Kentucky Anti-Steering Insurance Measure Kicks In

Kentucky legislation finalized in April went into effect earlier this week, activating several provisions in the law aimed at making commercial policyholders’ information more available to them and preventing insurers from steering business to certain repair shops for claims-related work.

HB 207 sets standards around loss run statements, which are reports compiled by insurers detailing a commercial policyholder’s claims history, requiring that Kentucky auto insurance carriers provide those account details within 20 days of receiving a written request from a policyholder or that policyholder’s agent.

Under the bill’s language, such loss run statements must contain a minimum five-year history of that policyholder’s insurance account or, if the insured has not been with the company for that period of time, as complete a background as possible.

Insurers cannot charge a fee for the report, according to the new law.

Bill Also Targets Steering Practices

In most instances after a crash, insurers present policyholders with a list of auto repair and body shops conduct claims-related work on damaged vehicles. Requiring policyholders to go to a business preferred by insurers is called “steering,” a practice that has met much recent resistance from legislators around the U.S.

However, some insurers simply offer listings of repairers to policyholders without telling them they can choose to go to body shops outside of the list, effectively steering them towards those listed businesses without flouting regulations.

HB 207 seeks to close that loophole, requiring insurers to explicitly state that consumers have a choice of which shops to go to for claims-related repairs.

Now, any appraisals for claims-related work will include the following: “Notice: Under Kentucky law, the consumer and/or lessee has the right to choose the repair facility to make repairs to his or her motor vehicle.”

Other States Push Anti-Steering Measures

Lawmakers in Rhode Island and South Carolina also passed anti-steering proposals earlier this year.

In Rhode Island, legislators sought to restrict insurance companies from steering with HB 7782, which sponsor Rep. Stephen Ucci (D-Johnston) said in an interview would “level the playing field between the insurance industry and small, locally owned body shops.”

Gov. Lincoln Chaffee ultimately vetoed the legislation in late June, spurred by an outcry from trade organizations that said the bill’s provision empowering auto repairers with the right to sue insurers over compensation disputes would lead to a surge of litigation.

In mid-June, South Carolina Gov. Nikki Haley finalized HB 4042, which restricts insurers’ steering practices in the glass repair industry. The bill called steering an “unfair trade practice.”

Unlike Rhode Island’s proposal, the South Carolina measure was strongly supported by lawmakers. But like HB 7782, HB 4042 drew opposition from trade groups like the Property Casualty Insurers Association of America (PCI), which said keeping insurers from recommending in-network glass repairers could lead to higher coverage costs for all state residents.

The Kentucky bill specifically states that its regulations are not applicable to “the replacement or repair of automobile glass.”

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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