Rhode Island Auto Body Shop Legislation Goes Into Effect
Updated legislation regarding the use of aftermarket parts in the repair of motor vehicles, passed by the Rhode Island General Assembly in June, has become law without Rhode Island Governor Gina Raimondo’s signature.
Rhode Island law allows bills passed by the General Assembly to become law after 10 days of being transmitted to the governor if they aren’t vetoed, according to a Rhode Island Legislative Press and Public Information Bureau spokesperson.
H-8013/S-2679 provides that insurance companies cannot mandate the use of aftermarket parts without the owner’s consent on motor vehicles less than 48 months beyond the manufacture date. Aftermarket parts are motor vehicle body replacement parts that are not original equipment manufacturer parts, or parts produced by the manufacturer of the motor vehicle being repaired, according to the legislation.
The updated legislation expands the time frame of Rhode Island’s previous law, which mandated consumers are entitled to choose original manufacturer parts over aftermarket parts if a vehicle is 30 months old or newer.
The bill has faced opposition from some insurers, with The Property Casualty Insurers Association of America (PCI) initially encouraging Raimondo to veto the bill over concerns it could create pressure to raise auto insurance premiums and raise auto repair costs.
“We’re disappointed that the governor decided to let this bill become law,” said Frank O’Brien, vice president of state government relations for PCI, in a statement to Insurance Journal. “It is yet another in a series of auto body-related bills that the Rhode Island legislature has passed and have gone into effect which do nothing but increase rates for Rhode Island consumers so that the auto body industry in Rhode Island can continue to make the kind of money that it makes.”
O’Brien had previously spoken out in a PCI press release against the bill when it passed the General Assembly, adding that, “Rhode Island drivers, as a result, could end up paying the highest auto insurance premiums in the U.S.”
The Auto Body Association of Rhode Island (ABARI) has expressed its support of the legislation, however, contending it is good for consumers as it entitles owners of vehicles that are four years old or newer to choose original manufacturer parts for repairs.
“We’re very pleased, and we believe it’s a big win for consumers,” ABARI spokesperson Jina Petrarca said in a statement to Insurance Journal. Petrarca countered claims that the bill’s passage could raise auto insurance premiums.
“[Insurers] said the same thing when the original law was passed more than 20 years ago, and it didn’t happen,” she added. “Insurers in Rhode Island have some of the highest profit margins for auto damage property claims in the country. It’s a highly competitive market, and it will adjust itself accordingly. Consumers will not be spending more for insurance.”
Since 2003, Rhode Island has passed several laws regarding auto body shops in the state. PCI stated in the release it believes that overall, these laws have increased the amount paid for auto body repairs and have limited the role of auto insurers in the claims process, as well as reduced insurers’ ability to provide checks and balances on behalf of their customers.
“It’s simple,” O’Brien said in the release. “The more the auto body shop owners pad their profits repairing vehicles, the greater the pressure to raise auto insurance premiums.”