This year’s legislative sessions are bringing a number of proposed laws that could affect AGSC member companies. Illinois, South Carolina, Virginia and Washington have all introduced new bills regulating automotive glass repair and replacement and insurance practices.
Illinois
Representative Thaddeus Jones introduced the “Motor Vehicle Glass Repair Act” on Jan. 12. The bill closely follows the National Council of Insurance Legislators’ (NCOIL) model legislation and shares the same title.
Illinois recently introduced a bill seemingly based on NCOIL’s model legislation.As written, the bill would prohibit insureds from transferring duties, rights or benefits under their insurance policies. It also bans auto glass shops from offering a “rebate, gift, gift card, cash, coupon, fee, prize, bonus, payment, incentive, inducement or any other thing of value” to insureds or insurance producers in exchange for filing an auto glass claim. One controversial provision is that companies would be required to have an insurance claim number or referral before officially “contracting” with a customer.
The bill includes detailed Advanced Driver Assistance Systems (ADAS) requirements. Businesses would have to inform customers:
- Whether their vehicle is equipped with ADAS, whether recalibration is required after repair or replacement “as recommended by the vehicle manufacturer”;
- Whether the shop intends to perform the recalibration itself; and
- That their vehicle must be taken to “the vehicle manufacturer’s certified dealership or a qualified specialist capable of performing the calibration or recalibration” if the shop cannot or will not do so.
Glass businesses would also be required to disclose whether the recalibration was successful after its completion.
If enacted, Illinois glass companies would be required to provide a “good faith estimate” and could not charge more than “reasonable and customary fees and costs” for glass repair, replacement or recalibration.
The bill also outlines a broad list of prohibited practices, including submitting false, misleading or incomplete documentation or information, misrepresenting pricing or coverage approval, instructing customers to provide false information, damaging a vehicle to increase the scope of work, performing work beyond what is clearly and substantially necessary, or otherwise engaging in conduct that “constitutes fraud or misrepresentation.” If a company engages in a “regular and consistent pattern” of activity prohibited by the bill, it would be assumed to be knowingly violating it.
While the bill preserves a customer’s right to choose a repair shop, it allows insurers or their representatives to “recommend” a repair company.
The bill was referred to the House Rules Committee on Jan. 14.
Virginia
Virginia State Representative Karen Robins Carnegie pre-filed HB 312 with the state legislature on Jan. 9. The bill aims to update a current Virginia law broadly regulating business and insurance practices to include specific auto glass provisions.
Virginia also introduced a bill based on the NCOIL model.HB 312 follows the NCOIL model and contains all the same regulations as the Illinois bill, including requiring shops to obtain a claim number before providing service.
Washington
There are two new auto glass-related bills in Washington state. Senator Adrian Cortes introduced SB 5871 on Dec. 12, and Representatives Tom Dent and Adam Bernbaum introduced HB 2109 on Dec. 8.
SB 5871 follows the NCOIL model and largely mirrors the regulations in the Illinois and Virginia bills. It adds that any insurers or TPAs that own an auto glass repair shop, “in whole or in part,” must verbally inform claimants that the TPA “is an entity separate from the insurer that has a financial arrangement to process [auto glass claims] on the insurer’s behalf.”
Washington recently introduced two bills pertaining to auto glass.The bill requires Washington auto glass repair facilities owned by an insurer or TPA to post a notice in all capital letters, saying:
“This motor vehicle glass repair shop is owned in whole or in part by (name of insurer or insurer’s TPA). You are hereby notified that you are entitled under Washington law to seek repairs at any motor vehicle glass repair shop of your choice.”
HB 2109 pertains to highway safety and contains a section about fallen glass.
“Any person operating a vehicle from which any glass or objects have fallen or escaped, which would constitute an obstruction or injure a vehicle or otherwise endanger travel upon such public highway shall immediately cause the public highway to be cleaned of all such glass or objects and shall pay [for] any costs,” the bill says.
South Carolina
State Senator Russell Ott sponsored S. 767, introduced Jan. 13, which would strictly regulate auto glass insurance practices in South Carolina.
The bill would prohibit insurers and “third-party administrators (TPAs)” from requiring insureds to choose a “particular facility, whether directly or indirectly affiliated” with the insurer or TPA. When a claim is filed, insurers or TPAs would be required to “clearly disclose”:
- The insured’s right to choose any licensed repair facility;
- Whether “the entity handling the claim is a TPA and not the insurer”; and
- Whether any recommended facility has “any ownership or financial affiliation” with the insurer or TPA.
South Carolina introduced a bill regulating auto glass insurance practices.After verifying coverage and evaluating damage, insurers or TPAs would have to ask whether the insured has a shop of choice and would be prohibited from “misrepresenting” that choosing a non-network shop could result in “claim delays, reduced coverage or loss of warranty.” Any list of shops provided would be required to include “all known independent repair facilities” in the service area and could not prioritize affiliated shops through “scripts, automated call handling or electronic systems.”
- 767 would require insurers and TPAs to reimburse glass claims based on “prevailing competitive market rates” rather than insurer- or TPA-set rates, even when a non-network shop is selected. Reimbursement would be based factors like independent surveys of prices charged by a “representative range” of shops and other assessments of “local market conditions.”
The bill allows insurers to “disclose the scope of any warranty or guarantee,” but not in a way that discourages non-network shop selection. The bill also requires warranty questions to be directed to the chosen repair facility.
The bill restricts certain shop practices, too. It prohibits shops from forcing or “engaging in unfair or deceptive practices” to induce claims, causing an insured to file a claim without sufficient damage, advertising windshield replacement as “free,” filing claims on behalf of insureds or performing insured work without insurer approval.
The bill requires that no “person, business or facility” may perform auto glass repair, replacement or ADAS recalibration for insurance reimbursement unless the facility is accredited under nationally recognized safety standards. Violations would result in misdemeanor charges, escalating fines and potential civil liability. The bill also directs the Department of Insurance to create an audit program and establish an “Automobile Glass Enforcement Fund” supported by annual compliance fees paid by insurers and TPAs.