Repeal of Provision Relating to Motor Vehicle Insurance Cost Reporting

Floor Speech

By:  Mary Bono Mack
Date: July 23, 2012
Location: Washington, DC

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Mrs. BONO MACK. Today, we have an opportunity to slam the car door on an obsolete provision in the United States Code requiring motor vehicle insurance cost reporting, which is of little or no use to American consumers.

I want to commend Mr. Harper of Mississippi and Mr. Owens of New York for their bipartisan work on H.R. 5859, as well as Chairman Upton and Ranking Member Waxman for their leadership in moving this legislation forward. I also want to thank my good friend and colleague, Mr. Butterfield of North Carolina, our subcommittee's ranking member, for his help with our efforts to repeal this costly and outdated provision of the law.

Additionally, just this morning, I received word that the five leading automotive trade associations in the U.S., including the National Automobile Dealers Association, are all supportive of H.R. 5859, and here's why.

In 1993, NHTSA issued a final rule requiring new-car dealers to make available to buyers a booklet containing the latest information on insurance costs. The information is updated by NHTSA annually, based on data from the Highway Loss Data Institute.

The information required by this regulation is rarely sought by consumers and its value is highly questionable. Insurance premiums are based primarily on factors that are unrelated to the susceptibility of damage to a vehicle, including the driver's age, driving record, location, and miles driven.

Additionally, a recent survey of 850 members of the National Automobile Dealers Association reported 96 percent of its dealers have never been asked by a customer--not even once--to see the insurance cost booklet that is at issue here today.

Clearly, this is yet another example of where the cost of a Federal regulation outweighs its potential benefit. As a nation, we simply cannot afford to keep doing business that way. And frankly, the current law has more problems than an old, dirty, oil-burning engine.

Today, new-car dealers face civil penalties if they do not provide, upon request, the booklet that discloses the relative cost to repair vehicles after a collision, yet the data is completely generic and skewed by averaging the repair costs of everything from fender-benders to vehicle rollovers. How is this useful information to consumers at the point of sale?

Even more troubling, this information is not always accurate or up to date. For the most part, it is simply a compilation of historical information and does not take into account new model year changes that can significantly alter how a car performs in a crash.

And finally, even the administration suggests this requirement should be eliminated. In technical comments provided earlier this year to Congress, NHTSA describes the data as, and I'm quoting now:

rarely used and not useful because the differences in rates due to loss payments are overshadowed by differences in premiums due to driver demographics, geographic location, and the relative prices of the vehicles.

In other words, the requirement is simply not working as intended, and it's become a needless cost and burden to automobile dealers nationwide.

Today, we have an opportunity to tow this clunker of a regulation to the junkyard where it belongs and to provide America's nearly 20,000 automobile dealers with some important regulatory relief.

Mr. Speaker, I reserve the balance of my time.

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Mrs. BONO MACK. In closing, I just want to strongly urge the passage of H.R. 5859. It passed unanimously out of the Energy and Commerce Committee.

Again, I would like to thank Mr. Butterfield for his hard work, and I would like to thank the staff for their hard work and for the bipartisan nature that we all approached this with. I would also like to thank my staff for their hard work.

In 1993, this insurance reporting provision probably made sense.

But today, after being road tested now for nearly 20 years and with so much information currently available to consumers simply on the Internet, the Kelley Blue Book value on this regulation is just darn near next to nothing. Let's junk it and move on.

With that, Mr. Speaker, I urge passage of this bill, and I yield back the balance of my time.

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