Bills put R.I. auto body industry, insurers on collision course

Providence Journal (RI)

PROVIDENCE -- Few industries are more generous to Rhode Island's political leaders than the auto body industry, which handed out at least $65,550 in political donations during the first three months of this year.

Some of the donations went to Gov. Gina Raimondo and a handful to local leaders. But the vast majority of those dollars went to state lawmakers weighing the fate of the auto body industry's latest push for legislative help in winning its ongoing war with insurance companies. That includes at least $14,900 in 1st quarter contributions to House Speaker Nicholas Mattiello and at least $11,750 to Senate President Dominick Ruggerio.

A single family -- the Petrarca family -- which includes former state Rep. Peter Petrarca and his sister and law partner, Jina Petrarca, contributed $22,550 to Rhode Island politicos during the first quarter. It was Jina Petrarca who again this year represented their family's Providence Auto Body at legislative hearings on a packet of bills vehemently opposed by the insurers. Two of the four are scheduled for votes by the House and Senate Judiciary Committee on Tuesday.

Both sides agree: Rhode Island drivers have a stake in the outcome.

A Gatehouse Media investigation published in the Sunday Journal showed how much Rhode Island auto insurance rates have grown compared to most other states. Among the findings:

States with the biggest rate hikes include Colorado, Rhode Island, Louisiana, California and Florida -- all of which jumped by at least 50 percent. Rhode Island's average rate leapt by $742 (54 percent) from $1,368 in 2011 to $2,110 last year. At that level, Rhode Island's average rate was also higher than every other state except Louisiana and Michigan.

Massachusetts, by way of comparison: $1,277, according to the auto insurance comparison website The Zebra, which generated its numbers based on the profile of a 30-year-old, single, male with a 2014 Honda Accord EX, a good driving history, and a standard insurance policy including injury liability, property damage liability and a $500 deductible for comprehensive and collision.

In a series of tweets, Frank O'Brien, vice president of the American Property Casualty Insurance Association, blamed Rhode Island's status as one of the most expensive states in which to insure a car on "poor/crowded roads,'' a "high # of uninsured motorists'' and the cumulative effect of the 22 auto-body bills passed since 2003.

"RI has passed more auto body legislation than any other state. Period,'' O'Brien tweeted. "It cost upwards of 40% more to repair a car here ... Bills pending in GA will make it worse,'' O'Brien tweeted.

But Jina Petrarca, speaking on behalf of Providence Auto Body, told the Senate Judiciary Committee on May 7: "We come up here every year and we appreciate your listening ... Twenty-two bills later we have some amazing consumer protection laws that no other state has ... They have always been about consumers. There's really nothing in here for body shops. I mean it sounds great to say that. 'These are body shop bills' ... [But] if we don't bring these to you, no one will."

In addition to O'Brien, those testifying against the bills -- in person or in writing -- included representatives of Amica, Allstate and Geico. Those speaking in favor included Petrarca and her father, John Petrarca; consultant Robert Godfrey and Randy Botella of Reliable Collision, representing the Auto Body Association of Rhode Island.

One of the bills co-sponsored by Ruggerio, Senate Majority Leader Michael McCaffrey and Senate Majority Whip Maryellen Goodwin [S848], would create a "private cause of action'' for a vehicle owner who believes an insurer has violated the state's "unfair claims settlement practices act'' in disputes over the merits of a major repair versus a "total loss" declaration. The penalty -- "3 times the amount of damages awarded plus reasonable attorneys' fees."

"The function of this bill is to create leverage by which body shops can pressure insurers to authorize repairs on vehicles that should appropriately be declared total losses,'' said Geico senior counsel John A. Taylor.

Two other matching bills slated for votes in the House and Senate Judiciary Committees on Tuesday [S849,H6101] would: "Expand the definitions of unfair claims practices committed by insurers." It would, for example, bar an insurer from refusing to pay a body shop for certain "documented charges" and basing an appraisal on a photograph. The insurers said this would make Rhode Island the only known state to ban use of photographs in any cases.

"These bills represent the continued undue influence of the Body Shop Industry in the R.I. legislative process,'' said Taylor. "In the name of consumer protection,'' the legislature "simply adds expense to the repair process in Rhode Island,'' echoed Allstate's regional counsel, Timothy Knapp.

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