Arizona Glass Shops Should Watch This Bill

A new bill has been introduced by Senator Livingston in Arizona, and if it passes there could be changes ahead for businesses throughout the state. The new bill, also referred to as SB1226, would impact any shop that requires an assignment of benefits (AOB) when replacing or repairing auto glass through a customer’s insurance company.

SB1226 would create new limits around what a valid assignment of claim looks like. Some of the bill’s text indicates a more difficult process for customers to assign their benefits to auto glass companies in Arizona.

    • According to the bill, if passed, a valid assignment must meet all of the new requirements after a loss has occurred, some of them include:
      The insured files a claim for coverage;
    • After the claim has been filed and within 3 days after signing the assignment agreement, the insured notifies the insurer of the proposed assignment, provides the insurer with a copy of the proposed agreement, an initial estimate and a description or summary of the services or repairs to be provided;
    • Provides information concerning any lien unless the amount of damages or loss is $2,500 or less; and
    • The auto glass company must provide a form of assignment agreement to the insured that discloses the key provisions of the contract.

An interesting point to SB1226 involves its zero cash back provision.

“A potential assignee does not offer, direct, pay, promise, allow or provide the insured or other party with, and the insured or other party does not accept, any compensation, gift or other valuable consideration as an inducement to sign an assignment agreement or in connection with any agreement to retain the assignee to provide services or repairs to remediate a property or casualty claim,” a portion of the bill reads.

Currently the bill is likely to be reviewed in the next Senate Finance Committee meeting that takes place this month.

To view the bill’s full text, click here.

Arizona’s state statute defines unfair claim settlement practices, the following can be found in its text.

“As a property or casualty insurer, failing to recognize a valid assignment of a claim. The property or casualty insurer shall have the rights consistent with the provisions of its insurance policy to receive notice of loss or claim and to all defenses it may have to the loss or claim, but not otherwise to restrict an assignment of a loss or claim after a loss has occurred,” a portion of the statute reads.

To view the entire statute, click here.

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1 Response to Arizona Glass Shops Should Watch This Bill

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