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Getting state insurance commissioners to act

Monday, October 30, 2017 - 07:00
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If you can’t get your state insurance commissioner to listen to you, maybe you can get them to listen to their colleagues.

Collision repair shops and associations often express frustration in trying to work with their state insurance regulators on issues related to steering, use of non-OEM parts or other insurance claims practices they consider unfair or illegal. But an increasing body of anecdotal evidence suggests one successful approach collision repairers may want to try: Point to actions taken by insurance commissioners in other states.

One example: In 2015, Montana’s insurance commissioner released a video public service announcement reminding motorists that by law they can have their vehicle repaired at the shop of their choice, and that insurers are required to pay the claim properly no matter where the car is repaired.

Part of what prompted that action in Montana: A nearly-identically scripted video released just four months earlier by the Oklahoma insurance commissioner.

Those videos were discussed earlier this year when a representative of the Pennsylvania Insurance Department spoke at a Collision Industry Conference (CIC) held in that state. In his presentation, David Buono, a consumer liaison for that agency, said steering of consumers to insurers’ preferred shops is “one of the things we do hear about,” and that his department offers a guide on consumer shop choice. Buono said he thinks it’s unlikely that insurers are directly forcing someone to take their car to a particular shop.

“What I worry about is…where a person says, ‘You know Bob’s Body Shop just takes a long time. But we can get you in this shop right away’,” Buono said. “That’s steering. So we want to make sure those types of conversations aren’t happening. The choice is up to the owner.”

During a question-and-answer session that followed, Aaron Schulenburg of the Society of Collision Repair Specialists suggested Buono review the Montana and Oklahoma videos that addressed the more subtle forms of steering.

“That’s actually a really great idea,” Buono said of such a video, saying it could be something the department could include on its Facebook page. “That’s something you could almost role-play to help consumers…understand what steering actually is.”

Another CIC attendee suggested Buono’s department review two Illinois Department of Insurance consumer guides on what to do if filing a claim with your own insurance company, and what to do if another party’s insurance company is handling the claim. Still another attendee suggested Buono’s department require more disclosures on photo appraisals about some of the limitations of estimates prepared without seeing the vehicle directly.

“I think that is something that I could absolutely look into and take back to see if a disclaimer of that nature should be added or could be added,” Buono said. “It’s something we could talk to our legislative liaisons about to see what we could do to try to make a change.”

So if suggesting your insurance commissioner follow the lead of his or her counterpart in another state is one way to potentially get action taken in your state, what are some of the examples you can point to?

Mississippi issues consumer guide

Mississippi Attorney General Jim Hood this past spring issued a new 8-page “Consumer Guide to Insurance and Auto Body Repair,” a document developed over 10 months by his office with input from a task force consisting of insurers, repairers and the state insurance commissioner. It prominently states that consumers “have the right to select the repair facility” of their choice, and that the “cheapest estimate…does not always include all procedures and parts necessary to properly repair the vehicle.”

The guide notes that “shops with certified technicians, modern tools and technology may charge more” than shops without these items. It defines “proper repair” as one performed according to OEM repair procedures and “using OEM or OEM-equivalent parts that have been properly tested to meet the manufacturers’ specifications.”

It explains the different part types, and tells consumers they “have the right decide what type of parts are used,” but also notes that insurance policies “may only pay for used or non-OEM parts when those parts would properly repair the vehicle.”

Mississippi shop owner John Mosley, who was part of the taskforce that offered input on the document, said that Hood and his staff “seem to understand the complexity of new-vehicle construction and the necessity for proper repairs.” Mosley, who ran unsuccessfully for state Insurance Commissioner last year, wrote on Facebook when posting a copy of the document, “The days of ‘the cheapest price is the price we pay’ have reached an end.”

Issuing memo to insurers

Sometimes a memo issued by a state insurance commissioner is all that’s needed to put insurers on notice that regulators are watching to ensure claims-related regulations are being followed.

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