The California Assembly’s Insurance Committee has unanimously
recommended the passage of A.B. 1200, a bill that would allow insurers
to discuss benefits offered by their companies during any part of the
claims process.

Originally, the bill would have added the following to the California Insurance Code’s anti-steering statute:

Nothing in this section prohibits an insurer from providing a
claimant with truthful, nondeceptive information regarding the benefits
of selecting a specific automotive repair dealer, including, but not
limited to, the availability and duration of repair warranties.


Instead, the amended version of the bill now states:

Nothing in this section restricts the ability of an insurer to explain
benefits the insurer provides as part of the claims process.

According to committee notes, the Personal Insurance Federation of
California and other bill co-sponsors believe that some body shops
“want to ‘lock-in’ a customer by depriving them of an informed choice
about alternatives, including an auto insurer’s DRP” and that the bill
“would provide an appropriate balance of the need for claimants to
understand the benefits of an auto insurance policy, including DRP
benefits, and the freedom to choose an auto repair shop without auto
insurer coercion.”

The California Autobody Association (CAA) expressed concern to the
committee that, under the bill, it’s possible for insurers to make
statements to claimants that either "disparage or discourage" the
services available in a non-DRP shop. The CAA also noted that “phrases
such as, ‘That shop didn’t make our preferred list,’ or, ‘If you take
your car to that shop, we cannot guarantee the repairs,’ or, ‘You will
have to pay the difference in the cost of the repairs’ can cause a
claimant to be ‘steered’ toward the insurer-selected auto body shops.”

The Assembly is expected to take a final vote on the measure this
month. To read more about the debate surrounding the bill, click HERE.