Kentucky House Bill May Impact Auto Glass Shops
February 28, 2013

by Casey Neeley,

Proposed Kentucky House of Representatives Bill 243 (HB243) may impact area auto glass shops. The legislature outlines a series of unlawful actions for persons selling, repairing or replacing safety equipment in vehicles.

According to HB243, "'safety equipment' shall mean only the glass used in the windshield, doors and windows, and the glass, plastic or other material used in the lights required by KRS Chapter 189 on any automobile."

Unlawful practices listed in the proposed bill include:

-Knowingly submitting a claim to an insurer or third-party administrator for safety equipment repair or replacement services if the equipment was not previously damaged to the extent that the repair or replacement warrants; for services not provided; for showing work performed in a different geographical area which results in higher payments; without owner, lessee or insured driver authorization; for showing work performed on a date different than performed which changes insurance coverage status; or making any other "material misrepresentation" related to safety equipment;

-Tell someone else, such as a policyholder or any other person to falsify the date damage occurred to the safety equipment, which results in a change of insurance coverage for a repair or replacement;

-Falsely signing a work order, insurance assignment form or other related form on behalf of a policyholder or other person to submit a claim to an insurer for a repair or replacement;

-Knowingly misrepresent to the policyholder the repair or replacement pricing billed to the insurer, insurer authorization of the repair or replacement or tell the policyholder that the repair or replacement will not increase the policyholder's premium or affect coverage;

-Tell the policyholder or other person that the policyholder's insurer will cover the entire cost of the repair or replacement with no cost to the policyholder unless coverage has been verified by the insurer or third-party administrator;

-Add to the damage of the safety equipment before repair to increase the scope of the repair or replacement or encourage the policyholder to add damage;

-Perform work beyond the scope of the repair or replacement;

-Waive or offer to waive the policyholder's deductible, in full or part, or offer rebates, gifts or anything of value to a third party in exchange for policyholder referrals to the repair or replacement facility in connection with any claim under an insurance policy, or;

-Waive or offer to wave, in full or partial, the policyholder's deductible, or offer rebates, gifts or anything of value to an insured in exchange for the insured filing a claim under an insurance policy.

-Misrepresent the relationship between a repair or replacement retailer and the policyholder's insurer;

-Repair or replacement facility may not threaten or intimidate an insured into filing a claim, engage in unfair or deceptive practices to induce a claim, induce a claim when damage is insufficient to warrant repair or replacement, perform services without insurer authorization, misrepresent coverage available to the insured and represent that coverage for the insured under the insurer is free.

Other notes in the HB243 say that violations of these practices may be enforced and they Department of Insurance Division of Insurance Fraud Investigation may "seek and obtain in an action in circuit court an injunction that prohibits a person from engaging in practices or doing any acts that violate this section."

Proposed repercussions include fines of up to $5,000 per violation.

HB243 has not yet passed in the House.

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