California A.B. 1200, a widely debated bill that would alter the
state’s anti-steering code, was amended  ahead of a public hearing for
the bill slated for July 1. As amended, the bill would authorize
insurers, during the claims process, to provide claimants with specific
“truthful and nondeceptive information regarding services and benefits
available” to them.

The amended version of A.B. 1200 eliminates the previously proposed
wording, “Nothing in this section restricts the ability of an insurer
to explain benefits the insurer provides as part of the claims
process,” and adds several paragraphs to Section 758.5 of California’s
insurance code, the anti-steering statute, outlining the need for
claimants to be “informed” during the claims process.

Per the amendment, the following introduction would be added to the anti-steering statute:

Claimants whose vehicles have been damaged in accidents should be
fully informed regarding the benefits and services offered by insurance
companies as part of the claims process. Those benefits and services
include, but are not limited to, policy terms regarding repair
warranties, the type of replacement parts used in the repair, the
anticipated time to repair the damaged vehicle, the anticipated costs
associated with the repairs, and the quality of the workmanship.

Claimants benefit because being informed about the benefits and
services offered by insurance companies allows them to make meaningful
choices regarding the repair process and the automotive repair dealer
to be used.


Insurers should present that information in a truthful and nondeceptive manner.


The amended version of the bill also reiterates that insurers may
discuss “benefits and services” in the anti-steering code section
outlining exceptions to the rule, “No insurer shall suggest or
recommend that an automobile be repaired at a specific automotive
repair dealer.”

The Collision Repair Association of California (CRA) and the California
Autobody Association (CAA) both have said they would continue to oppose
the bill unless it was amended, and the CRA said the term “benefits”
must be removed from A.B. 1200.

“The term ‘benefits’ opens the steering door a mile wide,” CRA lobbyist
Richard Steffen said. “I don’t care how you rewrite this bill, if
‘benefits’ remains in the language, steering will be sanctioned by
state law.”

After the latest round of changes to the bill, Steffen reiterated the
CRA’s opposition in a letter to the Senate Banking, Finance and
Insurance Committee, which was scheduled to hold the July 1 hearing.

"A.B. 1200 would allow an insurer to steer claimants to the insurer’s
favored shops without disclosing that it has a working relationship
with these shops," Steffen stated in the letter. "A.B. 1200 is a bad
business model for consumers."

In another letter to the committee, CAA Executive Director David
McClune said the bill should be held in committee until the complex
issues surrounding steering in the state can be dealt with properly by
legislators and the California Department of Insurance, which is
working on its own set of anti-steering regulations (click HERE to read more).

"The CAA is very concerned that A.B. 1200, as proposed, would instead
allow insurers to legally ‘steer’ the insured or claimant to an insurer
preferred repair shop even after an informed consumer has clearly made
a choice as to where the vehicle should be repaired," McClune’s letter
stated.

CRA President Lee Amaradio said that insurers will have a “death lock” on the shop selection process if the bill passes.

To read the bill, click HERE (proposed additions to the anti-steering statute are in italics).

Click HERE for a previous story about the bill.

Click HERE to download a copy of Steffen’s letter to the committee.

Visit www.calautobody.com for more about the CAA’s opinion on the bill. Visit www.cra-ca.com for the CRA’s opinion.