South Carolina Senate Takes Up Auto Glass Bill

The South Carolina Senate is set to consider legislation that would limit restrict the ability of glass repair businesses to make referrals to other repair facilities. That bill could create inefficiencies in the existing system and could raise costs for consumers, according to the Property Casualty Insurance Association of America.

The bill, H.B. 4042, has already cleared the House and is currently before the South Carolina Senate Banking & Insurance Committee. The bill would make it an unfair trade practice for motor vehicle repair businesses that administer insurance claims to have that business referred to itself. It would also bar glass repair businesses from using consumer information to solicit business.

"This bill would severely limit auto insurers' ability to choose business practices that best serve their customers, limit choices available to consumers for repairing damaged auto glass and potentially increase costs that impact insurance premiums," said Bob Passmore, PCI's senior director for personal lines, in a statement. "The ability of glass repair facilities to help insurers handle glass claims have shown benefits to consumers. While PCI does not explicitly endorse specific business practices such as using third-party administrators or direct repair programs which help streamline the repair process, we do support the ability of insurers to develop and offer innovative products and programs to their customers."

PCI said glass repairs cost 15% less on average when a network provider is used. That figure dips to 14% in South Carolina, according to data collected by PCS.

"In our view, this bill isn't about using a third-party administrator; it's about limiting the ability of the insurer to offer information on repair options and referrals to direct repair networks," Passmore said. "Like almost every state, South Carolina has laws and regulations that protect the vehicle owners' right to choose who repairs their vehicles. PCI supports the consumer's right to choose, but what good is that right without complete information on the options available, or if an option available elsewhere isn't available in your state?"

Efforts to reach PCI for additional comment were not immediately successful.

South Carolina is still feeling the effects of Hurricane Irene, which struck the state last year. At the time, Eqecat put damages in North and South Carolina at between $200 million and $400 million (Best's News Service, Aug. 29, 2011).

In 2010, the top five writers of private passenger auto insurance in South Carolina, according to BestLink, were: State Farm Group, which had a market share of 24.74%; Allstate Insurance Group, with 15.73%; Nationwide Group, with 9.74%; Berkshire Hathaway Insurance Group, with 8.63%; and USAA Group, with 6.27%.