News & Views

American Honda will, from time to time, place collision industry magazine articles at this site addressing news, issues, and trends that could be of interest to consumers.

These articles are offered as informational only, reprinted as found in various collision industry magazines, and do not necessarily represent the position or opinion of American Honda.

Friday, July 19, 2013

Rhode Island Governor Signs Total Loss Bills

Rhode Island Governor Lincoln D. Chaffee signed H-5263 and S-465 into law on July 17. The bills, which took effect upon passage, require an insurance company to obtain the owner's consent before declaring a vehicle a total loss if the cost to repair the vehicle is less than 75 percent of its value.

The Auto Body Association of Rhode Island (ABARI) said in a statement, "We are grateful to the Governor and the Legislature for recognizing that consumer protection is the true purpose of this law. For too many years, consumers across this State, many at the lowest economic levels, have been subjected to the heavy hand of insurance companies that seek only to increase their profits.

"Many consumers have lost their second largest asset, because an insurance company could save more money if they totaled a safely repairable vehicle. This practice is now prohibited thanks to Governor Chaffee and the General Assembly," ABARI said.

"The new law also ensures that consumers receive the full value of their vehicle when it is lawfully determined a total loss; it requires insurers to value vehicles based upon publically available guides used in the automotive industry such as Kelly Blue Book and NADA. They are now prohibited from using their own cost-cutting programs that take advantage of those who do not have the means to fight such unfair claims practices," ABARI added.

Insurers had campaigned against the bill with online and radio advertisements and the Property Casualty Insurers Association of America (PCI) said they were "profoundly disappointed" that the Governor approved the legislation.

Frank O'Brien, Vice President State Government Relations for the Property Casualty Insurers Association of America (PCI) said, "By forcing vehicles that are badly damaged to be repaired rather than totaled, this law is designed to increase body shop revenues. But in the end it is the Rhode Island consumer who will pick up the tab. Over the years special interest groups such as ABARI have wielded significant influence in Providence and they have reaped the benefit of bill after bill being passed with the end result being repair costs growing at more than twice the national average and increased hassle and inconvenience for consumers. Unless someone provides a check and balance on body shop costs, this trend is likely to continue.

"We believe consumers, insurers and body shops should have the same goals - high quality repairs at reasonable costs. Although this new law falls short of the mark, the insurance industry remains committed to protecting the interests of consumers and putting safety first."

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