Tuesday, 03 June 2014 00:00

Ohio Anti-Steering Legislation Scheduled for First Hearing Before Committee

On April 28, 2014, the Ohio House of Representatives Insurance Committee held its first hearing on House Bill 526 (HB 526) that seeks to prohibit insurers from requiring a vehicle be repaired by a specific repair facility, or make a recommendation without first being asked for one by the consumer.

The bill, sponsored by Representatives Matt Lynch (primary) and Robert Hagan (cosponsor) has been placed on the agenda of the Insurance Committee for its first hearing before the committee. House Rules require the sponsor of a bill or resolution to appear at least once before the committee considering the bill or resolution unless he or she has been excused from appearing by the committee chairperson or the Speaker of the House.

 

Lynch reportedly was inspired to introduce the legislation after hearing from an auto body repair shop owner in his district. The repair shop was dropped from an insurer’s list of “preferred providers” after telling his customers that they have “the right to request the companies pay for factory parts,” according to a local report.

“He got kicked off the [DRP] list because he’s being honest to his customers,” Lynch said, according to the report. “With this bill, there won’t be any preferred lists and the policy has to clearly state one way or another whether you get these aftermarket parts of factory-approved parts.”

HB 526 would enact Section 3937.381 of the Ohio Revised Code as follows:

  • No insurer shall require a claimant on an automobile insurance policy to have the claimant’s vehicle repaired at a particular repair shop or by a particular person.
  • No insurer shall recommend or suggest that repairs of the claimant’s vehicle be completed at a particular repair shop or by a particular person unless the claimant requests such a recommendation or suggestion.
  • A violation of this section is an unfair and deceptive act or practice in the business of insurance under sections 3901.19 to 3901.26 of the Revised Code.

The legislation is similar to measures enacted in a few other states that prohibit insurance companies from requiring repairs be made a specific collision repair shop, while providing them with the ability to make a recommendation to a customer that would like one from the insurer. Missing, however, is a common requirement for customer disclosure that they have a right to choose a repair facility.

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