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HD 2601

An Act relative to the calculation of labor rates paid by insurance companies to auto repairers in the Commonwealth

194th Legislature (2025-2026) Introduced by Ted Philips

Mass. would set a minimum hourly rate insurers must pay auto repair shops for insured collision work, based on shops' own average customer rates, with audits and dispute options.

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Bill Summary · HD 2601

Summary: Bill HD 2601 — An Act relative to the calculation of labor rates paid by insurance companies to auto repairers in the Commonwealth

What this bill is for

HD 2601 would establish a state-determined minimum hourly labor rate that insurers must pay to registered auto repair shops for insured collision repairs in Massachusetts. The rate is calculated based on the average hourly labor rate actually charged by repair shops to customers, using a defined data sample. The goal is to standardize and increase transparency around labor rates paid by insurers.

Key provisions

  • New law creation (Section 15 of Chapter 100A): The Commissioner of Insurance must set a minimum hourly labor rate that insurers must pay on insured claims for repairs performed by registered motor vehicle repair shops.
  • How the rate is calculated: The minimum rate is derived from the repair shop’s own data—specifically, the average customer-paid hourly labor rate—calculated from either:
    • 100 sequential customer-paid collision repair orders, or
    • 60 consecutive days of customer-paid collision repair orders, whichever total is smaller.
  • Effective date and audit: The declared minimum rate takes effect 30 days after the declaration, subject to insurers auditing the submitted orders. If the rate is rebutted, insurers must propose an adjustment within 30 days after the rebuttal submission.

  • Dispute and resolution: If a repairer disagrees with the insurer’s proposed minimum rate, the repairer may file an action with the Commissioner of Insurance 30 days after receiving the insurer’s proposal. In court, the insurer bears the burden to prove that the repairer’s declared rate was inaccurate or unreasonable.

  • Exclusion from cost-control programs (Section 2): Collision repair hourly labor rates set under Section 15 shall not be considered when evaluating cost-control programs under Massachusetts law (e.g., programs under section 113B and 113H).

  • Regulatory implementation (Section 3): The Division of Insurance must promulgate necessary regulations within 90 days of enactment to implement Sections 1 and 2.

Who is affected

  • Registered auto repair shops: Their customer-paid labor rates are used to determine the state minimum rate.
  • Insurance companies: Must pay at least the newly established minimum rate on insured collision repairs.
  • Commissioner of Insurance / Division of Insurance: Responsible for calculating the rate, auditing submissions, handling disputes, and issuing implementing regulations.

Practical and timeline considerations

  • The rate relies on data reported by repair shops, with an audit framework to verify accuracy.
  • The process includes a formal rebuttal and potential litigation pathway if insurers and repair shops dispute the rate.
  • Regulations to implement these provisions must be issued within 90 days of enactment; the rate itself becomes effective 30 days after declaration, contingent on audits and potential rebuttals.

Status

  • Introduced January 16, 2025; House Docket No. 2601; sponsored by Rep. Edward R. Philips. Related measures have appeared in prior sessions (e.g., H.1118 in 2023-24). The current status in the legislative process (e.g., committee referrals, amendments, or passage) is not provided here.

Compiled from official sources — confirm details with the bill’s official record.

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