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Ark. Insurance Comm. McClain reminds consumers they can pick any body shop

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Arkansas Insurance Commissioner Alan McClain on Thursday reminded residents they could select any body shop they wished to repair their vehicles.

“Consumers should know that insurers cannot require a claimant to have an automobile repaired at a specific repair shop,” McClain said in a statement. “If an insurer inaccurately informs you that your vehicle’s coverage is contingent upon utilizing a  particular preferred vendor, they are in violation of the law and will be subject to penalties.”

Insurers can give the claimant a list of body shops, but consumers are free to ignore it, according to the Arkansas Insurance Department.

“Arkansas consumers maintain the freedom to choose the repair shop to which they take their vehicle,” the agency wrote in a news release.

Arkansas Code 23-66-206(13) defines “Requiring as a condition of payment of a claim that repairs must be made by a particular contractor, supplier, or repair shop” among its “Unfair claims settlement practices.”

However, the state lists a threshold of “committing or performing with such frequency as to indicate a general business practice” before such steering would be considered an unfair claims practice.

The Arkansas Insurance Department’s Rule 43 reiterates the state’s position.

“Insurers shall not require a claimant to travel an unreasonable distance to inspect a replacement automobile, to obtain a repair estimate, or to have the automobile repaired at a specific repair shop,” the document states. “Insurers shall not require a claimant to have the automobile repaired at a specific repair shop as a condition of recovery.

Customers can file a complaint about such steering here, and repairers might wish to encourage consumers to do so. Shops can also file their own complaints, the agency confirmed Monday.

The language that an insurer must have done something wrong with enough “frequency to indicate a general business practice” suggests that the agency might have to hear multiple examples of steering before it’s able to take action. So even if no action is taken on one’s individual grievance, it still provides the agency another data point to study for patterns.

A spokeswoman for the agency said “nothing in particular” led to McClain’s reminder last week.

“We’ve received questions regarding the subject from consumers recently and decided that providing clarifying information to the public might be helpful,” Arkansas Insurance Department public information officer Jennifer Bruce wrote in an email Monday.

More information:

“CONSUMER ALERT: Unfair Claims Settlement Practices”

Arkansas Insurance Department, June 3, 2021

Featured image: Arkansas Insurance Commissioner Alan McClain. (Provided by Arkansas Insurance Department)

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