesn’t appear to apply to them. So what has changed??

  2. Daveycrewcut-Retired says:

    From the new law:

    (3) An insurer shall not engage in any act or practice of intimidation,
    2 coercion, threat, incentive, or inducement for or against an insured or claimant to use
    3 a specified place of business for repair and replacement services.

    It seems to me that when an insurer contracts with a company that also repairs and replaces auto glass to administer its glass claims, it would be in violation of the above section of the new law. The practice of using a conflicted TPA that also repairs and replaces auto glass is in and of itself intimidating and coercive.

    The law didn’t go far enough. It should have also guaranteed insureds and their freely chosen repair shops the right to refuse to deal with any TPA that is in any way affiliated with a different auto glass repair facility during the claim settlement process.

  3. Mark1 says:

    Wasted time. Why? Four reasons:
    1. Enforcement; dont’ hold your breath.
    2. Does not stop “HOWEVER, you MAY have to PAY A DIFFERENCE, and WE DON’T WARRANTY “THAT” shop.”
    3. Ambiguous if it even applies to the TPA.
    4. The fines are chicken feed compared to the gains. Crime pays, in other words.

    Sorry, but many states have been there, done that. Nice try though, but again, good luck on enforcement, and for goodness’ sake, feel FREE to prove me wrong!
    JMHNLO

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