CONSUMER ALERT: Unfair Claims Settlement Practices

JUNE 3, 2021

FOR IMMEDIATE RELEASE

CONTACT: Jennifer Bruce (Jennifer.bruce@arkansas.gov • 501.371.2622)

CONSUMER ALERT: Unfair Claims Settlement Practices

McClain: Arkansans should know their rights as consumers

LITTLE ROCK, Ark. – Arkansas Insurance Commissioner Alan McClain released the following statement reminding insured Arkansans seeking automobile repairs that they have a choice:

“Consumers should know that insurers cannot require a claimant to have an automobile repaired at a specific repair shop. If an insurer inaccurately informs you that your vehicle’s coverage is contingent upon utilizing a  particular preferred vendor, they are in violation of the law and will be subject to penalties.”

Under Arkansas law and Insurance Department Rules, consumers have a choice in where they get their vehicle repaired following an accident. Under the Trade Practices Act of the State Insurance Code, an insurance company may not require that repairs be made by a particular contractor, supplier, or repair shop as a condition of payment of a claim, and doing so is an "unfair claims settlement practice." Ark. Code Ann. §23­66-206(13)(O). AID Rule 43 also governs such transactions.

While insurers may provide a list of preferred repair shops, consumers are not obligated to select one of those preferred vendors. Arkansas consumers maintain the freedom to choose the repair shop to which they take their vehicle.

McClain encourages Arkansans to know their rights as insurance consumers. “Our primary mission is consumer protection,” McClain said. “Please don't hesitate reach out to us at the Arkansas Insurance Department if you have complaints or questions regarding an insurance policy. We are here to protect you.”

For more information regarding AID Rule 43 regarding Unfair Claims Settlement Practices, visit here.

Consumers may file a complaint here.

For other questions regarding insurance, please visit insurance.arkansas.govor call 800-852-5494.

About the Arkansas Insurance Department:

The Arkansas Insurance Department, a division of the Arkansas Department of Commerce, was created on March 7, 1917, by an Act of the Arkansas General Assembly. For more information on the Arkansas Insurance Department, please visit https://insurance.arkansas.gov, follow us on Twitter at https://twitter.com/ARInsuranceDept and Facebook at https://www.facebook.com/ArkansasInsuranceDepartment.