What you should know about anti-steering laws

By Jeffrey Steele on November 6th, 2010

Auto Insurance

What is an anti-steering law? The definition differs, depending on who you talk to, says Bob Passmore, senior director with Property Casualty Insurers Association of America (PCI), based in Des Plaines, Ill. The common intent of such a law is to prohibit attempts by auto insurance companies to "steer" or otherwise influence its policy holders to use particular auto repair shops.

Laws are different in each state

Anti-steering laws have been around a long time. Most states have them, but some are much more restrictive than others, Passmore says. For instance, in New York, insurance companies are prohibited not just from directing customers to specific car repair shops, but even from providing information regarding auto repair unless it's specifically requested by the customer, he says.

California had a similar law until recently, Passmore adds. "They added some language to the law, essentially allowing the insurer to provide information about the benefit of programs they have to offer, but it's still the consumers' choice," he says.

Insurance companies caught in the middle

The crux of the matter is insurance companies paying for car repairs don't want to force auto repair shops on their customers. "That makes for an unhappy customer," Passmore says.

"However, insurers are held responsible for what happens in the repair process. So what they've done over the years is develop programs to help them better serve their customers, but at the same time get a better handle on what's happening in that repair process, since they are responsible."

PCI doesn't quibble with laws that ensure consumers can choose where they have their cars repaired. "But our argument is what good is having a choice unless you are allowed to have complete information?" he adds.

"If insurers can't answer questions and provide advice, which consumers typically want in that situation, then a choice with limited options isn't much of a choice."

The upside to an insurance company referral

There are many upsides to choosing an auto repair shop recommended by your insurance company, Passmore says. First, insurers know the community and work with the same auto repair shops every day. They develop programs focused on delivering the highest-quality repair and highest-quality experience to their customers. That means they can help you through a process that you're not likely to experience often.

There aren't many downsides to choosing your insurance company's suggested shop, he adds. "Some would say insurers have an incentive, that they're just looking for opportunities to cut costs, give you a cut-rate repair job and get you out of the shop," he says.

"But what could be less efficient than forcing an ineffective repair on a consumer? A bad repair will mean that you just have to fix it again, which takes more time and twice the cost. Second, it will result in an unhappy customer."

He cites a recent J.D. Power and Associates study, which indicates consumers are more apt to shop for a new carrier after they've had a claim, whether they're happy with the claim response or not. That means there's no incentive for an insurer to cut corners on repairs to save money, because the customer having the repair done could be a 20-year customer, or one with 20 years as a customer ahead of him.

Benefits of picking your own auto repair shop

There are also benefits to choosing your own repair shop. You are likely to know and be comfortable with the owners and employees of the shop. They in turn know you and more importantly, your car. And they may provide more competitive pricing to you as a long-time customer who has shown loyalty to the shop.

If you don't have a car repair shop, take these steps to find a good one.

  • First, ask friends and colleagues for recommended shops.

  • Second, visit a few of these shops to see whether they seem well organized.

  • Third, talk to staff, including manager and technicians, to see how well you communicate with them.

  • While at the shop, take a fourth step and talk to other customers about quality of work experienced, and the integrity of the staff.

  • And ask about shop guarantees, methods of payment accepted, as well as certification and membership in associations like Automotive Service Excellence, or Society of Automotive Engineers, which demonstrates competence.


Consumers should be free to go to the repair shop of their choice, Passmore says.

"But they should also have the opportunity to get complete information from their insurer, have questions answered, and be able to learn what repair options the insurer can offer them."

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