Legislation to prohibit repair incentives, assignment of benefits and steering sent to Governor.
The Florida House of Representatives yesterday voted 103-16 to send auto glass legislation that prohibits repair facilities from offering incentives to customers on insurance claims or the assignment of benefits to a glass claim to Governor Ron Desantis. Florida Senate Bill 1002 (SB 1002), amends Section 559.920 of the Florida Statutes to prohibit motor vehicle repair facilities or their employees from providing incentives to customers with glass claims.
The bill prohibits insurers from steering claimants to specific repair facilities. For policyholders, insurers must provide “actuarial sound” discounts to an insured if they offer a policy with a provision that provides a “repair arrangement” for glass replacement, repair, or calibration services.
The bill also requires repair facilities to provide a written or electronic notice if calibration or recalibration of an advanced driver assistance system (ADAS) is needed and the work must meet or exceed vehicle manufacturer’s specifications.
Additionally, the bill prohibits customers from entering into an assignment of benefits (AOB) agreement with a repair facility on or after July 1, 2023.
Auto glass and collision repair facility operators that have customers assign the benefits to their claim to the repair facility typically do so to secure higher labor rates than insurers are willing to pay or to reduce or avoid discounts demanded by insurers. Having been assigned the benefits of a claim, the repair facility can file a suit against the insurer to receive higher payments.
The bill is the result of a multi-year effort by the insurance industry to restrict assignment of benefits agreements on auto glass claims.
In 2017, the Property Casualty Insurers Association of America (PCI) warned vehicle owners in Florida not to become a “victim of fraud” when having a windshield repaired or replaced and to avoid AOB “schemes” by glass repair and replacement facilities. Legislation introduced at the time was supported by the PCI but failed to pass the legislature.
Legislation to restrict AOBs was introduced in subsequent legislative sessions but also failed to pass the legislature.
Under Florida’s Constitution, since the legislature is scheduled to adjourn this Thursday while the act is in the Governor’s possession, the Governor has 15 days from the date of presentation in which to take action on the bill.
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