NU Online News Service, June 14, 3:55 p.m. EDT
Insurer associations and auto repair shops in Rhode Island are sparring over a bill passed by the legislature that would require independent appraisals on vehicles when damages are thought to exceed $2,500.
Insurance industry opponents claim the bill, SB 2508, will increase costs and lengthen repair times.
The Auto Body Association of Rhode Island (ABARI), which proposed the legislation, contends that the legislation would address shortcomings in the direct repair program (DRP) insurers use where vehicles have been incorrectly repaired.
Direct repair programs allow auto body shops and insurers to enter into contracts where the insurers refer policyholders to certain preferred body shops.
Jina Petrarca-Karampetsos, an attorney who represents ABARI, said insurers currently do not require appraisals for repair shops that participate in their DRPs. She said insurance companies send appraisers when an independent repair shop performs work, but not when a DRP shop does work.
She said there have been "numerous problems" where nonappraised work performed by a DRP shop was incomplete, leading to further damage discovered later on, and she called the recent legislation an effective consumer protection.
Frank O'Brien, vice president and Northeast regional manager for the Property and Casualty Insurers Association of America, said the legislation is designed to be an attack on the direct repair program and has been pushed by ABARI for several years.
He said the bill would result in increased costs and limited consumer choices.
Laura Kersey, American Insurance Association assistant vice president, Northeast region, said in a statement, "No other state requires this kind of appraisal, and SB 2508 would only add time and costs to a repair process that is already one of the most costly in the country."
Mr. O'Brien said extra costs would be added because having an additional appraisal will require more time. The longer a repair takes, he said, the more associated costs are incurred. He cited longer rentals of replacement vehicles as an example.
If repair costs increase, he said, that "could easily translate into higher insurance rates."
Ms. Petrarca-Karampetsos countered that auto body costs in Rhode Island have gone down, rather than up since 2006.
She also said the bill would allow for insurers to use the same staff of appraisers they send to independent body shops.
The insurers have called on Governor Donald Carcieri to veto the bill. A spokesperson for the governor said the legislation has not been transmitted or reviewed yet, and so the governor has no position on it as of now.
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