STATE HOUSE – Auto airbags are intended to protect drivers in a crash, but only if they are in good functioning condition.

Legislation passed by the General Assembly and now the law in Rhode Island is designed to protect vehicle owners by establishing a comprehensive set of airbag anti-fraud policies. The legislation enacted into law without the governor’s signature is based on model language developed by the National Conference of Insurance Legislators (NCOIL).

Rep. Brian Patrick Kennedy (D-Dist. 38, Hopkinton, Westerly) and Sen. Joshua Miller (D-Dist. 28, Cranston, Warwick) sponsored the identical House and Senate bills – (2010-H7301aa) and (2010-S2514aa). The law became effective in late June.

“In many cases, drivers have the mistaken belief that the airbag in their car is operational, when, in fact, there have been situations in which airbags that were deployed after an accident have not been replaced by the repair shop, despite representations to the insurer and the vehicle owner that an airbag was restored,” said Representative Kennedy. “There have been cases in the U.S. in which the airbag was never properly replaced, and even worse, the cavity was fraudulently refilled with insulation, Styrofoam pellets, plastic garbage bags or a cheap, black market airbag that does not fit the specific vehicle model.”

The new law sets specific disclosure and record-keeping requirements and imposes tough penalties for those who commit fraud involving motor vehicle airbags.

The purpose of the airbag fraud law is: 1) to target unscrupulous repair shops that utilize stolen or black market airbags; 2) to target those individuals who deal on the black market by stealing non-deployed airbags from motor vehicles by criminalizing this activity; 3) to target repair shops that fraudulently charge consumers and insurers for the replacement of airbags when the repair was unnecessary, as well as those repair shops that fraudulently charge consumers and insurers for new airbags when the shop actually utilized a cheap stolen airbag, and 4) to target those who replace an airbag with either the wrong airbag for the vehicle or who fill the airbag cavity with nothing more than junk and charge the consumer and the insurer for a legitimate airbag.

Those who violate the new law will be subject to penalties established under the state’s deceptive trade practices statutes, and will also be guilty of a felony punishable by a fine of between $1,000 and $2,000 and imprisonment of up to two years. Any person whose violation results in serious bodily injury or death can be imprisoned for up to 10 years and fined up to $100,000.

“The legislation does allow for the use of non-deployed airbags that have been salvaged from other similar vehicles and have been properly stored and installed in the proper vehicle. During the 2009 ‘Cash For Clunkers’ program, there were many reclaimed airbags and other automobile parts that were recovered for reuse in automobile repairs,” said Senator Miller.

Anyone who sells or installs a salvaged airbag must disclose that information to the vehicle purchaser or owner. A strict record-keeping process is required by the new law which establishes a paper trail that provides a degree of assurance to consumers, insurers and law enforcement that a legitimately purchased airbag was utilized in the repair.

The National Conference on Insurance Legislators, which Representative Kennedy previously served as president for a term, studied the issue of fraudulent airbags throughout 2009 and adopted the model act – on which the Rhode Island law is based – as a result of concerns raised by the Coalition Against Insurance Fraud.

For more information, contact:

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State House Room 20

Providence, RI 02903

(401) 222-2457