Legislation would block insurers from forcing customers to 'preferred' repair shops

May 14, 2014 at 12:05a.m.

COLUMBUS

Insurers would be blocked from requiring customers to patronize “preferred shops” for repair work, under legislation being considered in the Ohio House.

HB 526 also would prohibit insurers from offering recommendations for repair shops unless a consumer requests the information and institute potential civil penalties for insurers that engage in such activities.

Rep. Bob Hagan of Youngstown, D-58th, a primary co-sponsor of the bill, said the proposed law changes seek to “protect small auto shops and result in better service for consumers in search of auto repairs.”

Rep. Matt Lynch of Bainbridge Township, R-76th, the other primary co-sponsor of the legislation, added, “This bill will prevent the potential for the policy holder to feel pressured by the insurer and allows them the flexibility to take their business to a garage or mechanic of their choice. Other states, such as Wisconsin and California, already prevent insurance providers from having policies that require holders go to pre-approved garages or mechanics, and we believe this policy should be in place here in Ohio as well.”

Hagan, an outspoken liberal member of the state legislature, and Lynch, an outspoken conservative member, generally reside on opposing sides of the political aisle.

But they’re in agreement on HB 526, telling members of the House’s Insurance Committee on Tuesday that some repair shops feel pressured to use aftermarket or salvage yard parts in an effort to complete work within insurance companies price limits.

“For new or small auto repair shops, there is significant pressure to sign agreements with insurance companies because the large insurers can steer significant amounts of work to their businesses,” Hagan said.

“Auto repair shops that choose to do right by their customers and use the costlier yet appropriate parts are more likely to be left off of insurance companies preferred lists of shops. This potentially deprives shops from business they might have otherwise received. Meanwhile, the preferred list practice is misleading for consumers, who may be under the impression that they must choose one of the preferred repair shops supplied by their insurance company.”