Kentucky Legislation to Stop Steering Practices

HB 207 is set to end Kentucky insurance steering practices. Well, what exactly is steering, anyhow?

Say that Joe has been in a car accident. It’s a very trying time in a person’s life, full of stress, uncertainty, and sometimes physical pain. However, for the purposes of this example, let’s say that Joe got out of the accident free of injuries. He was fortunate, and all the safety features in his car left him unscathed.

The car on the other hand wasn’t as lucky. It was heavily dented on the right side, and the bumper is hanging loose. The car is going to need some work done in order to get it back on the road again. In the meantime, Joe will rent a car, because he needs to get back to work.

When he goes to file a claim with his insurance company, they give him a list of preferred businesses that do auto repairs. This is called steering, because the insurance company is steering the policyholder towards a predetermined list of repair shops chosen by them.

New Legislation

If you’re paying for your insurance policy, why should you only be allowed to go to certain businesses? Perhaps you know of a body shop near your area that offers the best prices in town, but it’s not on your insurer’s list.

According to OnlineAutoInsurance.com, “Requiring policyholders to go to a business preferred by insurers is called ‘steering,’ a practice that has met much recent resistance from legislators around the U.S. However, some insurers simply offer listings of repairers to policyholders without telling them they can choose to go to body shops outside of the list, effectively steering them towards those listed businesses without flouting regulations.”

So, perhaps it’s not even required of policyholders to only go to the preferred businesses, but the insurer can certainly make it look that way. HB 207 will change the way things work.

Under this law, the insurance companies will still be able to hand consumers a list of preferred businesses. However, insurers will be required to clearly state that the choice is left to the policyholder.

Claims appraisals will have to have the following addendum attached, “Notice: Under Kentucky law, the consumer and/or lessee has the right to choose the repair facility to make repairs to his or her motor vehicle.” With this notice in place, it will be near impossible to mislead a policyholder with regards to their repair shop options.

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