2012 -- S 2571

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LC01939

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO BUSINESSES AND PROFESSIONS -- AUTOMOBILE BODY REPAIR

SHOPS

     Introduced By: Senator Marc A. Cote

     Date Introduced: February 28, 2012

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 5-38-10 and 5-38-28 of the General Laws in Chapter 5-38 entitled

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"Automobile Body Repair Shops" are hereby amended to read as follows:

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     5-38-10. Grounds for denial, suspension, or revocation of licenses. -- The department

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of business regulation may deny an application for license or suspend or revoke a license after it

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has been granted, for the following reasons:

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      (1) On proof of unfitness of the applicant to do business as an automobile body repair

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shop;

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      (2) For any misstatement by the applicant in his or her application for license;

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      (3) For any failure to comply with the provisions of this section or with any rule or

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regulation promulgated by the commission under section 5-38-5;

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      (4) For defrauding any customer;

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      (5) For dismantling any automobile without the written authorization of the owner of the

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automobile and without providing three (3) business days advance notice to the insurer adjusting

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the claim for damage to the vehicle for the purpose of allowing the insurer an opportunity to

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appraise and photograph the vehicle prior to dismantling;

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      (6) For refusing to surrender any automobile to its owner upon tender of payment of the

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proper charges for towing storage, and work done on that automobile;

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      (7) For having indulged in any unconscionable practice relating to the business as an

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automobile body repair shop;

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      (8) For willful failure to perform work as contracted for;

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      (9) For failure to comply with the safety standards of the industry; or

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      (10) For the purchase of used vehicle parts from unlicensed entities.;

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      (11) For failure to comply with the requirements of section 5-38-30;

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     (12) For failure to provide the owner or insurer upon request with copies of invoices for

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all parts, materials and subcontracted services used in the repair of the vehicle;

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     (13) For adding a markup on towing or subcontracted services;

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     (14) For failure to permit access to the vehicle during the repair process by the appraiser

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retained by the insurer;

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     (15) For failure to permit one or more licensed appraisers from an insurer to access the

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vehicle for the purposes of an appraisal;

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     (16) For failure to provide the insurer with a true and accurate repair certification form as

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required by section 5-38-28.

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     5-38-28. Repair certification form. -- The director of the department of business

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regulation is authorized to create a work completion certification form which is executed by an

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insured and the automobile repairer and which shall certify under the penalties of perjury, the

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repairs to a particular vehicle that have actually been made. (a) On an insured repair, the insured

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and the automobile repairer shall certify in writing to the insurer, under the penalties of perjury,

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on the work completion certification form, that the repairs to the vehicle have actually been made

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in accordance with the insurers appraisal, and that the insured’s deductible has been paid. If an

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insured desires to limit the scope of repair to reduce the insured’s deductible, the amount of such

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reduction and the repairs not performed must be detailed to the insurer in writing, and the value of

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any repairs not performed must fairly reflect the amount of the reduction in the deductible paid.

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The automobile repairer is not permitted to omit repairs that may affect the safety of the vehicle.

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The insurer shall have no liability arising from the insured’s decision to limit the scope of repair.

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     (b) The insurer is not required to make payment until the executed work completion

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certification form and proof of payment of any deductible have been provided. The insurer may

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also inspect the vehicle prior to payment

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     (c) The director of the department of business regulation shall by regulation create a work

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completion certification form consistent with this section. In addition to the certifications

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described in this section, the director may require that the form contain certifications and proof

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regarding compliance with other requirements of state and federal law.

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     (d) A false statement in a certification under this section constitutes insurance fraud

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pursuant to section 11-41-29 of the general laws.

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     SECTION 2. Section 27-10.1-6 of the General Laws in Chapter 27-10.1 entitled "Motor

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Vehicle Damage Appraisers" is hereby amended to read as follows:

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     27-10.1-6. Conduct of motor vehicle damage appraisers. -- (a) Each appraiser, while

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engaged in appraisal duties, shall carry the license issued to that appraiser by the department of

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business regulation and shall display it, upon request, to an owner whose vehicle is being

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inspected, to the auto body shop representative involved, or to any authorized representative of

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the department of business regulation.

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      (b) The appraiser shall leave a legible copy of his or her appraisal with the auto body

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shop selected to make the repairs, which appraisal shall contain the name of the insurance

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company ordering it, if any, the insurance file number, the number of the appraiser's license, and

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the proper identification number of the vehicle being inspected, and notice in boldface type,

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reading as follows:

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      "PURSUANT TO RHODE ISLAND LAW, THE CONSUMER HAS THE RIGHT TO

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CHOOSE THE REPAIR FACILITY TO COMPLETE REPAIRS TO A MOTOR VEHICLE;

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AND AN INSURANCE COMPANY MAY NOT INTERFERE WITH THE CONSUMER'S

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CHOICE OF REPAIRER." All damage unrelated to the incident or accident that occasioned the

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appraisal of the vehicle, or old damage, shall be clearly indicated in the appraisal.

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      (c) The appraiser shall not obtain a competitive estimate from another auto body shop

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unless the owner of that other shop, or his or her authorized agent, has inspected the vehicle. No

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competitive estimate shall be obtained by the use of photographs, telephone calls, or in any

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manner other than a personal inspection.

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      (d) No appraiser shall request require that repairs be made in a specified auto body shop;

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however, an appraiser may provide truthful, non-coercive information about repair options

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available to an insured or claimant.

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      (e) Every appraiser shall re-inspect damaged vehicles when supplementary allowances

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are requested by the auto body shops.

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      (f) No appraiser shall receive directly or indirectly any gratuity or other consideration in

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connection with his or her appraisal services from any person except his or her employer, or, if

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self-employed, his or her customers.

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      (g) No appraiser shall traffic in automobile salvage if it is obtained in any way as a result

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of appraisal services rendered by the appraiser.

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      (h) No appraiser shall obtain an estimate from an unlicensed automobile body repair

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shop nor shall any appraiser agree on a price for repairing a damaged motor vehicle with an

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unlicensed automobile body repair shop. Nothing contained in this section shall be construed to

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preclude an appraiser from dealing with any entity not subject to the licensing provisions of

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section 5-38-4.

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     SECTION 3. This act shall take effect upon passage.

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LC01939

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO BUSINESSES AND PROFESSIONS -- AUTOMOBILE BODY REPAIR

SHOPS

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     This act would amend provisions of the auto body repair shop statute to provide for

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notice prior to the dismantling of a insured’s vehicle, would amend the conduct requirements of

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appraisers relative to where auto body repairs are made and would require a more comprehensive

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repair certification form for auto body work.

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     This act would take effect upon passage.

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LC01939

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