The Connecticut House of Representatives approved a bill (Substitute House Bill No. 5072) on May 7 designed to extend a ban on steering by auto physical damages appraisers or third-party insurance administrators (TPAs) to specific repair shops, including auto glass repair and replacement companies.
This bill requires initial communications between a glass claims representative or a third-party claims administrator of an insurance company doing business in Connecticut and the company's insured about automotive glass works or products to inform the insured about his or her right to choose where to have the work done.
It extends a ban on steering by automobile physical damage appraisers. By law, they cannot require or prohibit automotive appraisals or repairs to be performed in or by a specified facility or repair shop. The bill extends this prohibition to glass work performed by a glass shop.
The bill bars insurance companies or their representatives from steering an insured to a licensed glass shop owned by the company, claims administrator, or their parent company, unless they provide the insured with the name of at least one other shop in the area where the glass work is to be performed. Steering occurs when the claims representative or administrator gives the name of, or directs an insured to, a particular glass shop, or schedules an appointment with it for the insured. The ban applies to insurance companies and their claims representatives and third-party claims administrators.
It also bars insurance companies or their representatives from (1) specifying who an insured uses for automotive glass work or (2) stating that glass work will either be delayed or not guaranteed unless performed by a glass shop participating in an insurance company-established glass work program. Current law bars similar activities with respect to glass replacement, repair services, or products. The bans apply to insurance companies and their third-party claims administrators, agents, and adjusters.
Moreover, the House-approved bill says, "If there is any communication between a glass claims representative for an insurance company doing business in this state or a third-party claims administrator for such a company and an insured regarding automotive glass work or automobile glass products, in the initial contact with the insured, such representative or claims administrator shall state or disclose to the insured in a statement substantially similar to the following: 'You have the right to choose a licensed glass shop where the damage to your motor vehicle will be repaired. If you have a preference, please let us know,'" the language reads.
“You can’t tell an individual... to have their automobile glass replaced at a particular shop. Kind of what we do when it comes to auto body work,” Rep. Robert Megna, the co-chairman of the legislature’s insurance and real estate committee, told his colleagues on the House floor. ”It’s a small thing. The installation is essentially the same. However, there are many small businesses – competitively priced – that can undertake the work. You have these small businesses that are disappearing. … What this does is help out those small businesses from disappearing. … Many of them are disappearing by this behavior.”
Megna said that 20 small businesses had testified in front of the insurance committee on House Bill 5072, and that three of the benefits of the bill were to ”provide consumers with choice, keep an insurer from having an unfair advantage and keep these small businesses in business.” He added, “This is the evolution of an existing statute.”
Media sources have reported that there are 34 small, independent auto glass shops in Connecticut that replace auto glass, which is down from about 70 about 15 years ago. The bill will take effect Jan. 1, 2014.