Assigned to COMPS & TRANSIT FOR
COMMITTEE
Assigned to COMPS & TRANSIT FOR
COMMITTEE
ARIZONA STATE SENATE
Fifty-Third Legislature, Second Regular Session
auto glass; repair; replacement; practices
Purpose
Establishes minimum rates for parts and labor paid by a motor vehicle liability policy insurer (insurer) to an auto glass repair vendor. Prohibits an insurer from coercing an insured towards a network auto glass provider.
Background
A motor vehicle liability policy is an owner's or an operator's policy of liability insurance that is issued by an authorized insurance carrier to the benefit of the person named as the insured. A motor vehicle liability policy must be certified as proof of financial responsibility (A.R.S. § 28‑4001).
An insurer that writes a comprehensive private passenger automobile insurance policy is statutorily required to provide complete coverage without a deductible for the repair or replacement of all damaged safety equipment, including windshields, doors, windows and the glass or plastic that covers lights (A. R. S. § 20-264).
An insurer or third-party administrator may recommend an auto glass repair facility, but statute grants the vehicle owner the right to choose any facility for an auto glass loss repair. It is unlawful for an auto glass retailer or repairer to submit a false insurance claim or work order, advise the policyholder to falsify damage to file an auto glass insurance claim, misrepresent the cost of the repair order, or increase the scope of the repair or replacement (A.R.S. Title 20, Chapter 2, Article 6).
A third-party administrator is any person who provides administrative service or adjusts or settles claims in connection with auto glass repair insurance coverage (A.R.S. § 20-463.01).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a motor vehicle liability policy insurer (insurer) providing for loss due to damaged auto glass to compensate the insured's chosen vendor at a competitive price that is fair and reasonable within the local industry at large.
2. Requires an insurer or third-party administrator electing to perform an inspection of damaged auto glass before repair or replacement to conduct the inspection within 24 hours after claim filing by the insured.
3. Prohibits a person who sells or repairs auto glass to knowingly offer a rebate, gift, gift card, cash or coupon with an aggregate value of more than $100 to any person to induce the policyholder to file an auto glass repair or preplacement claim under an insurance policy.
4. Prohibits an insurer or third-party administrator from:
a) any act of intimidation, coercion, threat, incentive or inducement for or against an insured to use a particular company or location to provide auto glass repair or replacement services or products, excluding a warranty;
b) implying that the work of a selected out-of-network glass repair facility is substandard to a network provider; or
c) implying that the insured will receive faster resolution or completion of a claim by selecting a network provider.
5. Requires an insurer to use its own employee, who is licensed as an adjuster, to perform auto glass inspections.
6. Prohibits an insurer from requiring an inspection if:
a) the vehicle cannot be moved or driven due to bad working order or unsafe mechanical condition;
b) the windshield damage has demonstrably impacted the structural integrity of the vehicle; or
c) the vehicle is such an unsafe condition that continued use would endanger the driver, vehicle occupant or other person on the highway.
7. Defines fair and reasonable as:
a) for parts, not more than 10 percent discount off benchmark pricing established by national auto glass specifications; and
b) for labor, not less than $75 per hour rate.
8. Becomes effective on the general effective date.
Prepared by Senate Research
February 8, 2018
GH/lb