Auto Body Association of Rhode Island Urges General Assembly to Override Governor McKee's Veto - GoLocalProv

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Wednesday, December 29, 2021

Anthony J. Victoria, President, Auto Service Auto Body

PHOTO: File

For over twenty-five years, the Auto Body Association of Rhode Island has advocated on behalf of consumers. We are proud to support the Unfair Claims Practices Act (H6324 and S870) which provides important protections for Rhode Island consumers. Governor McKee recognized this, but vetoed the bill based on erroneous concerns that certain provisions would add to the cost of auto insurance. Specifically, in his veto message, the Governor cited concerns that the bill would add two types of costs (“markup” and “sublet services”) that insurers would be required to pay when repairing a vehicle covered by insurance.

The Governor was mistaken about both assumptions, and if he had voiced these concerns to the Auto Body Association, we could have easily debunked these myths. The act does not add any new costs at all. Payment of industry-standard markup and sublet services have always been honored by most insurance companies. However, a small number of mostly out-of-state insurers, take their customer’s premium payments, but after an accident, they want to get away without paying for what is necessary to repair the vehicle.

These rogue insurance companies do this by either picking and choosing what necessary services they want to pay for, or by using a non-transparent insurance industry computer software to choose what they consider necessary. The bill codifies the industry practice of requiring insurance companies to be responsible for the cost of a customer’s repairs as outlined in automotive industry software programs such as Mitchells, RMC, PMC Logic, or in the case of paint, a paint manufacturer’s program, in their entirety.

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The software programs used by the automotive industry are readily available to all parties, whereas the insurance industry programs are not. Insurance companies use automotive industry valuations to set rates they charge consumers. They should not be allowed to select a less expensive rate from non-transparent insurance industry valuations to pay a claim. This is inherently unfair to the consumer.

Repairing automobiles is increasingly complex and specialty services are sometimes needed in the overall repair process. This is where sublet services come in. Auto body shops spend their own money to pay vendors for specialty services such as towing, suspension alignments, electronic calibrations, and mechanical work. In addition, the shops hire staff and spend resources to research, coordinate and administer these services. Again, most insurers reimburse the shops for necessary sublet service and an industry-standard markup. The act codifies this practice and makes these responsibilities between the parties clear.

We transact with many good insurance companies that understand that it is important to follow proper procedures for repairs that are recommended by the vehicle manufacturers. These companies have always fairly compensated the shops for necessary services, including markup and sublet services. Those rogue, outlier insurance companies should be following these same standards.

Lastly, the act extends further protections to consumers where an insurer deems a vehicle a total loss. Vehicle owners are not always aware they may have a responsibility to dispose of the vehicle, or the cost of doing so. The act protects consumers by requiring insurers to obtain the owner’s consent and acknowledgment of the additional costs they could incur.

The Unfair Claims Practices Act levels the playing field somewhat for small family-owned businesses that fight against giant insurance companies on behalf of their customers. Consumers need to have their cars repaired in a prompt manner. Payment disputes caused by a lack of transparency slow the repair process. The General Assembly passed the act overwhelmingly, and we hope that the Assembly will enact it into law by voting to override the Governor’s veto.

Anthony J. Victoria is the President of Auto Service Auto Body and a member of the Board of Directors of the Auto Body Association of Rhode Island.