CONCORD — Insurance company execs and auto salvage shop owners celebrated while auto dealers and collision repairers condemned Gov. Chris Sununu’s veto of legislation dealing with who gets to dictate the cost of fixing accident damage to cars and trucks.
The measure (HB 664) would make it clear that auto insurers must reimburse repair shops as long as they make fixes that comply with “applicable manufacturers procedures.”
This would block the insurer from using its own collision expert to conclude a repair shop estimate was too high and would not be fully covered.
The bipartisan bill (HB 664) passed by a veto-proof majority in the House of Representatives and by a voice vote in the state Senate.
Bill sponsor Rep. Kermit Williams, D-Wilton, said it was the product of a study committee.
“We found there were a lot of differences among the body shops and the insurance companies in terms of repair requirements they were allowed or reimbursed for,” Williams told a state Senate hearing last spring.
But Sununu said the measure risked raising auto insurance premiums and could be a boon to large chain repair shops at the expense of smaller, independent businesses.
“New Hampshire citizens enjoy among the lowest auto insurance premium costs in the country. Current laws ensure safe repairs while maintaining a competitive market. This bill would increase the cost of auto insurance premiums by limiting the ability of insurers to negotiate what is reasonable in the repair process,” Sununu wrote in his veto message.
“The requirements outlined in this bill would introduce a significant disadvantage for smaller, independent repair shops and could limit their ability to compete. This limits consumer choice while raising insurance rates without the corresponding increase in safety for our citizens.”
The average auto insurance premium in New Hampshire for 2019 is $1,087, ranking it 46th highest among the 50 states.
The national average is $1,457, according to Insure.com.
Maine has the lowest average premium at $845.
Pete McNamara, president of the New Hampshire Automobile Dealers Association, said the veto is a setback for the home-grown auto industry.
“The people who built the car know how to best fix the car,” McNamara said. “This veto means the safety of 1.3 million local car owners in New Hampshire is decided by faceless accountants far outside the Granite State. I want to thank the bipartisan group of House Reps and Senators that stood up for their neighbors and passed HB 664.”
Lori Nadeau, with Birch Street Collision Center, an independent shop in Derry, fought for two years to pass this bill.
“Today’s high-tech vehicles with collision avoidance, multiple computers and different types of metals and refinishing materials requires expert repairs including manufacturer recommendations,” Nadeau said. “Scans and re-calibration of safety systems are critical to ensure occupant safety.”
State Sen. Kevin Cavanaugh, D-Manchester, said adjustments were made to try to accommodate issues raised over the bill.
“Stakeholders and lawmakers from both sides of the aisle worked hard to address concerns over unfair collision repair reimbursements to improve current practices and protect public safety. Unfortunately, Governor Sununu put the interests of big insurance companies over Granite Staters,” Cavanaugh said. “It’s a slap in the face to the hundreds of small business owners who have been asking for this relief.”
Insurance Commissioner John Elias said he’s hopeful more work can produce a better compromise next year.
“The NH Insurance Department knows that the intentions behind this bill were good. All of the parties worked very hard to come to an agreement,” Elias said in a statement.
“The Department feels that the same parties, with sufficient time in the future, will be able to work together to ensure that the bill can be designed to fulfill the important interest of industry and consumers in a way that is consistent with the original intent of the sponsors.”
Lobbyists with State Farm insurance and the New Hampshire Association of Domestic Insurance Companies had urged the Senate to kill the bill during a hearing in April.
“What this bill does is eliminate the insurer from the discussion and make them pay the choice of auto repairers and manufacturers,” said James Hatem who represents State Farm insurance.
“HB 664 eliminates the check and balance of this process. This permits manipulation, it is a recipe for abuse and it is an invitation to fraud. This is bad public policy.”
The head of the Auto and Truck Recyclers Association of New Hampshire said the bill didn’t do enough to make sure cheaper after-market or used parts could be used in the repair of older cars and trucks.
But repair shop executive Nadeau said some collision shops have gone under because owners were not getting costs recovered while having to deal with more expensive technology built into newer cars and trucks.
“The insurance companies should not be able to control how these cars are repaired. They control the price. They control the parts,” Nadeau said. “Rates have been held in this state for the past 15 years.”
