Groups Claim Legislation Would Jack up Car Repair, Insurance Costs

A coalition representing Massachusetts' property and casualty insurers yesterday urged Governor Maura Healey to use her line-item veto authority to strike the outside section on an auto body labor rate from the Fiscal Year 2027 state budget, warning that the provision would increase the cost of repairing vehicles and ultimately drive up auto insurance premiums for Massachusetts families.

The coalition said the proposal runs counter to the Governor's longstanding commitment to making Massachusetts more affordable for residents and businesses.

"Governor Healey has consistently recognized that affordability is one of the defining challenges facing Massachusetts families," said Christopher Stark, Executive Director of the Massachusetts Insurance Federation. "A line-item veto of the auto labor rate language would reinforce that commitment by preventing a special-interest provision from increasing costs for millions of drivers. At a time when every household is watching its budget, government should not be adopting policies that make everyday expenses even higher."

This language would establish a pathway to a government-mandated auto body labor rate, an approach that is unprecedented nationwide. According to the Massachusetts Insurance Federation, the American Property Casualty Insurance Association, and the National Association of Mutual Insurance Companies, no state currently mandates a minimum auto body labor rate, and labor rates in Massachusetts have continued to rise through normal market competition without evidence of market failure or consumer harm.

The Legislature's own Auto Body Labor Rate Advisory Board found that market-based labor rates in Massachusetts currently range from approximately $43 to $53 per hour for body labor and $45 to $80 per hour for mechanical labor. Rather than allowing prices to continue to be determined through negotiations between insurers and repair facilities, the budget language would substitute government price-setting for market competition.

"Competition, not government price fixing, has served Massachusetts consumers well," said Jonathan Schreiber, Assistant Vice President of State Affairs for the American Property Casualty Insurance Association. "This provision would establish a precedent that no other state has embraced, while guaranteeing that higher repair costs are ultimately passed on to drivers through higher insurance premiums. We respectfully ask Governor Healey to preserve the competitive marketplace that has benefited consumers for years."

Industry analysis estimates that every $10 increase in a mandated labor rate would increase insurance premiums by approximately $38 per insured vehicle annually. During legislative discussions, proponents advocated for increases approaching $80 per hour above current rates. For many Massachusetts households with multiple insured vehicles, those additional costs could amount to hundreds of dollars each year at a time when affordability remains a top concern.

The coalition also noted that Massachusetts is already among the most expensive states in the nation for vehicle repairs. Artificially increasing labor costs through government mandate will only make repairs—and the insurance premiums that pay for them—even more expensive for consumers.

"Massachusetts has worked hard to build a competitive insurance marketplace that benefits consumers," said Sean McLaughlin, Regional Vice President for the National Association of Mutual Insurance Companies. "the auto labor rate provision moves the Commonwealth in the wrong direction by replacing market negotiations with a government mandate that will increase costs without demonstrating any corresponding consumer benefit.

“Governor Healey can prevent that outcome with a targeted line-item veto," he added.

The coalition further cautioned that higher mandated repair costs could have unintended consequences beyond insurance premiums. As repair costs rise, more damaged vehicles are likely to be declared total losses because repair costs exceed vehicle values, resulting in fewer vehicles being repaired and returned to the road. The organizations also noted that available data does not demonstrate a meaningful relationship between higher labor charges and higher technician wages, with Massachusetts technicians already earning wages that compare favorably with those in states that have higher overall repair costs.

"The Governor has an opportunity to protect consumers without affecting the rest of the state budget," Stark said. "A line-item veto of the auto body labor rate language would prevent unnecessary increases in repair costs and insurance premiums while preserving a competitive marketplace that has worked for Massachusetts drivers. We respectfully urge Governor Healey to strike this provision from the budget."