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VIRGINIA GOVERNOR'S PROPOSED AMENDMENT WOULD RAISE INSURANCE COSTS, STATE FARM SAYS

 VIRGINIA GOVERNOR'S PROPOSED AMENDMENT WOULD RAISE
 INSURANCE COSTS, STATE FARM SAYS
 CHARLOTTESVILLE, Va., April 14 /PRNewswire/ -- An amendment to HB-632 proposed by Gov. Douglas Wilder would lead to higher insurance costs for motorists and homeowners, State Farm Insurance Companies said today.
 "The governor's amendment would delete the word 'glass' from HB-632, which was designed to apply only to claims for glass breakage," said Brian Carlson, State Farm's regional vice president for Virginia. "The amendment would make the bill apply to all insurance claims. As a result, State Farm and other insurers could be required to pay more than the prevailing competitive body shop rates in each community on auto physical damage. In addition, insurers could not indicate products of a specific manufacturer on a repair estimate.
 "Policyholders, as consumers, pursue the best price," Carlson said. "Shouldn't the insurer be able to do that, as well?"
 Carlson said State Farm has always favored competition in the marketplace. "We oppose any move that restricts or eliminates competition," he said. "We support the right of our customers to select the shop where repairs will be made and what parts will be used."
 By restricting competition in auto crash repairs and the auto crash parts market, Carlson said, the amendment would cause auto insurance claim costs to rise.
 "Last December we announced that we are giving back $27.6 million in unneeded dividends to our Virginia customers in State Farm Mutual," Carlson said. "That reflects our ability to contain costs under the present system.
 "Over a period of time," he said, "rising claim costs resulting from the amendment would force our customers to pay higher premiums than they would under the present competitive marketplace."
 Carlson said State Farm does not oppose HB-632 in the form in which it passed the General Assembly.
 -0- 4/14/92
 /CONTACT: Brian Carlson, Eastern regional office of State Farm Insurance Co., 804-972-5100/ CO: State Farm Insurance Companies ST: Virginia IN: INS SU:


TQ -- NY036 -- 8191 04/14/92 10:58 EDT
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Date:Apr 14, 1992
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