Senate Study Bill 3154 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON TRANSPORTATION BILL BY CHAIRPERSON ZUMBACH) A BILL FOR An Act relating to standards for settlement of certain motor 1 vehicle insurance claims. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 6159XC (1) 91 th/ns

S.F. _____ Section 1. Section 507B.4, subsection 3, paragraph j, Code 1 2026, is amended by adding the following new subparagraph: 2 NEW SUBPARAGRAPH . (16) Failing to comply with section 3 507B.10. 4 Sec. 2. NEW SECTION . 507B.10 Settled motor vehicle 5 insurance claims involving aftermarket crash parts or original 6 equipment manufacturer parts. 7 1. When a first-party, partial-loss claim relating to a 8 motor vehicle is settled based on a written estimate prepared 9 by or for the insurer that includes payment for aftermarket 10 crash parts, the property insurer shall estimate the cost of 11 repairs and pay the claim based only on the cost of aftermarket 12 crash parts available from a distributor of each such part that 13 is located within one hundred miles of the repair facility 14 designated by the insured to make the repairs. The insurer 15 shall pay the cost of any modifications which may become 16 necessary when repairs are made using aftermarket crash parts 17 or parts salvaged from the crashed vehicle. 18 2. When a third-party, partial-loss claim relating to a 19 motor vehicle is settled based on a written estimate prepared 20 by or for the insurer, the liability insurer shall estimate 21 the cost of repairs and pay the claim based only on the cost 22 of new original equipment manufacturer parts unless all of the 23 following occur: 24 a. The insurer notifies the owner of the owner’s right 25 to have the vehicle repaired based on the cost of using new 26 original equipment manufacturer parts. 27 b. The motor vehicle owner gives express consent in writing 28 that aftermarket crash parts or parts salvaged from the crashed 29 vehicle may be used. 30 c. The insurer expressly agrees to pay the cost of any 31 modifications which may become necessary when repairs are 32 made using aftermarket crash parts or parts salvaged from the 33 crashed vehicle and expressly agrees to defend and indemnify 34 the owner of the motor vehicle and the repair facility against 35 -1- LSB 6159XC (1) 91 th/ns 1/ 3

S.F. _____ any claims related to repairs made using aftermarket crash 1 parts or parts salvaged from the crashed vehicle. 2 3. As used in this section: 3 a. “Aftermarket crash part” means as defined in section 4 537B.4. 5 b. “Motor vehicle” means as defined in section 321.1. 6 c. “Repair facility” means as defined in section 537B.4. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill enacts former Iowa administrative code provisions 11 relating to standards for settlement of certain motor vehicle 12 insurance claims. 13 The bill requires a property insurer to estimate the cost of 14 repairs for a motor vehicle and pay a claim based only on the 15 cost of aftermarket crash parts available from a distributor of 16 each such part that is located within 100 miles of the repair 17 facility when a first-party, partial-loss claim relating to the 18 motor vehicle is settled based on a written estimate prepared 19 by or for the insurer that includes payment for aftermarket 20 crash parts. The bill requires the insurer to pay the cost of 21 any modifications which may become necessary when repairs are 22 made using aftermarket crash parts or parts salvaged from the 23 crashed vehicle. 24 When a third-party, partial-loss claim relating to a motor 25 vehicle is settled based on a written estimate prepared by or 26 for the insurer, the bill requires the liability insurer to 27 estimate the cost of repairs and pay the claim based only on 28 the cost of new original equipment manufacturer parts unless 29 the owner of the motor vehicle gives express consent to use 30 aftermarket crash parts or parts salvaged from the crashed 31 vehicle and the insurer expressly agrees to pay the cost of 32 any modifications which may become necessary when repairs are 33 made using aftermarket crash parts or parts salvaged from the 34 crashed vehicle, and expressly agrees to defend and indemnify 35 -2- LSB 6159XC (1) 91 th/ns 2/ 3

S.F. _____ the owner of the motor vehicle and the repair facility against 1 any claims related to such repairs. 2 A person who violates a provision of the bill is subject 3 to entry of a cease and desist order, may be ordered by the 4 commissioner of insurance to pay a civil penalty ranging from 5 $1,000 to $50,000 under Code section 507B.7, and if the person 6 has a license to operate the person’s business, the license is 7 subject to suspension or revocation. 8 -3- LSB 6159XC (1) 91 th/ns 3/ 3