Tuesday, 21 April 2009 13:45

Anti Tied Shop Legislation Passes Nevada Assembly

Michael Spears, of Collision Authority in Nevada, reports that AB297 passed the Assembly on April 21 and now heads to the Nevada Senate. The vote was 31 yea, 10 Nay, 1 Not Voting. Spears credits an active collision repairer campaign to educate and solicit support from the Assembly.

This bill will prevent insurer ownership of auto body shops while allowing for language to regulate the one shop owned by Allstate Insurance in Las Vegas to be grandfathered in. This bill permits that one shop to continue to operate, so no one will put out of a job.  Its references to favored facility agreements only apply to an insurer who owns a body shop. This language is to prevent them from having an unfair advantage over any of the non-owned shops that participate in that insurers direct repair program. It is not meant in any way to regulate an insurer’s program who does not own a body shop and nothing in the bill should be construed as such.

The phrase “tied body shop” has caused some discussion, but is clearly defined as a body shop that is owned by an insurance company (of which there will be only one in Nevada under the name of Sterling Autobody).

Sterling Autobody Centers is owned and operated by Allstate Insurance since 2001, though Allstate states they are only affiliated with Sterling. Even their repair order authorizations only list the affiliation. Affiliation does not clarify ownership, if that was the case then my affiliation with the many auto dealers and insurance companies I do business with would mean that Collision Authority is owned by those affiliations, not the case of course. I think their choice in that word merely demonstrates how they go about trying to manipulate the consumer and others for that matter. To support this statement of owned and operated one merely only needs to go Allstate’s media release website. There it states that Michael Roche is senior vice president of claims for Allstate and also CEO of Sterling Autobody. Here is the link: http://media.allstate.com/categories/26/releases/4036

This bill helps to prevent unfair competition while giving the consumer the benefit of unbiased expertise and opinions of the dealer and independent owned body shops.

1.       To preserve Consumer freedom of choice (if insurers own shops, the other choices can’t survive)

2.       To prevent unfair competition

3.       To continue to give consumers the benefit of the unbiased expertise and opinions of auto dealer and independent owned body shops.

4.        It is an Unfair trade practice for insurers to compete in an industry where they pay well over 90% of the payments made to our industry. They should not control both ends of a product (their insurance policy to the customer and repair business of that same customer’s auto).

5.       Not passing this bill will lead to more insurer steering (pressuring of consumers to choose only their shop)

6.       It would be a very predatory practice to allow them to compete, as auto dealer and independent shops cannot and will not have a level playing field or even equal opportunity for the consumer.

7.       If insurers eliminate the dealer and independent shops there would be no competition or protection for the consumer on higher prices and lower quality repairs.

8.       5th Federal Circuit of Appeals has determined that insurer owned shops have an unfair competitive advantage, cause an inherent conflict of interest and can be legally banned by state law.

9.

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