“It’s a bad bill that’s designed to punish mom and pop shops, the little guys, from billing what we think is fair and reasonable,” said Rex Altree, SafePro Auto Glass president, when referring to new assignment of benefits (AOB) legislation.
Altree is also the president of the Arizona Auto Glass Association (AAGA) which recently sent out a notice to encourage auto glass shop owners in the state to “vote no on House Bill 2441.” The bill, which was introduced at the end of January, aims to alter the way auto glass shop owners obtain AOB from insureds.
“Our lobbyist said that any body who mistakenly doesn’t follow the strict and onerous provisions, which require us to jump through several hoops, will not be able to get a valid assignment,” said Altree.
According to HB 2441, assignment agreements must contain all of the following provisions in at least 12-point font:
- “Whether the insured remains liable for any costs that are not covered by the insurance policy;
- The interest rate, if any, that the assignee will charge the insured if the insured delays for more than thirty days payment to the assignee after receiving payment from the insurer;
- That the assignment agreement does not require the insured to indemnify the assignee against any claims arising out of the services or repairs that the assignee provides; and
- Whether the assignment authorizes the assignee to sue the insurer on the insured’s behalf.”
“If you don’t get an assignment, the invoice is paid to the customer, which causes problems for the shops,” said Altree.
The new legislation also states if the assignment agreement authorizes the assignee to sue the insurer, the assignment agreement must include the following notice in capital letters in at least 14-point type.
“You are agreeing to give up certain rights you have under your insurance policy to a third party, which may result in litigation against your insurer. Please read and understand this document before signing it. You have the right to cancel this agreement without penalty within 14 days after the date this agreement is executed. However, you may be obligated for payment for any contracted work performed before the agreement is rescinded. This agreement does not change your obligation to perform the duties required under your insurance policy,” a portion of the bill reads.
“If this passes, at the end of the day, the customer has fourteen days to resend the assignment that they signed. Then we would have to collect the money from the customers,” Altree said.
According to Altree, if it were to pass all of the smaller auto glass businesses would be impacted.
“This bill is bad for premium-paying insurance customers and worse for the local, family owned businesses that do repairs on vehicles and homes, through insurance. The only industry that this bill would help is property and casualty insurance corporations,” a portion of AAGA’s notice reads.
To view HB 2441’s complete text, click here.