Instead, HB1638 would allow insurance estimates to be written based on a physical inspection or on photographs taken by the consumer and submitted to the insurer. Steve Behrndt, Director of PCTG, pointed out, “It’s a simple word change, but eliminating the physical inspection means so much!”
The Pennsylvania Federation of Insurance sponsored HB1638 which was introduced to the House on October 20, and by a stroke of luck, PCTG representatives learned of this bill just two days later and entered their opposition because they feel it’s detrimental to consumers.
Behrndt noted, “We’re opposed to HB1638, and we started lobbying against it as soon as we heard about it. We asked for a public hearing but were told there was not time because the bill was on the fast track. In fact, a motion to hold public hearings by Rep Tom Murt was voted down just prior to the passage of HB 1638 which creates a genuine concern for consumers as the House would not allow industry stakeholders the opportunity to communicate their concerns.”
Behrndt continued, “We stopped it on November 6 when the bill was tabled for three weeks, but this just gave the insurance industry time to lobby, and the House felt obligated to the insurance industry to move forward, passing HB1638 on December 7. The average law takes 1-2 years, or even up to 10 years, to pass; yet, this passed through the House in just 1.5 months! It seems obvious that the government is working for special interest groups.”
After being tabled, the bill was put back into play on December 4, and supporters tried to sneak a vote through on Saturday, December 6 while key opponent Steven Barrar, R-Chester County/Delaware County, was away at a funeral, but Behrndt reached Barrer who was able to delay the vote until Monday, December 7. That day, Rep Tom Murt, R-Montgomery County/Philadelphia County, was away attending a Pearl Harbor-related event, but he drove two hours to attend the late afternoon vote at the Capitol after learning about the rescheduling for the bill.
PCTG’s urged opponents to rally against HB1638 proved futile, and in a mass email on behalf of PCTG, Behrndt noted, “We realize Monday mornings are ALWAYS hectic for small businesses, and the insurance industry realizes this too!”
Currently, no companion bill to HB1638 exists in the PA Senate, but PCTG Executive Director Ross DiBono pointed out that such bills often aren’t drafted in PA until the sister legislation clears the other chamber of the Legislature.
PCTG and other opponents of HB1638 have released documentation about the dangers of this being signed into law. The MVPDA was created to protect consumers because “safety is paramount,” Behrndt stressed, but HB1638 could create all sorts of complications and unsafe conditions.
“Car owners do not have the expertise necessary to photograph damage, especially with today’s high-tech cars. Based on a photo, an insurance company may choose to cut a check for $800 without being aware that there are $3000 or more in damages. A consumer may choose not to have their vehicle repaired because they think the damage is just cosmetic and they do not realize that there are technical aspects in need of repair that makes their vehicle unsafe. This is also going to reduce the return on their investment if they trade it in. Without a proper inspection, this process it not going to indemnify the policy holder. HB1638 offers no benefit to consumers or collision repair facilities; it only benefits the insurance companies who will be able to underpay on claims.”
Proponents of HB1638 claim that it would reduce steering and that supplements would be accepted if the collision repair facility found more damage during the repair process, but Behrndt believes photo estimates create more opportunities for insurers to practice steering. He also observed, “It’s a pretty interested claim since steering is illegal in PA anyway. Now, bill sponsors are claiming HB1638 will eliminate steering, thus admitting that steering exists when they’ve never confessed to this before. Insurers can’t require consumers to go to a specific shop for repairs, so how will this bill’s passage improve a situation that isn’t supposed to exist in the first place?!”
As far as the ability for shops to submit supplements, insurance companies have historically been adverse to this additional paperwork, and Behrndt doesn’t see that changing. Although proponents of HB1638 claim that 45 other states are satisfied with photo estimates, he has found no data to support these claims. In fact, Massachusetts repealed their photo estimate bill within a year because 90 percent of claims had to be rewritten, and the repeal was necessary “to protect the state’s motoring public from unsafe and improperly estimated vehicles,” according to the document PCTG submitted on the Myth that 45 Other State are Satisfied with Photo Estimating.
The same document also notes that "Rhode Island did not have an Appraisal Photo Law prior to 2014 when the insurance industry offered photo estimating to the public for the purpose of estimating damaged vehicles. Within a year, the state introduced legislation requiring physical inspections on vehicles with damages estimated over $2,500.00 due to inaccurate and unsafe estimating of vehicles through the use of photo estimating."
PCTG does not have the data from other states that have allow photo estimating to confirm whether they are truly satisfied as proponents of HB1638 claim, but Behrndt noted, "They don't all have physical inspection laws like Pennsylvania does, so they don't necessarily know better."
Although HB1638 will surely benefit insurance companies, it will likely be detrimental to their appraisers. Without the requirement for physical inspections, many insurance damage appraisers will not be needed and could ultimately find themselves unemployed.
Currently, PCTG is working hard with SCRS and other entities that oppose HB1638 to lobby and educate Senators on the facts and potential dangers related to HB1638. Behrndt encourages collision repair industry advocates to contact their Senators and educate them about the importance of physical damage inspections being performed by state licensed appraisers to protect consumer interests and safety.