The Indiana Senate unanimously passed a new insurance anti-steering bill in January, and the legislation is moving forward in the state’s lower chamber. However, the language of the bill has changed so dramatically that the regional autobody association that originally lobbied to have it introduced has withdrawn support.
The bill (introduced on Jan. 3 by Senator Mark Messmer) passed the Indiana Senate in January, 49 to zero. Although the bill was modified to remove some language specific to insurance carriers, it was initially still supported by the Indiana Auto Body Association (IABA).
It was referred to the House Committee on Insurance in February, which voted to adopt with some amendments which further weakened the anti-steering provisions. On Feb. 22, the association withdrew its support of these new amendments.
According to the organization’s Facebook page: “The [bill] was heard yesterday morning by the House Insurance Committee, where a last minute amendment was thrown in that we WILL NOT support. The IABA Board Members and a few others are working with Senator Messmer to see that the amended bill does not pass at it reads currently.”
We were blindsided by it,” says Doug Martin, president of the IABA. “That new amendment came up and we had knowledge of what was in it.”
The new language would prohibit vehicle owners from assigning any of their rights to the repair shop, which Martin says would limit options for the shop and vehicle owner. “In the event of a short pay, for example, the vehicle owner couldn’t assign the proceeds for anything over and above that to go to the repair facility,” Martin says. “We couldn’t act on behalf of the vehicle owner, which would allow the insurance company to do as they wish and deny things, and the vehicle owner is the only one that could try to collect on it. That puts the vehicle on their own against the insurance company.”
Other language in the amended bill would restrict legal action against the insurance company to just the vehicle owner. “They couldn’t work in a group or a class of plaintiffs,” Martin says. “A group of shop owners couldn’t work together on behalf of their customers.”
The bill goes further to declare that a repair is not defective if it is made in conformance with the vehicle manufacturer’s repair procedures or “generally accepted industry standards.”
“Who is to say what those standards are if not the vehicle manufacturer?” Martin says. “The insurance companies are the ones making up the ‘generally accepted standards’. We feel any insurer or bill payer should have to follow the manufacturer repair procedures.”
As it stands, under Senate Bill 164, insurers cannot require that repairs be made by a particular shop or contractor, and are prohibited from “unfair claim settlement practices” as defined elsewhere in the state’s code. Insurers are also in violation if they “fail to initiate and promptly conclude an investigation of a claim for motor vehicle repairs based on whether the motor vehicle repairs are made by a particular contractor or repair shop.”
Insurers also cannot arbitrarily disregard repair operations or costs identified by an estimating system.
The bill also outlines prohibits several “deceptive acts” on the part of repair shops, including coercing the vehicle owner to boycott an insurer’s drive-in claim center, or securing the insured’s signature authorizing an individual employee of the shop to act on behalf of the insured in selecting the repair shop.
Shops also can’t deny an insurance representative from accessing the vehicle during regular business hours; cannot include any provisions in their contracts assigning rights of the insured to the repair shop or a third party;
The original version of the bill included language that would have prevented insurers from adjusting shop damage appraisals without a physical inspection. An amendment that would have prohibited insurers from withholding payment for OEM-required procedures also did not make it into the final version of the bill.
Martin says the IABA will work with Senator Messmer to either further amend the bill to reflect its original intent, or prevent the current version from passing.
