An act relating to motor vehicle repair claims. Be it enacted by the General Assembly of the Commonwealth of Kentucky

SECTION 0. A NEW SECTION OF SUBTITLE 9 OF KRS CHAPTER 304 IS CREATED TO READ AS FOLLOWS:

(1) As used in this section:

(a) "Claimant" means an insured party or a third-party claimant;

(b) "Deceptive referral" means any trade practice by which a consumer's choice is changed, swayed, or limited from what the consumer would or has chosen to do to another party by misleading statements, omissions, threats, deceptions, promises, or inducements;

(c) "Request or require" means any act to influence a claimant's decision; and

(d) "Usual and customary rate" means the labor rate that the general public pays for similar repairs on similar motor vehicles in the same geographic area of the state.

(2) An insurer shall inform a claimant immediately upon notice of a claim that he or she has the right to choose the repair facility of their choice to repair a damaged vehicle. An insurer shall not re-direct, refer, or otherwise influence a claimant's choice of a repair facility.

(3) All claims paid by an insurer for any loss on a motor vehicle or any claim for damages to a motor vehicle shall be paid to the claimant, or to a repair facility that has the signed authorization of the claimant, by check, electronic transfer, or other means that provides immediate access to the funds. An insurer shall not limit or discount the amount that the insurer pays for the repair on the basis that the repair would have cost less if it had been made at a particular garage, repair shop, or other vendor, or in a particular location, specified by the insurer.

(4) The labor rate for the repair of motor vehicle damages paid by an insurer shall be based on the usual and customary rate for such repairs.

(5) An insurer or automobile physical damage appraiser shall not request or require that appraisals or repairs should or should not be made in a specified facility or repair shop. When a claimant has chosen a repair facility, any attempt to change or restrict the claimant's decision shall cease.

(6) (a) All appraisals shall include on the heading of the appraisal the following notice, printed in not less than ten (10) point, boldfaced type: "NOTICE: UNDER KENTUCKY LAW, THE CONSUMER AND/OR LESSEE HAS THE RIGHT TO CHOOSE THE REPAIR FACILITY TO MAKE REPAIRS TO THEIR MOTOR VEHICLE. NO ONE SHALL USE INTIMIDATION OR COERCIVE TACTICS TO ALTER THE CONSUMER'S CHOICE."

(b) The notice outlined in paragraph (a) of this subsection shall also appear in the same manner on any evidence of proof of financial responsibility or security concerning any policy of insurance issued in the Commonwealth.

(7) An insurer or any of its representatives shall not request or require any insured or third-party claimant to use a specific person or business for the provision of automobile physical damage repairs, automobile physical damage appraisals, automobile glass replacement, automobile parts, or glass repair service.

(8) An insurer or any of its representatives shall not engage in deceptive referral practices which state or imply that a particular repair shop, facility, vendor, or supplier must be used for motor vehicle repair.

(9) Any physical damage appraiser preparing an estimate of damages on a motor vehicle shall:

(a) Conduct a thorough inspection of the damaged vehicle; and

(b) If the appraisal is not completed by a repair facility, the person writing the appraisal shall leave an estimate of the damages in a legible form with the repair facility where the vehicle is located.

(10) (a) A person who alters or changes an estimate of repair damage on a vehicle shall make a physical inspection of that vehicle.

(b) A person, other than the original appraisal preparer, agreeing to the terms of the original physical damage estimate shall physically inspect the vehicle damage before making such an agreement.

(c) Personnel directly employed by an insurer as an adjuster or appraiser may communicate with the repair facility which prepared the appraisal, but if there is any dispute over the appraisal, the insurer's employee shall inspect the vehicle to attempt to resolve the dispute.

(d) Any person altering a physical damage appraisal shall be licensed to conduct business within the Commonwealth.