Chafee rejects bill that lets auto body shops sue insurers

Posted: 6/26/2012 9:56:54 AM

Governor Chafee has nixed a bill passed by the General Assembly that would allow auto body shops the right to sue insurance companies if they don’t reach an ‘agreed’ price for labor costs.

The Governor vetoed the bill, which snuck through the General Assembly at 3 a.m. on the last day of session, and issued a letter late Monday evening at 10:15 p.m.

“I think the governor’s veto probably saves the average motorist $160 a year,” Senator Dawson Hodgson told the WPRO Morning news with Tara Granahan and Andrew Gobeil. Hodgson explained that if the bill had been improved insurance companies would have to raise rates to pay higher labor costs.

Hodgson said the bill was bad for consumers. “The reason that is so controversial is there is no contractual relationship with the auto body shop and the insurer. You and your insurer are the ones who have the contract so you are allowing a third party to insert themselves in to something they were really not a participant in,” said Hodgson.

He asserted that the bill just granted favors to the politically connected. ”We do not elect individually politically connected companies and give them a better deal. It is just not what government is for.”

More alarming than the bill explains Hodgson is the way in which the bill was passed. “It would be a legitimate criticism to say any leadership to put things through at 3 a.m. knows that people are too tired to fight if they are willing to in the first place and more importantly who is watching at that time,” said Hodgson.