Hartford, Conn. – The Property Casualty Insurers Association of America (PCI) is urging Connecticut lawmakers to reject legislation (SB 288) that would prevent consumers from learning about the full range of their auto body repair options, increase repair costs and, ultimately, force motorists to pay higher premiums.
The Joint Committee on Transportation held a public hearing on SB 288, which addresses a consumer’s right to choose a motor vehicle repairer, and requires insurers to pay the usual and customary hourly rate that the general public in the same geographic area of the state commonly pays for such repairs. PCI submitted written testimony in opposition to the bill.
Under current law, insurers and appraisers are prohibited from requiring that auto repairs be made at a specified repair facility. SB 288 would extend this prohibition to include requesting or recommending a particular repair shop to consumers. The bill defines the terms: "recommend, request or require," as “any act to influence a consumer's decision” to choose a repair facility.
Another section of the bill would increase repair costs for insurers, and premium costs for consumers, by requiring that labor rates paid by insurers be the "usual and customary rate" defined as the “rate that the general public commonly pays for similar repairs on similar motor vehicles in the same geographic area of the state.”
“This raises many questions regarding how the rate would be determined,” says Paul Magaril, regional manager and counsel for PCI. “Rather than having repair costs based on the labor rates negotiated directly by repair shops and insurers throughout the state, body shops would be granted the ability to define the labor rates themselves. The forces of competition currently determine labor rates in Connecticut, and they already are the fifth highest in the country. The type of price fixing permitted under this bill would benefit repair shops at the detriment of consumers. The bill unnecessarily interferes with the competitive free market by allowing costs to be set artificially. No objective data has been offered to justify such an intrusion.”
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