Tennessee bill would require timely removal of total loss vehicles from shop propertiesBy on
Insurance | Legal
A bill introduced to the Tennessee Senate seeks to eliminate a space barrier for shops and, at least in one case, a way for insurers to prevent proper repairs under OEM procedures.
SB 0180, sponsored by Sen. Becky Massey (R-District 6), would require insurers to remove total loss vehicles from repair facility property within five business days from the date that the determination is made. If the insurer refuses to move a vehicle or doesn’t provide that service, the responsibility would fall on the policyholder.
However, if the owner doesn’t take their vehicle back by that time, the insurer then has three business days from the time the shop lets them know it’s still on site to remove it or becomes subject to the “penalties and remedies” of the Tennessee Unfair Trade Practices and
Unfair Claims Settlement Act of 2009. Violation of the act would land the responsible insurer in court to face possible enforcement of the act.
Massey told Repairer Driven News the bill is still being researched and other states’ laws looked at to determine whether to move it forward to committee for consideration.
On Jan. 13, Local Guys Collision, located in Knoxville, posted on its Facebook page that the bill is a result of their calls to every state department that deals with the automotive industry to complain about Progressive abandoning two vehicles at their shop.
“One of the cars they totaled was only because I wouldn’t perform an unsafe repair that they requested,” the post states.
Co-owner, April Manns, told RDN that now they’re left with two vehicles they can’t do much with other than ask Copart to buy them, which wouldn’t recoup the money they’ve spent on them already for disassembly and storage costs. As a result of Progressive’s decision to abandon the vehicles, Local Guys Collision no longer works on vehicles that they insure unless the policyholder pays and seeks reimbursement from their insurer.
Manns filed a complaint with the Tennessee Department of Insurance but was told there wasn’t anything they could do to help since the shop was the third party on the claims.
“It all comes down to they don’t want to pay out, they want to put aftermarket used, basically crap, parts on people’s cars,” Manns said. “People don’t… read their [insurance] policies and they really need to because most policies state that they don’t have to use OEM parts. The manufacturer’s statement on all these cars either requires it or they truly recommend it because it’s not going to function the correct way. …The big four — Allstate, State Farm, Progressive, and GEICO — it’s like fighting tooth and nail for them to pay anything.”
She said she hopes that if the bill doesn’t pass the issue will at least be brought to light.
“I’m trying to put awareness out there for people to look at their policies and then for the insurance companies to understand that they need to stop bullying collision shops like that and stop abandoning cars,” Manns said.
J. Mark Smith, president of the Tennessee Collision Repairers Association (TCRA), said he thinks the bill is bad for consumers.
“The way I read it, the insurers will be trying to deduct storage fees from the vehicle owner settlement,” he said.
As an owner of a collision center and tow business, Smith said he’s noticed insurers will “drag their feet” when looking at wrecked vehicles because most either don’t have field adjusters or don’t have enough.
“They have tried to cut their cost of doing business and put more work on body shops to do their work on estimating for free. We pay thousands of dollars per month for software from these estimate companies and they don’t want to pay us anything to do the work that adjusters once did. Now, they are trying to pass these charges that they owe to the consumer.”
If passed, the law would take effect on July 1.
Featured image: Three vehicles await repair at an autobody shop. (Credit: shaunl/iStock)