An Illinois bill that would require auto insurers to pay whatever any given body shop demanded for repairs would result in skyrocketing loss costs for insurers and higher premiums for drivers, according to an insurer lobbyist.
House Bill 2330 is “anti-consumer and anti-competitive,” said Greg LaCost, senior counsel and regional manager for the Property Casualty Insurers Association of America, testifying at a Consumer Protection Committee hearing in Springfield. “It would sever the customer service relationship between consumers and insurers, and result in higher costs for everyone.” The bill would prohibit insurers from recommending a body shop unless requested by the policyholder. It would forbid insurers from limiting or discounting repair costs if the policyholder chooses another repair facility and provide civil penalties for violations. And it would make insurers liable to claimants and repair facilities for damages from violations.
Under current Illinois law, consumers benefit from the “physical damage repair option,” which allows them to choose their own body shop for vehicle repair, LaCost said. If they choose a shop their insurer recognizes as reputable, the insurer generally waives its own estimation process and allows the consumer to go directly to the shop. “If HB 2330 becomes law, more internal estimates will be required, which would slow down the repair process,” LaCost said.
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