CA Court Says Insurers Don't Have to Pay 100% for Non-DRP Repairs - BodyShop Business

CA Court Says Insurers Don’t Have to Pay 100% for Non-DRP Repairs

A California appeals court ruled that an insurance company is only liable for 100 percent of repair costs if the insured has repairs done at an insurer-preferred shop. The case involved an insurance policy that pays 80 percent of the cost if a repair is performed at a non-preferred shop, which the plaintiff believed violated the anti-steering statute of the California Insurance Code.

In the case – which originally was dismissed by a trial court and later appealed – policyholder Eugene Maystruck alleged that Infinity’s RSVP (Repair Satisfaction Vehicle
Program) Policy is in violation of the anti-steering code because the insurer wouldn’t pay for 100 percent of repairs performed on Maystruck’s car at a non-RSVP shop.

Specifically, Maystruck alleged the RSVP Policy, which fully covers repairs at Infinity-approved shops, violates the part of California’s anti-steering statute stating that if the insured "elects to have the vehicle repaired at the shop of his or her choice, the insurer shall not limit or discount the reasonable repair costs based on charges that would have been incurred had the vehicle been repaired by the insurer’s chosen shop."

Infinity Insurance successfully argued that the company’s 80 percent payment policy for non-RSVP repairs isn’t based on what RSVP shops charge and is therefore legal.

In her decision, Hon. Rita Miller of the Superior Court of Los Angeles County sided with Infinity.

"On its face, we find nothing in the language of section 758.5 (the anti-steering statute) that requires an insurer to pay 100 percent of the reasonable repair costs irrespective of where the vehicle is taken," Miller said. "Indeed, contrary to the plaintiff’s claim, the statute specifically provides that the only time the insurer is required to pay 100 percent of the repair costs is when the insured accepts the insurer’s recommendation to take the vehicle to a specific shop."

Miller concluded that if legislators had intended to require insurers to pay for 100 percent of repair costs regardless of where a vehicle is repaired, the anti-steering statute "would have expressly said so."

Click HERE to download a copy of the court’s case summary and decision.

Click HERE to read more about proposed changes to California’s anti-steering statute.

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