Report: Auto Insurance Industry to Battle New Repair Laws

Silver car driving by field

A batch of new proposed laws at various levels of government is being strongly opposed by auto insurance companies, according to a report from Insurance Networking News.

The author writes that car insurers are concerned about two types of proposed legislation: bills that would prohibit insurers from operating direct repair programs (DRP) and measures that would require parts used in repairs to come from the original manufacturer of a given vehicle.

The National Association of Mutual Insurance Companies released a paper written by University of Arkansas professor Lawrence Powell at its recent convention in San Diego that discusses such legislative issues.

According to the news source, the report asserts that the groups behind such efforts are primarily those with economic interest in doing away with DRPs, including independent repair facilities and makers of OEM parts. The news outlet also reports that Powell posits that claims of infringement on consumer choice and safety issues “do not withstand scrutiny.”

He also argues that a ban on aftermarket parts would impose much higher costs on both insurers and consumers, making cheap auto insurance tougher to find and failing to appreciably improve consumer safety.

Proponents of such laws argue just the opposite, saying that DRPs amount to an anticompetitive business practice by granting some shops an insurer’s seal of approval while denying it to others.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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