Property Casualty Group Targets Rhode Island Auto Body Repair Bills

The Rhode Island State House Corporations Committee is slated to hear H. 6324 and H. 6325 today, two special interest auto body repair bills that threaten to add costs related to parts, materials, sublet services, and a new "industry standard markup" loophole in a state that already costs more than any other to repair a car, the American Property Casualty Insurance Association said in a news release.

The bills are the latest in a decades-long effort by the autobody industry - a lobby with a notably strong grip in the state - to pass more than two-dozen bills related to car repair costs.

"House 6324 would effectively allow the autobody industry to use whatever part invoicing system they want, including several known to be open to potential manipulation, and an insurer would be required to pay without contest as long as an invoice is produced," said Frank O'Brien, Vice President of Government Relations for the American Property Casualty Insurance Association (APCIA). "Even more concerning for consumers, it includes a broad but ambiguous list of services for which an auto body facility must be compensated in addition to a separate 'industry standard markup.' Together these changes translate to a blank check for the autobody industry to add exorbitant costs to an already overburdened system."

Other stakeholders question the purpose and consumer impact of H. 6325.

"House Bill 6325 would effectively ban the use of quality recycled parts that many Rhode Islanders rely on to repair their cars in a cost-effective way," said Harry Hall of Hall's Garage in Scituate and President of the Auto Recyclers Association of Rhode Island. "Genuine recycled automotive parts sold by our members meet the highest standards of product assurance, quality control, and requirements for fit, finish, durability, reliability and safety of the original equipment manufactured (OEM). This legislation makes no sense."

Hall also expressed concern about the impact of H. 6325 on small businesses throughout the state, urging state lawmakers to reject the bill.

"Outright banning the use of recycled parts could put several of our auto recyclers out of business, just as we're starting to recover from the impacts of the COVID-19 pandemic," said Hall. "It will hurt small businesses and Rhode Island drivers who will be forced to pay higher costs for automobile repairs. The Auto Recyclers Association of Rhode Island urges the General Assembly to reject this legislation designed to pad the profits of auto body shops at the expense of auto recyclers and Rhode Island automobile owners."

Rhode Island has passed more auto body repair legislation and restrictions than any other state, a fact that O'Brien attributes as the cause of the astronomical costs of owning a car in the state. At an average of $4,548, the state has had the highest average auto body repair costs in the country for the last five years running - $200 higher than New York at #2. High auto repair costs, O'Brien argues, are inextricably linked to Rhode Island's high auto insurance rates, and contributes to the state having the highest number of uninsured drivers in New England by far - 16.5 percent, according to the Insurance Research Council.

"You simply cannot keep adding costs to a system like these two bills will do and the previous two-dozen before them have, and not expect there to be consequences," said O'Brien. "It is common sense - the more costs you add to a system, the more things will cost for consumers. Both bills add to a long list of restrictions that limit flexibility, often defy common sense, and make Rhode Islanders wait longer for their vehicles to be repaired."

Click here (https://www.apci.org/attachment/static/4003) for Frank O'Brien's full written testimony opposing H. 6324 and H. 6325.