AUTOMOBILE REPAIR LEGISLATION ON STEERING OF WORK IN THE AUTOBODY AND GLASS REPAIR INDUSTRIES (2007)
The purpose of The Chamber movement is to be a visible and effective organization for the expression of the views of the membership committed to the competitive market system. It is to act as an authoritative spokesperson for business, to undertake an active leadership role on behalf of members and the business community, through initiating and developing programs to be presented to all levels of government.
In the matter of automobile insurance agencies and their practices with respect to affecting automobile repairs following vehicle crashes, there are some issues and inequities which should be rectified in a manner consistent with regulation of this industry across North America, Europe and Australia.
The problem is called “steering of work” and occurs when insurers direct insured repairs to favoured or selected shops, creating an unequal marketplace. .
On the surface, it would appear that when one has an accident, most people have no idea what to do and where to go to have repairs done. They simply want the car fixed with as little inconvenience and expense as possible. If the insurer offers choices of shops to take the work to, it seems to be a good thing.
It becomes a problem when and if the insurer recommends that work be taken to shops where agreements or arrangements have been made which could result in the lowest cost of repairs and parts, not necessarily the best repairs and parts for the vehicle. In some jurisdictions there have been allegations that inferior repairs and parts result from extreme cost cutting in order to maximize profits. This is often exacerbated by the insurer sets unrealistically low payment schedules and when it insists that the repairer use the cheapest non-original (after market) parts available, as opposed to using original manufacturer parts (OEM). After market parts may not fit as well as original parts, nor are they necessarily engineered to the same specifications. This becomes a problem in locations on the vehicle where critical crumple zones are designed to protect passengers against injury, not just issues of fit and finish.
The simple solution to this problem is to enact legislation prohibiting the steering of work. It is not intended that it stop insurers from offering recommendations when sought by the customer; however, the insurer must provide a wide and fair array of options, not just repairers taken from a favoured list.
At least 35 states in the US and some Canadian provinces have found these issues to be a big enough problem that legislation has been required and enacted. In a number of jurisdictions, including California, New Jersey and Oregon, the legislatures have had to revisit and bolster their laws. This past year, due to the same problems, the Australian State of New South Wales also enacted “Anti-Steering Legislation”.
The Chamber believes it is critical that British Columbia businesses are treated equally, in keeping with the principle of fair competition in the marketplace.
THE CHAMBER RECOMMENDS
That the provincial government introduce legislation to eliminate the practice of steering of work in the auto body and auto glass repair industry.
The purpose of The Chamber movement is to be a visible and effective organization for the expression of the views of the membership committed to the competitive market system. It is to act as an authoritative spokesperson for business, to undertake an active leadership role on behalf of members and the business community, through initiating and developing programs to be presented to all levels of government.
In the matter of automobile insurance agencies and their practices with respect to affecting automobile repairs following vehicle crashes, there are some issues and inequities which should be rectified in a manner consistent with regulation of this industry across North America, Europe and Australia.
The problem is called “steering of work” and occurs when insurers direct insured repairs to favoured or selected shops, creating an unequal marketplace. .
On the surface, it would appear that when one has an accident, most people have no idea what to do and where to go to have repairs done. They simply want the car fixed with as little inconvenience and expense as possible. If the insurer offers choices of shops to take the work to, it seems to be a good thing.
It becomes a problem when and if the insurer recommends that work be taken to shops where agreements or arrangements have been made which could result in the lowest cost of repairs and parts, not necessarily the best repairs and parts for the vehicle. In some jurisdictions there have been allegations that inferior repairs and parts result from extreme cost cutting in order to maximize profits. This is often exacerbated by the insurer sets unrealistically low payment schedules and when it insists that the repairer use the cheapest non-original (after market) parts available, as opposed to using original manufacturer parts (OEM). After market parts may not fit as well as original parts, nor are they necessarily engineered to the same specifications. This becomes a problem in locations on the vehicle where critical crumple zones are designed to protect passengers against injury, not just issues of fit and finish.
The simple solution to this problem is to enact legislation prohibiting the steering of work. It is not intended that it stop insurers from offering recommendations when sought by the customer; however, the insurer must provide a wide and fair array of options, not just repairers taken from a favoured list.
At least 35 states in the US and some Canadian provinces have found these issues to be a big enough problem that legislation has been required and enacted. In a number of jurisdictions, including California, New Jersey and Oregon, the legislatures have had to revisit and bolster their laws. This past year, due to the same problems, the Australian State of New South Wales also enacted “Anti-Steering Legislation”.
The Chamber believes it is critical that British Columbia businesses are treated equally, in keeping with the principle of fair competition in the marketplace.
THE CHAMBER RECOMMENDS
That the provincial government introduce legislation to eliminate the practice of steering of work in the auto body and auto glass repair industry.
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