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RI POLITICS

Governor McKee vetoes bill that would add costs at auto body shops

While he said he recognizes the intent of the legislation was to protect consumers, the overall legislation would add costs “without adding commensurate benefits”

Rhode Island Governor Dan McKeeGretchen Ertl/The Boston Globe

PROVIDENCE — Governor Dan McKee cleared the desk Friday afternoon after he vetoed his third bill this year regarding legislation that would have made changes to the Insurance Unfair Claims Settlement Practices. He said those changes would have added costs to consumers.

The legislation was introduced in the House by Representative William O’Brien, a North Providence Democrat and deputy majority leader, with five co-sponsors, and was introduced in the Senate by Senator Maryellen Goodwin, a Providence Democrat.

The changes would have added two types of costs that would be required by consumers to pay to auto body shops when repairing a vehicle covered by insurance.

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However, according to the National Association of Insurance Commissioners, Rhode Island ranks No. 7 in the nation for the highest auto insurance premiums.

McKee said that while he recognizes that the intent of the legislation was to protect consumers and that there were portions of the bill that he could support, he said the overall legislation would add costs “without adding commensurate benefits to consumers.”

The legislation would allow auto body shops to charge “industry standard markup” fees. These fees were not capped in the legislation.

The legislation said that refusing to pay an auto body repair shop for “documented necessary sublet services performed in the overall repair process, including costs and labor incurred to research, coordinate, administrate or facilitate the necessary sublet service, and an automotive industry standard markup” would constitutes an unfair claims practice.

It went on to say that some examples of sublet services “include, but are not limited to;” towing, transportation, suspension, alignments, electronic calibrations, diagnostic work, mechanical work, and paid charges to release a vehicle.”

McKee said that “neither” term used regarding costs — “markup” or “sublet services” — are “defined and there are no clear limitations of when those costs might be appropriate.”

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“As we look to restart our economy after the pandemic, we cannot implement measures that may drive costs even higher for consumers and small businesses. Our focus should be reducing costs to help our economy grow,” wrote McKee in his veto message.

“Now is the time to identify what is driving the rising cost of auto body repair and insurance premiums in Rhode Island, including the role insurance companies can play in lowering rates,” continued McKee. “I remain committed to working with all Rhode Island businesses, including auto body shops. I am open to working with Legislators on language that would address the remaining issues in the legislation such as industry software and the salvage vehicle process.”

McKee’s predecessor, former governor and current U.S. Commerce Secretary Gina Raimondo, also vetoed an auto body shop bill in 2019 that would have allowed insurers found under the Unfair Claims Settlement Practices Act to be liable for three times the amount of damages.


Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her on Twitter @alexagagosz.