Oklahoma bill to increase total loss threshold brought by legislators with insurance ties

An Oklahoma bill that would increase the threshold a vehicle must reach to be considered a total loss from 60% to 70% passed the Senate Business and Insurance Committee last week. 

SB1920 was filed by two state legislators with ties to the insurance industry, one of whom has a history of changing bills on the Senate floor. 

Sen. Aaron Reinhardt’s (R-District 37), one of the bill sponsors, told the committee the bill modernizes the cost of repair. 

“It reflects current repair economics,” Reinhardt said. “Repair costs continue to rise dramatically based on inflation, technology advances, higher labor and parts costs, this is a benefit to consumers.” 

He said the bill protects consumers and would make the threshold comparable to neighboring states. 

“Insurance carriers and insurance department everyone agrees this needs to be done,” he said. 

No one else spoke in favor of or against the bill. 

Mark Tedford (R-District 69) also sponsored the bill. Both Tedford and Reinhardt were the focus of a recent article questioning property insurance’s influence on lawmaking in the state published by Oklahoma Watch, a nonprofit news site. 

Tedford also was a sponsor on a storage fees bill that became law Nov. 1. The original bill, SB641, passed through committee and later was changed to include storage cap language while on the Senate floor just prior to a vote. 

Reinhardt and Tedford also sponsored a bill last year that bans consumers from assigning benefits to auto body shops.

The Oklahoma Auto Body Association (OKABA) and 13 auto body shops have called the two passed bills unconstitutional in separate lawsuits.

Peyton Bell, a plaintiff in one of the cases, owns Bell Auto Body and was the verifying signer in the suit. He told Repairer Driven News on Tuesday that the Attorney General’s Office has filed to dismiss the case. A hearing that could determine whether the case will move forward is set for next month. 

In South Dakota, a bill that would ban insurance companies from declaring a motor vehicle a total loss unless the cost of repairs meets or exceeds 75% of the actual cash value was approved by the Senate on Tuesday and moved to the House. 

SB 227 was introduced by Sen. Steve Kolbeck (R-District 2) on Feb. 4. After a 4-2 approval by the Senate Transportation Committee, it was passed to the Senate floor, where it passed 27-6. 

The bill allows insurers to declare a total loss under the 75% threshold only if they receive a written request from the vehicle owner. 

Justin Smith, lobbyist for the South Dakota Auto Body Association (SDABA), said the association supports the bill on behalf of customers who have encountered these issues. 

“This problem only really started to develop in the last five or so years, and it’s only with a couple of outlier insurance carriers who are national and started to do this on a more frequent basis,” Smith said. 

He said the bill gives customers the power to decide whether they want to accept a settlement from the insurance company. 

“We are not here today arguing that insurance carriers are bad guys, or have issues that are fraudulent or anything like that,” Smith said. “It is a consumer protection measure to give you control over your motor vehicle.”

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Oklahoma Sen. Aaron Reinhardt’s (R-District 37), testifies before the Senate Business and Insurance Committee last week