Insurers, body shops at odds over repair costs

By Patrick Anderson
PBN Staff Writer

Would Rhode Islanders fresh off a car accident take their vehicles to a body shop classified by the state as “B” or second-tier in equipment and training? More

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INSURANCE

Insurers, body shops at odds over repair costs

By Patrick Anderson
PBN Staff Writer

Posted 4/28/14

Would Rhode Islanders fresh off a car accident take their vehicles to a body shop classified by the state as “B” or second-tier in equipment and training?

Lawmakers are considering that and other questions this year in debate about the latest round of legislation proposed by Rhode Island’s body shops over how cars in the state are repaired.

Like two other repair-related bills filed this session, the proposal to create two categories of body shops is being fought by the insurance industry.

The lobbying grudge match between the two groups of businesses started more than a decade ago and in that time 17 laws have been passed with support of body shops working to professionalize and regulate their industry.

Insurers say the laws have driven increases in the cost of repairs and insurance premiums in Rhode Island faster than the rest of the country.

“This effort is one reason why Rhode Island is in the shape it is in today,” said Frank O’Brien on the Property Casualty Insurers Association of America, the insurance trade group that has led the counter-offensive against the body-shop bills. “You have a small cadre of business owners who are determined to protect their shops, notwithstanding unfavorable economics, and are willing to saddle the rest of state with the costs.”

The Auto Body Association of Rhode Island, a trade group representing shop owners, rejects the connection between the new laws and prices, saying the state’s insurance costs have always been high because of the number of people and cars packed between its narrow borders.

In testimony before the House Corporations Committee in March, both sides presented different packages of statistics sliced from different years of insurance claims to argue that Rhode Island’s costs have either remained uniformly high since 2003 or have accelerated beyond the pace of national increases.

The Auto Body Association report shows collision premiums actually declining between 2002 and 2010 and repair costs have only increasing 0.003 percent annually between 2004 and 2010.

In a rebuttal report, PCI said ABARI didn’t include the latest cost figures in its analysis and included only collision, not all vehicle-damage coverage, in its report on premiums.

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