Volume 9, Issue 4 - August/September 2007

legal updates

Oregon Anti-Steering Bill Becomes Law

On June 22, Oregon Gov. Ted Kulongoski signed Senate Bill 523, which requires insurance companies to inform customers that they have the right to choose an automotive repair facility before recommending a particular motor vehicle repair shop to make repairs to the insured’s vehicle, into law. The law also states that if the customer uses a shop recommended by the insurer, the insurer must provide printed correspondence saying that it recommended a repair shop. If the customer agrees to use that shop, then the insured’s vehicle will receive repairs returning it to a pre-loss condition. If the insured has his repairs done at a shop other than those recommended, the insurer cannot limit the cost of repairs necessary to return the vehicle to the pre-loss condition under the wording of the law. 

Sen. Floyd Prozanski, who originally sponsored the bill, feels the bill is a positive one for the consumer. “I thought it would be a plus or benefit for Oregonians in the sense of [allowing] consumers to know what their rights are,” Prozanski says, “that they have the right to choose whomever to do the repairs to their vehicles and that [it would be] understood early in the conversation that they would not be persuaded or urged … to go wherever their insurer was recommending.”

The original bill barred insurers from suggesting a repair shop unless the insured requested a recommendation. The insurance lobby had that provision removed after a hearing in March. 

However, Prozanski says the final wording is agreeable to him. “I had some concerns with the original language because it did not allow the insurer to even discuss options that they might want to present to their customers or clients,” he says. “I believe truth in disclosure is important. But, if a consumer says, ‘I don’t want to hear it,’ they can do that.” 

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