Insurers Oppose Ore. Auto Repair Shop Legislation

April 13, 2005

The Property Casualty Insurers Association of America (PCI) is urging the Oregon Senate to reject legislation which would mislead consumers about a valuable program designed to provide quality repairs to accident-damaged vehicles, according to PCI Regional Vice President Sam Sorich.

Sorich noted the bill, SB 210, focuses on “preferred provider agreements” that many insurers have with auto repair businesses. The agreements, among other things, allow insurers to suggest to their customers repair shops that do quality work in an expeditious manner.

Under SB 210, the participating repair shop would be required to post a sign that is reportedly inaccurate and misleading to consumers. The sign would state that the shop has a “financial agreement with one or more insurance companies to direct business to this facility. Details of these agreements are available upon request.”

“Insurers can not and do not direct claimants to repair facilities. They can, and do, suggest shops where they know quality work will be performed. The added bonus to consumers is the repairs done by ‘preferred’ shops are guaranteed for the life of the car,” said Sorich.

As noted in the sign, SB 210 also would require participants in the program to provide a customer, upon request, with a copy of the confidential preferred provider agreement or contract.

“Providing a copy of a confidential contract would violate the non-disclosure clause in the contract, jeopardizing the privacy of the parties to the contract. It would also raise other legal issues if the customer provides the agreement or contract to a third party,” added Sorich.

The result of this requirement could be a reduction in such agreements due to the possible unwillingness of some current participants to make confidential agreements available. This would reportedly impact consumers by making fewer of these “preferred” shops available to them.

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