Louisiana Senate Bill Would Ban Insurer Steering Incentives

Bill would also mandate written consent for non-OEM parts.

A Louisiana state senator has introduced legislation that would prohibit auto insurers from offering incentives to use preferred repair shops, require collision repair facilities to obtain written consent before installing non-original equipment manufacturer parts, and shift liability to insurers if they pressure policyholders into accepting “substandard” repairs.

Sen. Stewart Cathey (R) filed Senate Bill 511 (SB 511) on March 31. The Senate read the bill a second time and referred it to the Committee on Insurance on April 1, where it remains pending. The measure would add a new section, R.S. 22:1289.2, to the state’s insurance code and would take effect Aug. 1, 2026.

The bill marks an expansion of Louisiana’s regulatory posture on insurer–shop relationships. The state’s existing anti-steering statute under R.S. 22:1892(D) — strengthened in 2019 by House Bill 411, which barred insurers from recommending a particular shop without disclosing that consumers are not obligated to use it — focuses on prohibiting coercion and intimidation. SB 511 goes further by attacking the economic mechanics of direct-repair programs themselves, banning any discounts and incentives to channel claims into preferred shop networks.

Broad Definition of Steering

Cathey’s bill defines “steering” as any communication by an insurer to a policyholder or third-party claimant that directly or indirectly influences them, or that offers them the option to use a repair shop that is a “preferred carve-out,” is in a strategic relationship with the insurer, is owned by the insurer, or is controlled by or under contract with the insurer to provide repairs.

That definition is sweeping enough to reach not only overt referrals but the routine practice of presenting a list of in-network options to a customer at first notice of loss.

The bill requires insurers to disclose to policyholders and third-party claimants that they have the right to choose their own repair shop and services, and that any preferred shops or services the insurer offers are optional and not a condition of claim payment.

It also explicitly prohibits insurers from offering incentives or discounts to policyholders or claimants for using preferred shops, requiring the use of preferred shops, or steering policyholders or claimants toward them.

The legislation imposes new disclosure and consent obligations on repair shops when non-OEM or nonstandard parts are used.

A shop must disclose the use of such parts and must obtain written consent from the policyholder or third-party claimant before installing them. The required written consent must include a signed release in which the consumer acknowledges the risks of non-OEM or nonstandard parts and accepts liability for their use.

The provision is paired with a liability-shifting clause that operates in the opposite direction. If an insurer pressures a policyholder or third-party claimant into accepting substandard repairs through the use of non-OEM or nonstandard parts, liability for any resulting safety issues resides with the insurer rather than the shop or the consumer, under the proposed statute.

State-Level Activity on Parts Disclosure

Louisiana’s measure arrives as similar legislation moves in other state capitals. In Utah, HB 119 cleared the legislature in March and was signed by the Governor. That bill requires insurers to notify policyholders at issuance and renewal that aftermarket crash parts may be used in covered repairs and updates the disclosure language required on repair estimates when non-OEM parts are specified. The Utah measure, however, was substantially narrowed during the legislative process — early provisions establishing diminished value coverage, a parts-quality standard, and a private right of action against shops were stripped before final passage.

New York lawmakers reintroduced similar non-OEM parts disclosure and OEM procedures bills in early 2025, continuing a multi-year push in that state.

The Louisiana bill is more aggressive than the Utah enrolled version on two fronts: it requires affirmative written consent and a signed liability release from the consumer for non-OEM parts, rather than the disclosure-only model in Utah’s enrolled HB 119, and it includes the explicit insurer liability shift for safety issues tied to substandard repairs.

SB 511 awaits a hearing in the Senate Insurance Committee. As an originating Senate measure, it would need to clear that committee, win passage on the Senate floor, then move through the House before reaching Gov. Jeff Landry’s desk.