The bill amends Iowa's insurance law to establish new standards for settling certain motor vehicle insurance claims, specifically regarding the use of aftermarket crash parts and original equipment manufacturer (OEM) parts. It adds a new subparagraph to Section 507B.4, making it a violation for insurers to fail to comply with the newly introduced Section 507B.10. This section outlines the requirements for property insurers when settling first-party, partial-loss claims, mandating that they estimate repair costs based solely on aftermarket parts available within 100 miles of the designated repair facility. Additionally, insurers must cover any necessary modifications when using these parts or salvaged components.

For third-party, partial-loss claims, the bill stipulates that liability insurers must base their repair cost estimates on new OEM parts unless the vehicle owner provides written consent to use aftermarket parts or salvaged components. In such cases, the insurer must also agree to cover any modifications needed and defend the vehicle owner and repair facility against related claims. Violations of these provisions can result in cease and desist orders, civil penalties ranging from $1,000 to $50,000, and potential suspension or revocation of the violator's business license.

Statutes affected:
Introduced: 507B.4