Lawmakers meeting in special session last week delayed the effective date of a law officials say could raise auto insurance rates by increasing the number of totaled autos.
The 18-month delay approved Wednesday will allow the authors of SB160 to re-exam-ine the act relating to salvaged vehicles - or totaled automobiles that have been restored to working order."It's hard to describe all the bad aspects of this bill. It's the worst piece of legislation I have ever seen," said Jay Fackrell, director of the state's Motor Vehicle Enforcement Division, which would handle the extra paperwork and regulatory oversight the law would generate.
He said if lawmakers hadn't dealt with the bill during the special session it would have "changed the world as we know it" by jacking up car insurance rates.
Fackrell and insurance officials don't know how the measure ever passed in the first place. But the bill's sponsor, Sen. Craig Peterson, R-Orem, acknowledged the flaws and requested that it be put on the special session call.
The bill intended to allow owners of salvaged vehicles to clear the salvage brand from the auto's title and increase the car's value through a series of inspections by "certified vehicle inspectors" licensed by the state.
In defining a salvaged vehicle, however, the law deems thousands of repairable autos as totaled. Major damage under SB160 means damage to a major component part of a vehicle requiring 10 or more hours to repair.
Fackrell explained that definition could brand a new $40,000 luxury car as totaled and ruin its resale value if any damage took 10 hours to repair. The only way the owner could clear his vehicle of salvage status would be to pay for the series of inspections outlined in the bill.
As the bill stands, auto repair shops stand to make a substantial windfall profit by declaring an auto as totaled, buying it at the reduced salvage cost, repairing it, then reselling it at an increased value once the title is cleared, Fackrell said.
But insurance companies would likely be saddled with the costs of handling an increasing number of totaled vehicles. Those costs, auto insurers have declared, would be passed on to motorists in the form of higher insurance rates.