Tuesday, 20 July 2021 22:59

American Property Casualty Insurance Association Applauds Veto of RI Auto Body Bills

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The American Property Casualty Insurance Association issued the following news release.

Rhode Island Gov. Daniel McKee on July 16 vetoed S.870/H.6324, auto body legislation, that was opposed by the American Property Casualty Insurance Association (APCIA).


McKee said in his veto letter that "overall the legislation will add costs without adding commensurate benefits to consumers."


The governor also said the "legislation would add two types of costs ('markup' and 'sublet services') that insurers would be required to pay to auto body shops when repairing a vehicle covered by insurance. Neither of these terms are defined and there are no clear limitations of when those costs might be appropriate."


APCIA's Frank O'Brien, vice president of state government relations, thanked McKee for the veto of S-870/ H-6324, that would allow the auto body industry to charge an undefined industry standard markup.


"The legislation would likely increase repair costs and put upward pressure on the cost of insurance. As there is no definition of or limit to the industry standard markup that body shops could charge, these additional costs could be significant and allow the auto body industry to pad their profits at the expense of Rhode Island drivers who already pay among the highest auto repair cost in the nation."


This was a rare veto for McKee, who has only used the veto pen three previous times while in office. McKee expressed concern the measures may drive costs even higher for consumers and small businesses when the focus should be on reducing costs to help the economy grow.


Source: American Property Casualty Insurance Association

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