Insurance Group Urges Defeat of Wis. Auto Repair Shop Legislation

The American Insurance Association (AIA) today urged Wisconsin legislators to reject two bills that would make it illegal for insurers to provide their customers valuable information after a car accident.

“These bills are anti-consumer. Direct repair programs provide consumers with quality, efficient and convenient repairs to help them get back to their normal lives after what can be a traumatic event,” said John Birkinbine, AIA assistant vice president, Midwest Region. “The legislation being promoted under the veil of ‘consumer rights’ actually takes away the customer’s right to choose a higher level of service and a streamlined claims process.”

Two bills, Assembly Bill 353 and Senate Bill 181, are to be heard in their chamber’s respective insurance committees today and face stiff opposition from the insurers, agents and members of the auto repair industry. The proposed legislation would make it illegal for an insurance company representative to provide information about repair options, such as warranties, eliminate an insurer’s ability to negotiate discount rates, and delay the claims process. Current Wisconsin law already prohibits insurers from requiring the use of a specific repair facility as a condition of coverage.

According to the AIA additional benefits of direct repair programs include a one-stop “concierge” type service that allows customers to start the claims process, drop their car off with a pre-screened, certified auto repair facility, secure a rental vehicle and return when repairs are done, as well as helping lower overall insurance costs to consumers through fraud prevention and negotiated volume discounts. Additionally, many repair facilities enjoy increased business from referrals and guaranteed payment of repairs from insurers.

Property/casualty insurers in Wisconsin employ more than 18,000 people and paid over $144.8 million in premium taxes alone in 2005. Additionally, insurers paid out $4.6 billion in 2005 for personal and commercial loses in the state. For more information on the legislation, please visit

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