by Sam Richie & Shannon K. Mitchell, AASP-MN Lobbyists
AASP-MN continues to work in the “off-season” – when the legislature is not in session – to further refine and advance policy changes that will positively impact members’ day-to-day work.
To that end, AASP-MN leadership and members met with the Insurance Federation of Minnesota to discuss legislation introduced during the 2023 legislative session. The purpose of the discussion was to examine some of the underlying problems that led to the draft legislation and to determine if there are additional solutions to consider to improve the proposed legislation.
Along with meetings and ongoing AASP-MN member conversations, we also monitor legislation passed in other states and at the federal level to potentially draw upon relevant policy initiatives. We’ll highlight one recent and promising state law change along with an ongoing state and federal policy issue – The Right to Repair.
State Spotlight – Rhode Island
This past year, Rhode Island made significant changes to its Unfair Claims Settlement Practices statutes and created a new process for independent inspections and appraisals. These consumer and repair shop policy wins are relevant in that they are similar to solutions AASP-MN has discussed and, in some cases, introduced through proposed legislation in recent years.
The first change requires insurers to compensate for procedures identified by the original equipment manufacturer (“OEM”).1 Insurers must compensate for these procedures when included in the repairer’s appraisal or requested by the repairer.
The following change addresses delays in the appraisal process by requiring insurers to promptly inspect, which is defined as within three days of a request by a repair shop. One of the most important changes is the added consequence of failing to schedule the appraisal inspection. The new law states that “if the insurer’s appraiser fails to inspect the damaged motor vehicle within the allotted number of business days for an initial appraisal (three days) or a supplemental appraisal (four days), the insurer shall forfeit its right to inspect the damaged vehicle prior to repairs, and negotiations shall be limited to labor and the price of parts.” The law goes on to say that the insurer is prohibited from disputing “the existence of damage or the chosen manner of repair,” with minor exceptions. 2
The last change in this law is also substantial. It creates a right to a third-party appraisal and lays out multiple steps when parties can agree on the amount of a loss. The law requires the insurer and vehicle owner to select an appraiser within three business days after the written demand is given from one party to the other. The consequences of the insurer not conducting the inspection within three business days is the same as previously mentioned. “The insurer shall forfeit its right to inspect the damaged vehicle prior to repairs, and negotiations shall be limited to labor and the price of parts.” Finally, if the third-party appraisal differs and the parties cannot agree, then a final “umpire appraiser” can be selected by the party who initially requested an independent appraisal.
Delayed approvals or denials on initial claims and supplements, along with difficulties securing in-person inspections, prompted AASP-MN to introduce legislation last year that would require a response from insurers within three days. As we refine our plan for the coming legislative session, we will watch for any immediate lessons learned or impacts in Rhode Island as this newly passed law is implemented.
State and Federal Spotlight: The Right to Repair
The Right to Repair is an issue increasingly getting more traction in state legislatures and in Congress and will have impacts on the automotive industry and, in some states, already has. The idea behind the right to repair is that if someone owns something, they should be able to either fix it, or take it to a repair person or store of their choosing. This could apply to vehicles, electronics or appliances to name a few. Right to Repair laws require original manufacturers to share manuals and parts.
Several states have passed Right to Repair legislation in the past few years, mainly focused on electronics, with many others introducing legislation.3 In 2023, Minnesota joined the list of states that have passed Right to Repair laws, albeit with an explicit carve-out exempting the automotive industry.4 There continues to be draft federal legislation, although the path forward is uncertain at present time. This issue will likely continue to be a part of the landscape moving forward, so expect to hear more on this front from AASP-MN.
1 Rhode Island Senate Bill 0925 (2023). See webserver.rilegislature.gov/BillText/BillText23/SenateText23/S0925A.pdf
3 What You Should Know About Right to Repair. New York Times (2021)
4 Minnesota Digital Fair Repair Act. Attorney General FAQ. (2023). ag.state.mn.us/Consumer/Publications/RightToRepair.asp
Want more? Check out the October 2023 issue of AASP-MN News!