EAST PROVIDENCE, R.I. (WPRI) — Rhode Island lawmakers are returning to the State House Tuesday, and one of their first orders of business will be considering whether to override Gov. Dan McKee’s veto of a bill supporters say will protect car owners from auto insurers who refuse to pay legitimate claims.
The legislation would add language to the state’s existing Unfair Claims Settlement Practices Act. The revised bill would require insurers to pay “markup” and “sublet services” fees to auto body shops tasked with repairing insured vehicles.
McKee vetoed the bill last summer, arguing that it would “add costs without adding commensurate benefits to consumers.”
“Neither of these [fees] are defined and there are no clear limitations of when those costs might be appropriate,” McKee said.
Frank O’Brien, vice president of the American Property Casualty Insurers Association, tells 12 News the legislation will lead to an unnecessary cost increase that will ultimately trickle down to the consumer.
“Passing this bill will add to the costs to repair a car in Rhode Island, which will in turn impact the cost of auto insurance,” O’Brien said.
But Senate Majority Whip Maryellen Goodwin, the bill’s Senate sponsor, said the measure is designed to protect consumers “from a few unscrupulous insurers who refuse to pay legitimate claims.”
“The bill does not add any costs to insurers, and would not impact premiums. Rather, it requires that certain costs necessary to properly repair a vehicle are covered,” Goodwin said in a statement.
Stephen Alves with the Auto Body Association of Rhode Island agreed, adding that “the insurance industry’s trade group has distorted the truth to blame small family-owned auto body shops for the cost of repairs.”
“We transact with many good insurance companies that understand that it is important to follow proper procedures for repairs that are recommended by the vehicle manufacturers,” Alves said. “The act protects the consumer from those companies that do not.”
Alves explained that the three reasons why car insurance rates are high in Rhode Island is because the state has the highest percentage of uninsured drivers in the country, it’s mostly urban and it has one of the highest minimum coverage rates.
He also said Rhode Island uses residents’ personal credit scores to determine the type of insurance they quality for.
The General Assembly is scheduled to convene for this year’s legislative session Tuesday afternoon.