My Turn: Put the brakes on vehicle repair standards bill

For the Monitor
Published: 9/14/2019 7:00:08 AM

Gov. Chris Sununu recently vetoed House Bill 664, a measure dealing with vehicle repair standards. As passed by the Legislature, the bill would have required insurers to pay for any repair performed according to procedures set by auto manufacturers.

While the sponsors of this legislation were well-intentioned, I believe the governor made the right decision to veto HB 664, because it would have upset the competitive balance that has helped keep New Hampshire’s auto insurance rates among the lowest in the nation.

Maintaining a balance in auto repairs, in this case between auto insurers and the repair shops, ensures that consumers will receive the best service at the lowest price. Both insurers and auto repair shops have an interest in providing for safe repairs at a reasonable cost, and as things stand, both sides in almost every case are able to reach agreement. If they cannot agree, current law provides a resolution mechanism based on the price available from an independent willing and able repair facility.

Over the 16 years I served as insurance commissioner, the department received complaints about repairs from a few repair facilities and almost none from consumers. HB 664 would upend this status quo by limiting the insurance companies’ ability to negotiate a reasonable price for repairs. The end result would be an inevitable increase in repair costs, likely followed by increasing auto insurance rates.

The governor’s veto does not mean insurance companies will have the final say in repairs, and it will not make our vehicles less safe to be on the road. Instead, HB 664 would have effectively given the final say to auto manufacturers to determine what repairs should be performed and how. Something else to consider: These procedures can require state-of-the-art sophisticated equipment that small independent repair shops may not have or be able to afford. As the governor noted, that could create a situation where auto manufacturers would be able to essentially steer business to their dealerships and crowd these small businesses out of the marketplace.

In my view it is important to maintain a system where insurers and auto repair shops can negotiate fairly. That doesn’t mean the system is perfect, or that we can’t improve it, but HB 664 is not the answer. Sweeping in all repairs of this nature doesn’t really solve anything and might affect availability of auto insurance, in addition to costs. This or any legislation of this nature without the benefit of some sort of actuarial evaluation along with safety assessments would be irresponsible.

All would be better served by working with the National Association of Insurance Commissioners to develop a possible model. This would assure extensive vetting and a uniform approach.

I would urge that this veto be sustained.

(Roger Sevigny served as New Hampshire’s insurance commissioner from 2003 to 2018.)

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