Group Warns Maryland’s Auto Repair Bill Could Raise Costs for Consumers

March 6, 2014

An industry association says a recently proposed bill in Maryland could hurt consumers by limiting insurers’ ability to manage auto body repairs and control costs.

Maryland’s Senate Bill 487 (Motor Vehicle Liability Insurance – Replacement Parts for Damaged Motor Vehicles) would prohibit insurers from requiring an auto body repair shop to use a specific vendor or process for obtaining repair parts and materials. Additionally, the bill would prohibit insurers from requiring the use of aftermarket crash parts on vehicles that are less than three years old, the Property Casualty Insurers Association of America said.

“PCI and our members encourage lawmakers to closely examine the possible negative ramifications for consumers that could result if Senate Bill 487 passes,” Oyango Snell, PCI’s state government relations counsel, said in a statement.

Snell argued this bill would impose severe restrictions on how insurers manage the auto body repair process and that it could also hurt consumers by increasing the costs associated with getting vehicles repaired and increasing the cost of insurance premiums.

Currently Maryland’s average collision premium ranks 13th-highest in the nation. Snell said that ranking could rise by forcing more repairs to always be made with original equipment parts, which can be as much as 60 percent more than aftermarket parts.

“We believe lawmakers will see that this bill limits consumer choice and stands in the way of insurers providing high quality repairs at reasonable costs for their constituents,” Snell said. “We are urging lawmakers to table this legislation and continue to fight against higher costs for consumers.”

Source: The Property Casualty Insurers Association of America

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