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California Legislators Considering Four Collision Repair Bills

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Four bills affecting collision repair in California remain alive in the state legislature. Here’s a breakdown:

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1. The full state Senate will vote on Senate Bill 1059 (Sen. Carole
Migden, D-San Francisco), sponsored by the Collision Repair Association
of California, sometime during the second or third week of May.
Collision repair trade associations and consumer groups support the
bill, while insurers and aftermarket organizations oppose it.

S.B. 1059 would prohibit an insurer from requiring the use of
aftermarket parts on new vehicles unless the insurance policy required
their use. The bill applies to new cars (vehicles during their first
three years since the sale date) and is limited to parts affecting the
engine, cooling system and air conditioning system, as well as
corrosion protection. Insurers would be required to disclose
aftermarket parts mandates at the time the policy is offered for sale
and on the declarations page.

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Consumers Union, publisher of Consumer Reports, hailed
the bill for providing consumers with critical information on vehicle
insurance coverage. CRA member Lee Amaradio of Faith Quality Auto Body
has stirred insurers into action. His comments on the high return rate
for aftermarket parts have prompted some insurers to ask the CRA for
more data on what aftermarket suppliers are associated with these
returns and why the returns are being made.

2. S.B. 1371 (Sen. Lou Correa, D-Santa Ana), sponsored by the
California Autobody Association and supported by the CRA, proposes a
definition for insurer capping of paint and material charges. According
to the CRA, this measure attempts to sanction “accepted industry
methodologies” used to calculate paint and material charges. The CRA
wants full certainty that insurers will not be able to adopt or alter a
methodology to produce results that fail to reflect the true cost of
paint and materials.

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The Department of Insurance has created a working group of insurers and
repairers that has tentatively agreed to capping language that differs
slightly from S.B. 1371. However, both S.B. 1371 and the workshop
language hinge on the term “accepted industry methodology.” The bill
has been approved by the Senate and is next set to be heard in the
Assembly Insurance Committee.

3. S.B. 1167 (Sen. Pat Wiggins, D-Santa Rosa) was a tough anti-steering
bill sponsored by the CRA until it became obvious that the measure
didn’t have enough votes to be passed by the Senate Banking, Finance
and Insurance Committee. Wiggins has amended the bill to require that
the insurance commissioner form a task force to study issues addressed
by Insurance Code Section 758.5 (the anti-steering statute). The CRA is
working with Wiggins to determine how the bill might be most effective
in reducing unfair and illegal insurer practices. The measure will be
heard in Senate Appropriations within the next two weeks.

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4. The CRA, the CAA and the California Motor Car Dealers Association
oppose Assembly Bill 2825 (Assemblywoman Wilma Amina Carter, D-62nd
District), saying it is duplicative of current law. A.B. 2825 requires
an automotive repair dealer, once repairs are completed, to provide a
signed, written certification to the customer that the crash parts
identified on the itemized written estimate were installed on the
vehicle.

The bill is similar to the author’s legislation that Gov. Arnold
Schwarzenegger vetoed last year. Given that the state Bureau of
Automotive Repair updated invoice requirements through rulemaking last
year, the CRA believes the purpose of A.B. 2825 is unclear. The
promoters of A.B. 2825 are trying to kill the S.B. 1059, the CRA says;
however, the association hopes to work with Carter to improve the
measure so that its advances consumer protections in the manner of S.B.
1059 rather than remain a bill that creates paperwork without a purpose.

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