Bill Restricting Generic Parts Defeated In Georgia – Brief Article
A committee of Georgia legislators has defeated a bill that would have placed restrictions on insurers’ use of generic auto parts to repair autos damaged in collisions. The Georgia House Insurance Committee killed the proposal by a vote of 11 to 2.
The bill would have severely limited the use of generic parts of vehicles that are less than 3 years old.
The National Association of Independent Insurers (NAII), which testified before the committee last year, said the bill would have resulted in higher prices for generic parts and original equipment manufacturer, or brand-name, parts.
Georgia’s proposal follows a $1.2 billion civil verdict against State Farm for requiring the use of aftermarket parts for its policyholders. State Farm has appealed the verdict, but temporarily suspended the use of aftermarket parts. Nationwide has also suspended the use of aftermarket parts.
Currently, Georgia law requires a statement on repair estimates disclosing that the estimate is based on an aftermarket part’s price. Meanwhile, lawsuits are also pending against other insurers, including federal suit filed against State Farm, CNA, Liberty Mutual, Allstate, Geico, Safeco and USAA and their subsidiaries. The Hartford and Travelers have been named in a separate action. Nationwide, only eight states have required policyholders’ written consent before aftermarket parts are used and other states have taken a variety of approaches. Massachusetts, for example, requires insurers to consider aftermarket parts before OEM parts.
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