States Enact Legislation Related to OEM Procedures, Labor Rate Studies
Written by John Yoswick, Autobody News
Published July 6, 2023
With this year’s legislative session wrapping up in many states, here’s a round-up of some the new laws impacting the collision repair industry.
Gov. Daniel McKee signed into law legislation (S 925) making it an unfair claims practice for an insurer to refuse to compensate a shop for “documented procedures identified as necessary by the original equipment manufacturer [or] paint manufacturer…when requested by the repairer.”
The new law also limits what insurers can negotiate if they fail to meet the existing state requirement to perform supplemental reviews within four business days after requested by a body shop, and adds an appraisal provision into state law, spelling out the process if a consumer and insurer fail to agree on the amount of a loss.
Rhode Island lawmakers also passed a bill (H 6027) requiring insurers covering a claim in which the insured’s vehicle is a total loss to extend rental car coverage for an additional week after the insured receives the total loss payout. That law became effective without the governor’s signature.
Gov. Greg Abbott signed into law legislation (HB 3297) eliminating that state’s vehicle safety inspections for non-commercial vehicles as of Jan. 1, 2025.
Just prior to the close of the legislative session, an amendment tacked onto a 122-page otherwise-unrelated bill (S 95) calls for the state’s commissioner of financial regulation to conduct a study of collision repair labor rates, “the use of aftermarket parts, [and] market conditions,” making a report of findings and recommendations” by November 2024.
The bill, signed into law May 31 by Gov. Phil Scott, said the study should look at labor rates in surrounding states as well, and determine whether Vermont should establish a minimum labor rate. It is to examine “the extent to which an automobile insurance company controls or influences repair work done” for customers at body shops, and the impact of direct repair programs on both shops and consumers.
Gov. Ron DeSantis in June signed into law a bill (SB 7052) that gives state regulators there greater authority to investigate insurance companies and levy heavier fines for misconduct. He also signed into law a bill (SB 1002) that prohibits a policyholder from entering into an assignment of proceeds agreement for an auto glass claim under a policy issued after July 1.
Lawmakers passed a bill (SB 256) that prohibits the manufacture, sale or installation of any counterfeit supplemental restraint system, or the installation of any part or device that prevents a vehicle from failing to warn the driver that the airbag system is not functional.
Gov. Wes Moore signed into law legislation (HB 920) that prohibits an insurer from steering a glass claim to a particular vendor, and requires those repairing or replacing glass on a vehicle equipped with ADAS to inform the customer if a recalibration is required and has been performed to meet OEM specifications.
Carrying auto insurance is no longer optional in Virginia under legislation (SB 951) signed into law by Gov. Glenn Youngkin; drivers previously could pay a $500 fee to register a vehicle without insurance, but that option is now repealed.
Both chambers of the legislature passed a bill (LD 1661) that mandates that liability insurance policies cover the costs of towing and storage of certain vehicles.
Minnesota, Arkansas and New Mexico
Minnesota Gov. Tim Walz signed into law legislation (HF 30) increasing the record-keeping requirements for scrap metal dealers purchasing a detached catalytic converter. Similarly, Arkansas Gov. Sarah Huckabee Sanders signed into law an Arkansas bill (HB 1365) aimed at curbing catalytic converter theft, as did New Mexico Gov. Michelle Lujan Grisham (SB 133).