Requires transparency of automobile repairs

House Bill 945 enacts a new section of Louisiana Revised Statutes Title 22, establishing consumer protections and transparency requirements in automobile repair transactions involving insurance claims. The statute creates three principal regulatory requirements: insurers must affirmatively disclose to policyholders their right to select their own repair shop and services and that preferred shops are optional; insurers are prohibited from offering incentives or discounts conditioned on using preferred shops, from requiring use of preferred shops, or from engaging in steering conduct as defined in R.S. 40:2870; and repair shops must obtain written consent from policyholders before using non-Original Equipment Manufacturer parts or non-standard repair procedures, disclose when such parts or procedures are employed, and require policyholders to sign a release acknowledging risks and accepting liability. The statute further assigns liability to insurers when they pressure consumers into accepting substandard repairs, making the insurer liable for resulting safety issues.

The practical effect of this legislation extends to insurance policyholders, automobile repair facilities, and insurance companies operating in Louisiana. Policyholders gain enforceable rights to select their repair provider without financial penalty or insurer pressure, and they receive detailed notice of alternatives to Original Equipment Manufacturer parts before such alternatives are installed. Repair shops must implement written consent and disclosure procedures for non-standard work. Insurance companies face legal restrictions on their ability to manage claim costs through preferred provider networks or financial incentives, eliminating common industry practices that channel claims to particular shops or promote lower-cost repair alternatives. The statute creates potential tort liability for insurers if pressure tactics result in safety-defective repairs, shifting financial risk from consumers and repair shops to insurers for outcomes of coerced repair decisions.

This statute operates within Louisiana's existing insurance regulatory framework under Title 22 and incorporates by reference the definition of steering from R.S. 40:2870, which addresses unfair or deceptive practices in insurance. The provision creates new substantive rights and duties that override customary contractual relationships between insurers and preferred repair networks. The imposition of tort liability for insurer pressure regarding repair quality raises questions regarding the statute's interaction with existing contractual relationships between insurers and policyholders, the scope of insurer liability for repair decisions made by independent third-party shops, and whether the statute may conflict with freedom of contract principles in insurance policy drafting, though the statute itself does not address these doctrinal tensions explicitly.