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Friday, 15 April 2016 18:37

Industry Voices Concern Over Massachusetts Auto Policy Filed by AIB

A standard auto policy was recently withdrawn by the Automobile Insurance Bureau (AIB) of Massachusetts soon after it was filed due to pressure from two state associations, according to industry reports. 

Sources said that the Alliance of Automotive Service Providers of Massachusetts (AASP/MA) and the Statewide Towing Association of Massachusetts (STA) had concerns over issues such as labor rates, towing and storage, damage to someone else’s vehicle and bodily injury. 

The AIB has since filed a new policy that will be reviewed by the Rating Bureau and the Department of Insurance. Autobody News contacted the AIB and learned that the policy will become public record once the division accepts it for filing. Companies will then have the opportunity to adopt some or all of the new policy. 

According to industry reports, both the AASP/MA and STA have been working together to stay informed throughout this process on behalf of their memberships and consumers. In addition, the sources cited a news release that stated, “AASP/MA and STA will remain vigilant during this review process and will take every appropriate opportunity to weigh in on the policy.” 

The auto policy has not been updated since 2008. Many in the industry have voiced concerns over the new proposed policy.

In regards to labor rates, the language to the collision, limited collision and comprehensive sections were changed. The document stated, “The cost to repair the auto is the competitive price, which we secure from a licensed repair facility under our direct payment plan.” 

The implication, according to various reports, is that the insurer will calculate the rate based on its referral shop program. An article in Repairer Driven News included information about an AASP-MA news release that stated, “While consumers assume the actual cost to repair their vehicle will be covered at the time of an accident, this language change leaves consumers having to pay the difference between the actual labor rate and the rate of reimbursement.” 

The proposed document also clarified what would be paid for towing, recovery and storage. “The amount we will pay for towing, recovery and storage of your auto will be limited to the amounts, including all fees, established by the law or by regulation of the Massachusetts Department of Public Utilities for the removal of motor vehicles by policy order or from private property.” 

It further stated, “We will not pay for any liability assumed under any contract or agreement.” 

The policy also included new language that addressed damage to someone else’s property. The following sentence was added: “The amount we will pay does not include compensation for damage to your auto or towing or recovery of your auto or any decreased value or intangible loss claimed to result from the property damage.” 

Industry reports said that, “This change will leave motor vehicle owners responsible for all costs associated with removal of their vehicle and restoration of the property to pre-accident condition.”

New language was also added in regards to bodily injury. “We will not pay for punitive or exemplary damages,” the proposed policy said. This could potentially have adverse implications for drivers who have caused accidents as well as those who were injured. 

Autobody News reached out to AASP/MA in regards to the auto policy and was told that legislative priorities could not be shared at this time.

Look for further updates about the auto policy document in Autobody News magazine.

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