Senate advances bill backed by R.I. auto-body shops

May 09--PROVIDENCE, R.I. -- With help from the top three Democrats in the state Senate, Rhode Island's auto-body shop owners appear to have won a round in their annual State House war with the state's automobile insurance industry over motor-vehicle replacement parts.

The Senate Judiciary Committee on Tuesday unanimously approved a bill sponsored by Senate President Dominick Ruggerio, Majority Leader Michael McCaffrey and Majority Whip Maryellen Goodwin that the auto-body shop owners have sought for years to free them from insurance industry mandates on the kinds of parts they use when repairing crash-damaged vehicles.

For what it's worth: Ruggerio received nine $1,000 political contributions totaling $9,000 from people affiliated with Reliable Collision Repair, Casale Auto Body, Auto Body Concepts and Providence Auto Body during the first quarter of this legislative year. McCaffrey received at least $7,000 from the auto-body lobby.

"More than a decade of special interest bills promoted by the Auto Body Association of Rhode Island have resulted in Rhode Island's 700,000 licensed drivers paying some of the highest auto repair costs and auto insurance premiums in the nation," said Frank O'Brien, vice president of state government relations for the Property Casualty Insurers Association of America.

"Now ABARI [Auto Body Association of Rhode Island] is back with their worst bill yet, legislation to effectively ban the use of high quality, reliable aftermarket parts during the repair process. This has absolutely nothing to do with safety, and everything to do with increasing auto body shops' profits at the expense of Rhode Island drivers who could end up paying THE highest auto insurance premiums in the nation."

But the state's auto body shop owners contend that they are the ones looking out for the consumer. Their lobbyist is former Rep. Peter Petrarca, the lawyer-son of John Petrarca, the founder of Providence Auto Body and long-time leader in the Auto Body Association of Rhode Island.

This year's arguments center around replacement parts, which typically fall into two categories: those supplied by the original equipment manufacturers (OEM) for each vehicle under their own name; and those described as "after-market" parts that may or may not have been produced by the same manufacturer in the same factory.

The summary of the bill (S2679) says: "Insurance companies may not mandate the use of aftermarket parts without consent of the vehicle owner in the repair of motor vehicles which are less than 48 months beyond the date of manufacture." (Current law: 30 months). The original bill also placed limits on what an insurance company could require.

A reworked version surfaced just before the vote. It bans mandates on repair procedures "that are not in compliance with the recommendations of the original equipment manufacturer" even when OEM parts are used. But Property Casualty Insurers Association of America spokesman Christopher D. Hunter said it did not address the insurers' concerns.

Providence Auto Body spelled out its views in a 2015 blog post titled: "Aftermarket Parts: A Risky Business."

"The insurance companies want you to use aftermarket parts after your accident because it's cheaper for them," the post said. "The law in Rhode Island currently states that the insurer cannot force a consumer whose vehicle is 30 months or newer to accept aftermarket parts in the repair. In this instance, they can only be used with written authorization. ... The insurance companies don't typically offer this information."

Continuing, the post says the Auto Body Association of Rhode Island "believes there is a place in the market for aftermarket parts -- but not on a new car."

The opponents contend that "original" parts are, as a rule, more expensive, and not necessarily superior.

"By offering lower-cost alternatives to OEM parts, aftermarket parts manufacturers have forced OEMs to reduce prices. As a result the cost of all cosmetic crash repair parts is less than if aftermarket parts were absent from the marketplace," the National Association of Mutual Insurance Companies told the lawmakers.

"If this bill were to pass, this would include everything from windshield wipers to oil filters," added Andreas Heiss, a representative of LKQ Corporation, which describes itself as a "leading provider of alternative and specialty parts" for autos and other vehicles, with a 55-employee site in Cumberland.

According to LKQ, passage would allow motor vehicle manufacturers to dictate the use of "more expensive car company parts" which, in turn, will jack up premiums.

-- kgregg@providencejournal.com

(401) 277-7078

On Twitter: @kathyprojo

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