Repair Facilities: Reviewing Democrats' No-Fault Reform Bills

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This series of posts covers several of the bills presented by members of the House Democratic Caucus to reform Michigan’s No Fault statutes. The last post addressed 2 bills regarding transparency. This post will cover one very important bill that would protect your ability to use the repair facility of your choice.

Under House Bill No. 4635, originally proposed on April 30, 2013, insurance adjusters, agents, or employees are not allowed to force you to use particular repairs facilities or claim centers. It doesn’t matter whether the insurance company is connected with the facility. They can request that you produce the vehicle for inspection at their facility of choice, but they have to tell you that you are under no obligation to do so. Under the bill it would be your choice which repair facility does the estimate and the repairs.

The bill would also prevent insurance companies from holding on to your vehicle for inspection any longer than 1 business day. If they can’t get the vehicle physically inspected during that time they would be prohibited from disputing coverage.

If passed, the bill would also prevent insurance companies from dictating the use of after-market replacement parts or particular parts vendors that would affect your car’s structural integrity or airbag timing. They also wouldn’t be able to dictate a maximum cost for paint and materials, though the costs recouped would still have to be reasonable.

Most importantly, if an insurance company is found to have violated the standards laid out in the bill, it would allow you, the facility owner where the work was done, or anyone who got underpaid to file suit against the company in court, and even create class action suits. If they don’t correct their policies, insurance companies could be forced to pay triple damages and the plaintiff’s attorney fees and costs.

The effect of HB 4635 will be strong consumer protections against insurance companies that are trying to fix the bills against them. By preventing them from dictating repair facilities, parts manufacturers, and material costs, the bill would put the final say on what is necessary in the hands of mechanics and auto repair facilities, instead of the insurance companies. If you think tighter controls is a good idea, contact your state representative and tell him or her to support these bills.