Insurers Can’t Mandate Use of Designated Auto Repair Shop, Arkansas Commissioner Says

Arkansas Insurance Commissioner Alan McClain has reminded insured Arkansans seeking automobile repairs that insurance companies cannot require automobile repairs be done at a specific repair shop.

“If an insurer inaccurately informs you that your vehicle’s coverage is contingent upon utilizing a particular preferred vendor, they are in violation of the law and will be subject to penalties,” McClain said in a media release.

Under Arkansas law and insurance department rules, consumers have a choice in where they get their vehicle repaired following an accident.

Under the Trade Practices Act of the State Insurance Code, an insurance company may not require that repairs be made by a particular contractor, supplier or repair shop as a condition of payment of a claim. Doing so is an “unfair claims settlement practice,” the Arkansas Insurance Department’s announcement said.

While insurers may provide a list of preferred repair shops, consumers are not obligated to select one of those preferred vendors. Arkansas consumers maintain the freedom to choose the repair shop to which they take their vehicle.