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Tuesday, 09 July 2019 20:57

New Louisiana Law Aims to Protect Policyholder Choice of Repair Shop

Written by Staff, Insurance Journal
A new law in Louisiana aims to ensure that auto insurance policyholders have the option to choose a particular motor vehicle repair shop. A new law in Louisiana aims to ensure that auto insurance policyholders have the option to choose a particular motor vehicle repair shop. Insurance Journal

A new law in Louisiana aims to ensure that auto insurance policyholders have the option to choose a particular motor vehicle repair shop.

 

Under Act 317 (House Bill 411), which has been signed by Gov. Jon Bel Edwards, insurers are prohibited from recommending specific auto repair shops unless their insureds are clearly informed that they are not required to use the recommended shop.

 

According to the Coalition Against Insurance Fraud, insurers are allowed to inform consumers about reputable repair facilities and warn against body shops suspected of committing fraud.

 

However, the bill states: “An insurer shall not engage in any act or practice of intimidation, coercion, or threat to use a specified place of business for repair and replacement services.”

 

The act provides for fines for violations of the law:

 

  • $1,000 for a first offense
  • $2,500 for a second offense within a 12-month period, $2,500
  • $5,000 for third or subsequent offense within a 12-month period

 

The act also gives the state’s insurance commissioner the power to suspend or revoke insurance licenses of violators.

 

We thank the Insurance Journal for reprint permission.

 

 

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