LB849

LEGISLATURE OF NEBRASKA

NINETY-EIGHTH LEGISLATURE

SECOND SESSION

LEGISLATIVE BILL 849

Introduced by Aguilar, 35

Read first time January 7, 2004

Committee: Banking, Commerce and Insurance

A BILL

1 FOR AN ACT relating to insurance; to provide requirements and

2 duties relating to motor vehicle repairs.

3 Be it enacted by the people of the State of Nebraska,

-1-

LB849

1 Section 1. (1) An insurer shall not require that a motor

2 vehicle be repaired at a specific automotive repair shop.

3 (2)(a) An insurer shall not recommend that a motor

4 vehicle be repaired at a specific automotive repair shop unless:

5 (i) A referral is expressly requested by the claimant; or

6 (ii) The claimant has been informed in writing of the

7 right to select an automotive repair shop.

8 (b) If a recommendation is accepted by the claimant, the

9 insurer shall cause the motor vehicle to be restored to its

10 condition prior to the loss at no additional cost to the claimant

11 other than as stated in the policy or as is otherwise allowed by

12 law. If the recommendation of an automotive repair shop is made

13 orally and if the oral recommendation is accepted by the claimant,

14 the insurer shall provide the following statement to the claimant

15 at the time the recommendation is made. The insurer shall also

16 send a written copy of the statement to the claimant within five

17 calendar days from the oral recommendation. The statement shall

18 include the following plainly printed in no less than ten-point

19 type:

20 WE ARE PROHIBITED BY LAW FROM REQUIRING THAT REPAIRS BE

21 DONE AT A SPECIFIC AUTOMOTIVE REPAIR SHOP. YOU ARE ENTITLED TO

22 SELECT THE AUTOMOTIVE REPAIR SHOP TO REPAIR DAMAGE COVERED BY US.

23 WE HAVE RECOMMENDED AN AUTOMOTIVE REPAIR SHOP THAT WILL REPAIR YOUR

24 DAMAGED VEHICLE. IF YOU AGREE TO USE OUR RECOMMENDED AUTOMOTIVE

25 REPAIR SHOP, WE WILL CAUSE THE DAMAGED VEHICLE TO BE RESTORED TO

26 ITS CONDITION PRIOR TO THE LOSS AT NO ADDITIONAL COST TO YOU OTHER

27 THAN AS STATED IN THE INSURANCE POLICY OR AS OTHERWISE ALLOWED BY

28 LAW. IF YOU EXPERIENCE A PROBLEM WITH THE REPAIR OF YOUR VEHICLE,

-2-

LB849 LB 849

1 PLEASE CONTACT US IMMEDIATELY FOR ASSISTANCE.

2 (3) Except as provided in subdivision (2)(a)(i) of this

3 section, after the claimant has chosen an automotive repair shop,

4 the insurer shall not recommend that the claimant select a

5 different automotive repair shop.

6 (4) Any insurer that, by the insurance policy, suggests

7 or recommends that a motor vehicle be repaired at a particular

8 automotive repair shop shall also:

9 (a) Prominently disclose the contractual provision in

10 writing to the insured at the time the insurance is applied for and

11 at the time the claim is acknowledged by the insurer; and

12 (b) If the claimant elects to have the motor vehicle

13 repaired at the automotive repair shop of his or her choice, the

14 insurer shall not limit or discount the reasonable repair costs

15 based on charges that would have been incurred had the vehicle been

16 repaired by the insurer's chosen automotive repair shop.

17 (5) For purposes of this section, claimant means an

18 insured, a first-party claimant, or a third-party claimant who

19 asserts a right of recovery for motor vehicle repairs under an

20 insurance policy.

21 (6) The Director of Insurance shall enforce this section

22 and may adopt and promulgate rules and regulations to carry out

23 this section.