A proposed bill in Minnesota, House File 2690 (HF 2690), seeks to amend Minnesota Statutes 2012, section 72B.092, subdivision 1 to include more stringent prohibitions against insurance company requirements placed upon repair facilities. Introduced by representatives Joe Atkins, Greg Davids, Joe Hoppe, Debra Hilstrom, Jim Davnie, and Melissa Hortman on March 3, 2014, HF 2690 changes two subsections of the existing law, including provisions the repair industry supported and were added into the law in 2007.
The first amendment adds a prohibition against insurance companies and their representatives from requiring that a vehicle be presented “… at a particular motor vehicle repair shop designated by the insurer” in addition to the existing ban against drive-in claim centers.
According to Judell Anderson, executive director of Alliance of Automotive Service Providers, Minnesota (AASP-MN), whose organization supports the bill, this amendment seeks to expand the existing prohibition on requiring that vehicle owners present their cars at a drive-in because insurers have adapted to the existing prohibition by requiring vehicle owners to take their vehicles to a specific repair facility for inspection.
“We’ve heard from our members that insurance companies now tell people to go to a specific repair facility to get their vehicle inspected,” said Anderson. “In many cases, the insurer will actually have staff onsite at the body shop one or two days a week, essentially running a drive-in claim center in the repair facility. This section is really about combating insurance company steering.”
The second amendment adds a section to the existing law that expands upon the types of requirements that insurance companies may not place upon repair facilities. The added section states that insurance company representatives shall not specify or require any motor vehicle repair shop to use specific vendors, distributors, manufacturers, suppliers, business platforms, or internal processes to carry out vehicle repairs for an insured or claimant. This expands upon another subsection that was added into the existing law in 2007 that says insurance company representative shall not specify the use of a particular vendor for the procurement of parts or other materials necessary for the satisfactory repair of the vehicle. This clause does not require the insurer to pay more than a reasonable market price for parts of like kind and quality in adjusting a claim
In October 2013, AASP-MN filed a formal complaint with the Minnesota Department of Commerce requesting administrative and/or legal action to prevent State Farm from requiring that collision repair shops that participate in the State Farm direct repair program use the PartsTrader parts procurement system based upon the existing section of the law.
According to Anderson, the addition of the new section should help address numerous concerns AASP-MN members have with increasing insurance company requirements for specific vendors and business processes beyond the existing law that prohibits that activity for parts and materials.