Oklahoma Sen. Lonnie Paxton (R-District 23), an insurance agent has introduced a bill that caps storage fees, labor rates and restricts the max amount of billable hours for tear-downs and administrative work.
Paxton, an insurance agent, introduced two bills (SB1853 and SB1741) last year that critics said would have limited what collision shops could charge for storage fees. SB1853 also would have restricted what shops could charge for multiple standard procedures. Both bills failed to make it through the legislative session.
The newest bill, SB784, sets the market labor hourly rate for tear-downs of a total loss vehicle at $65 per hour and restricts the Insurance Commissioner’s ability to adjust the rate until July 1, 2030. The rate would be adjusted by the commissioner every five years thereafter, the bill says.
Tear-downs are also limited to a four-hour maximum total time, which shouldn’t be a flat rate, the bill says. It also says that prior to performing a tear-down the repair shop shall provide a written estimate to the customer or responsible party with an anticipated duration of the tear-down process.
The bill also requires repair shops to prepare a written itemized estimate with all fees, charges and costs for the proposed work prior to any work starting on the vehicle. An estimate date of the completion of service should also be included.
Repair shops would be required to keep record on the estimate and communication whether written or verbal had with the customer or responsible party, the bill says. This should also include whether the customer consented to the estimate and work. The record should include the date, time, manner of consent, telephone number used to speak with the customer nad the names of the persons giving and receiving consent.
Administrative charges should also not exceed the $65 market labor hourly billed rate and should not exceed four-hours, the bill says.
Gary Wano, owner of GW & Son Autobody and former chairman of the Oklahoma Auto Body Association, said while a majority of tear downs and associated administrative work likely can be completed under four hours, there are jobs that take longer.
“There are times when you need to go much deeper,” Wano said.
Wano said each vehicle impact creates different scenarios. A vehicle of the same make and model hit in the same spot could have different damage due to the speed or road conditions at the time of the impact, he said.
The time spent dismantling a vehicle also depends on what an insurance company needs completed to document the procedures, he said. He said the organization and documentation needed by some insurance companies can add time to the process. This can include the organization of parts and taking pictures, he said.
Administration time researching the car and gathering OEM documentation alone can take more than four hours, Wano said.
Wano also said most repair shops already attempt to give consumers a clear estimate prior to doing any work. However, a complete itemized estimate prior to dismantling a vehicle could be impossible in some situation, he said.
California Bureau of Automotive Repair (BAR) is also proposing regulation changes that would require collision repair shops to give consumers an itemized estimate prior to performing a teardown.
Andrew Batenhorst, California Autobody Association Glendale/Foothill Chapter president and Pacific BMW Collision Center body shop manager, previously said the regulation changes will make giving estimates more difficult for shops.
“Let’s say for example, we take the bumper, fender, and headlight off and now we see there is structural damage,” Batenhorst said. “Now we need to measure the frame or maybe now we need to remove the battery, then you have to stop. You can’t continue with the diagnosis.”
Oklahoma’s new bill also limits the maximum daily storage rate allowed by repair facilities for the first ten calendar days. This includes:
- Maximum storage rates for the first 10 days would be:
- $39 for a single vehicle including a motorcycle, automobile, or light truck up to 20 feet in length
- $47 for a single vehicle or combination of vehicles more than 20 feet in length but less than 30 feet
- $55 for a single vehicle or combination of vehicles more than 30 feet and up to 8 feet in width
- $70 for a single vehicle or combination of vehicles more than 30 feet in length and more than 8 feet in width
Storage rates could increase to $75 on the 11th day, the bill says.
The bill states storage rates may be increased by 12% every four years by the Insurance Commissioner.
Wano said each facility has different costs for storage based on their particular expenses. This could change depending on where a property is located, how many spots a repair shop has available, security measures in place and electric vehicle needs.
Safety guidelines say electric vehicles should be stored 50 feet away from other vehicles on all sides, Wano said.
“If you take a look at that, it takes up 20 potential spaces,” Wano said.
Repair shops would be required to provide written invoices and respond to request for invoices concerning the pickup, release or delivery of a motor vehicle on its premises within 8 business hours.
All fees, charges and costs, not including applicable sales taxes, for service work and storage shall be provided to the vehicle owner in a stand-alone document in writing of sufficient size and contrast to be clearly seen and readable, the bill says. The document shall be signed by the vehicle owner and copay signed document shall be provided to the vehicle owner.
The bill also restricts repair shops from marking up charges assessed by a wrecker or towing service.
Share This:
Related
Clinton Mora is a reporter for Trending Insurance News. He has previously worked for the Forbes. As a contributor to Trending Insurance News, Clinton covers emerging a wide range of property and casualty insurance related stories.