Over the weekend, California Gov. Arnold Schwarzenegger signed S.B.
1371 (Sen. Lou Correa, D-Santa Ana), legislation designed to limit the
insurance company practice of placing “caps,” arbitrary limits, on
reimbursements for collision repairs. The bill, which will become law
Jan. 1, 2009, was backed by the California Autobody Association (CAA).
Introduced in February, S.B. 1371 was revised several times this year
as legislators attempted to define capping. In June, after revisions by
both the state’s Senate and Assembly, the Assembly finally defined
capping as “offering or paying an amount that is unrelated to a
methodology used in determining paint and materials charges that is
accepted by automobile repair shops and insurers.”
The CAA credited Correa with bringing the repair and insurance industries together to hash out the details of the legislation.
“On behalf of the CAA we would like to thank the governor, Sen. Correa,
the insurance industry and our members on getting this law passed,” CAA
President Ted Stein said.
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