Conn. AG Bill Targets Steering Customers to Select Body Shops

Connecticut Attorney General Richard Blumenthal has drafted legislation that he says would strengthen the state’s anti-steering law prohibiting insurers from forcing consumers to use a preferred auto repair shop as a condition of paying for the repair.

Blumenthal announced the legislation with leaders of the Auto Body Association of Connecticut who say steering by insurers – stifling fair competition – remains rampant in the industry.

According to Blumenthal, insurers now use various methods to “skirt” the anti-steering law, “including providing consumers with a preferred list of repairers, intimating that other repairers may not guarantee their work, may charge consumers for some of the repairs or may not complete the repairs in a timely fashion.”

He said some insurers provide for a reduced deductible if the consumer chooses a preferred facility.

Blumenthal’s proposal, modeled after a Rhode Island law, would bolster the state’s ability to enforce anti-steering violations, which is considered an unfair or deceptive insurance practice.

It would also expand the conditions in which regulators could enforce the law. Currently, insurers are prohibited from “requiring” that consumers repair their vehicle at a specific shop. Blumenthal’s proposal would expand the prohibition to prevent insurers from using subtle coercion to steer consumers.

“The bottom line: consumers deserve to choose where their car is repaired,” Blumenthal said. “No insurer should straightjacket consumers, forcing them to use a ‘preferred’ shop. This law is intended to preserve consumer choice and industry competition – deterring anticompetitive relationships between certain insurers and auto repairers.”

Blumenthal’s proposal requires insurers to pay the reasonable and customary hourly rate that a consumer would typically pay for the repair – to the shop of the consumers’ choice.

Under the proposal, appraisers would have to include the following explicit and conspicuous boldface notice to inform consumers of their rights:

PURSUANT TO CONNECTICUT LAW, THE CONSUMER HAS A RIGHT TO CHOOSE THE REPAIR FACILITY TO COMPLETE REPAIRS TO A MOTOR VEHICLE; AND AN INSURANCE COMPANY MAY NOT INTERFERE WITH THE CONSUMER’S CHOICE OF REPAIRER.

Source: Conn. Attorney General