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Michigan House Passes Bill That Would Prevent Insurers' Interests in Repair Facilities

The Michigan House of Representatives recently passed a bill that would amend the state's insurer code to prohibit insurers from "develop[ing] a list of preferred repair facilities or in any other way convey[ing] to an insured information regarding which repair facility the insured should seek repairs from in the event of a claim." The bill originally was introduced in May 2007 by Rep. Barbara Farrah. (CLICK HERE for related story.)

The bill, which will now go to the state's senate for review, passed with a vote of 61 yeas and 40 neas.

If passed by the Senate and approved by the governor, the bill would require insurers to post a notice a notice in type larger than 18-point at any repair facility in which the company has an ownership interest, stating: "This repair facility is owned in whole or in part by [name of insurer]. You are hereby notified that you are entitled to seek repairs at a repair facility of your choice."

The bill would also require insurers to notify policyholders in writing at the time that they receive their policies of their interest in particular repair facilities and that the policyholder is entitled to seek repairs at a facility of his/her choice.

Finally, it would also mandate that insureds be notified verbally at the time a claim is filed of the insured's ownership in a repair facility and that the insured is entitled to seek repairs at a facility of his/her choice.

CLICK HERE for the full text of the bill as it passed the House.

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