Two bills of note to collision repairers were scheduled to be heard by legislative committees in Tennessee and Minnesota Wednesday.
One is likely to inspire outrage from the industry, the other support.
The Tennessee bill allows non-original equipment parts to be installed in new cars after a crash, but the Minnesota bill would ban even more auto insurer practices with regards to the collision claim process.
First, the good news:
SF 135, sponsored by Democratic state Sens. Barbara Goodwin, Ronald Latz, and James Metzen and Republican state Sens. Karin Housely and John Pederson, would ban an insurer from making the driver get a car inspected or have a loss adjustment done at a particular shop or shop network. That language would be tacked onto a rule banning that action using “drive-in” centers (Think a Jiffy Lube for insurance estimates.) or anywhere controlled by the insurer.
It also would prevent insurers from forcing a body shop to use “specific products, vendors, distributors, manufacturers, or suppliers” during a repair covered by a policy. An insurer also couldn’t force a shop to use the pricing deals the insurer has in place with distributors, manufacturers, or suppliers under the law.
The Alliance of Automotive Service Providers-Minnesota helped develop the bill.
“This legislation would provide a much-needed correction to the imbalance of power that currently exists between insurers and collision repair shops,” the organization wrote in a recent email. “AASP-MN believes that independent businesses should have the ability to freely choose the products they use and the suppliers they do business with – without undue influence or mandates imposed by market-dominant insurers.”
The Senate Commerce Committee was scheduled to hear the bill at noon in Room 112.
Repairer Driven News wrote about the bill back in January. Read more analysis here.
Be heard: Minnesota legislator contact information can be found here.
House Bill 110, which has companion Senate Bill 65, was to be heard at a noon meeting of the House Insurance and Banking Subcommittee.
HB 110 writes some of the state Commerce Department’s policies into law and discard others. It drops the state Commerce Department’s ban on non-original equipment manufacturer “crash parts” for the current and prior model years and the agency’s requirement an insurer tell a claimant they’re using the parts.
However, it keeps the mandate that an aftermarket brand or logo exist on the part and be visible “whenever practicable.” It also continues to include notification, in 10-point or larger letters, of which non-OEM parts were used in a repair.
That seems like kind of a raw deal for consumers — your car is less than two years old, and you’re already getting non-OEM parts?
The legislative Fiscal Review Committee makes a few interesting analyses about the bill that collision repairers might want to contest.
- “This legislation is unlikely to have a significant effect on the number of non-OEM aftermarket crash parts purchased in the state.”
- “Any increase in business expenses incurred by any domiciled insurer, repair facility, or installer in identifying all non-OEM aftermarket crash parts used in the repair of an insured’s vehicle is assumed to be not significant.”
- “Any increase in business expenses incurred by either domiciled non-OEM parts manufacturers or collision repair shops in affixing a logo to such parts will not be significant, as any such increase in expenses by the business will be passed down to the customer in the form an increase in the cost of non-OEM parts. The net increase to business expenses is unknown, but is reasonably assumed to be not significant.”
The first one is controversial for obvious reasons. The second, particularly when placed next to the common-sense third hypothesis, begs the question of why anyone other than the part manufacturer would be expected to do anything with the labeling, unless an insurer or customer opts for unlabeled parts and expects the shop to slap decals on everything.
Be heard: Tennessee legislator contact information can be found here.