States eye legislation
Most of the anti-steering bills introduced around the country this year failed to gain much legislative traction.
    After about 70 representatives of the collision repair industry attended a legislative day at the Missouri Capitol this spring, for example, a hearing date was set for SB 775, a bill that would have required an insurer to halt “any efforts to re-direct, refer or otherwise influence the vehicle owner in the choice of repair facility…once the vehicle owner has stated they have chosen a repair facility.”
    Backers of the bill said that hearing provided an opportunity to educate legislators on the issue, but even the Senator who sponsored the bill acknowledged that, “the chairman of that committee tends to be more friendly to the insurance (industry) than to the collision industry.”
    Surprisingly, however, the committee voted in favor of the bill in May, but the vote came just a day before the end of the legislative session and it moved no further.
    A bill in Kansas (HB 2653) would have prohibited an insurer from using “a deceptive referral practice whereby the consumer is misled into thinking that a particular repair shop, facility, vendor or supplier must be used.” The bill, however, did not move out of committee.
    Legislation that would have prohibited insurers in Washington state from recommending a source for glass repair or replacement if an insured indicated he had chosen a facility did not make it out of committee after insurers, calling it “a gag order,” opposed it at a Senate hearing.
    A bill introduced in Alabama that would have prohibited insurers from recommending or suggesting that repairs be made by a particular shop unless a shop recommendation is specifically requested didn’t move forward in the legislature.
    California’s own “anti-steering bill” (SB 1167) changed almost on a weekly basis. As introduced, it required insurers to determine if a claimant had selected a shop prior to any discussion of repairs, and prohibited the insurer from discussing its DRP if the claimant has selected a shop.
    Insurers launched an all-out attack on the bill. California-based Mercury Insurance sent a letter to shops in March urging them to contact state lawmakers to oppose SB 1167.
    “We believe this bill represents a substantial threat to the way in which we currently do business,” the insurer wrote in the unsigned letter to shops one week ahead of a hearing on the bill.
    Three insurance associations jointly created a website (www.caautobodychoice.com) to oppose the bill; they published an opinion piece that said, “(C)laimants who have chosen a specific auto body shop without adequate information would be denied vital information about shops pre-qualified by insurance companies.”
    But even prior to an April hearing in the Assembly, the bill was amended, stripping out the prohibition on an insurer discussing a shop or program once the vehicle owner has chosen a shop. The version of the bill eventually approved calls only for formation of a task force under the insurance commissioner to look into issues arising from changes to existing California anti-steering laws and to report back to the legislature by the end of 2009.
    The only state that has passed anti-steering legislation this year is Connecticut, where Attorney General Richard Blumenthal has been a vocal supporter of strengthening limits on insurer referrals. Blumenthal endorsed legislation that said an insurer may not “recommend, request or require” that a specific shop be used.
    The bill also would have required that insurer estimates state that insurers “may not interfere with the consumer’s choice of repairer.” The bill specifically prohibited insurers from waiving deductibles or offering warranties if the consumer uses an insurer-recommended shop, and would have prohibited insurers from suggesting that use of any shop would result in delays, added costs or lack of a warranty.
    “The consumer may be under the impression that he or she has no real choice. We want to make clear: Your car, your choice,” Blumenthal said in a television news piece on the topic.