Iowa lawmakers are considering new legislation that would revise rules governing automobile glass repairs and related insurance claims, including restrictions on certain fees, provisions addressing advanced driver assistance systems (ADAS) and regulations on consumer incentives offered by repair shops.
Senate Study Bill 1192 would prohibit policyholders from transferring or reassigning any post-loss benefits, duties or rights under their insurance policies, according to the bill’s text.
The proposed legislation would also ban repair shops from offering gifts, cash or other incentives to encourage customers to use their services.
Repair facilities would be prohibited from charging unreasonable fees, submitting fraudulent documents to policyholders or insurers, misrepresenting repair costs or claiming that repairs have been approved without confirmation from the insurer.
According to AM Best, the bill would also prevent insurers from requiring policyholders to use a specific repair shop, though insurers could still make recommendations or maintain networks of preferred repair facilities.
Several states have enacted laws mandating insurance companies to offer full coverage for windshield repairs or replacements without applying a deductible, provided the policyholder has comprehensive coverage. For instance, in Florida, insurers are required to waive the deductible for windshield replacements under comprehensive coverage.
Under the proposed Iowa bill, repair shops would not be permitted to begin work under a first-party insurance policy until the policyholder has filed a first-party claim and the repair shop has received either a claim number or a referral number.
The legislation would also require glass repair facilities to provide policyholders with good-faith estimates outlining the expected fees and costs for the work. If the initial estimate changes, the shop would be required to provide an updated estimate before proceeding with additional work. Upon completion, the shop would be required to give the policyholder an itemized invoice.
Repair shops would also be required to notify policyholders if a vehicle’s windshield is equipped with advanced driver assistance systems. The bill defines ADAS as systems intended to improve vehicle safety and reduce crash-related losses.
If ADAS features are present, the shop would be required to inform the policyholder whether calibration is necessary and whether the shop will complete the calibration. If the shop does not intend to perform the calibration or is unable to, the shop will be required to inform the policyholder and refer them to a qualified repair facility.
Elsewhere in the state, homeowner carriers in Iowa have responded to mounting catastrophic weather losses, inflation, and rising reinsurance costs by increasing premiums, limiting exposure, and adjusting underwriting strategies, as per a report from the state’s insurance division.
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