California Senate Hears Anti-Steering Legislation, Introduces Capping Bill - BodyShop Business

California Senate Hears Anti-Steering Legislation, Introduces Capping Bill

The Collision Repair Association of California’s (CRA) two sponsored bills, Senate Bills 1059 and 1167, were heard by the Senate Committee on Banking, Finance and Insurance on April 2, coinciding with CRA’s Legislative Day.

The CRA says insurers successfully convinced the California Chamber of Commerce to oppose S.B. 1167, which mandates that once a vehicle owner has chosen a repair facility, the insurer cannot attempt to influence that decision. The Personal Insurance Federation of California (PIFC), the American Insurance Association (AIA) and the Association of California Insurance Companies (ACIC) have voiced their opposition to the legislation sponsored by Sen. Patricia Wiggins (D-Santa Rosa). The three organizations represent more than 90 percent of auto insurers doing business in California. The associations say that the current law, S.B. 551, which passed in 2003, guarantees California consumers the right to decide where their car is fixed after an accident.

The Chamber’s letter of opposition to Wiggins stated, “The California Chamber of Commerce OPPOSES your S.B. 1167, which inappropriately limits informed consumer choice by restricting the information that insurers can provide to policyholders in regards to their auto repair options.”

The letter also said that the bill “seeks to restrict informed consumer choice by prohibiting insurers from even discussing additional repair options with the consumer if the consumer has already selected a body shop.”

S.B. 1059, sponsored by state Sen. Carole Migden (D-San Francisco), states that an insurer may not require use of aftermarket parts, nor may it limit payment to aftermarket parts when factory parts are used, in the repair of a vehicle under factory warranty. The CRA was informed that CAPA will be opposing the bill but its reasoning has yet to be articulated.

In other legislation, state Sen. Lou Correa (D-Santa Ana) has introduced Senate Bill 1371, which would prohibit an insurer from recommending, applying or including an arbitrary cap when adjusting labor, parts or materials, including paint, on a repair estimate.

The California Department of Insurance (DOI) has told insurers that they cannot cap paint and materials costs, according to the California Autobody Association (CAA). The DOI communicated this in workshops held in August 2007 and August 2006. While the DOI is considering regulations to prevent capping costs, S.B. 1371 offers a legislative solution should the DOI not implement regulations.

The state assembly has again introduced a bill that would require body shops to certify in writing that the crash parts listed on the final repair bill are those that were actually installed on the vehicle.

Assembly Bill 2825 is similar to a bill that Gov. Arnold Schwarzenegger vetoed in October 2007. The CAA successfully argued that automotive repair dealers are required to identify crash parts in the estimate to the customer before vehicle repairs begin, as well as in the final invoice to the customer after repairs are completed. The CAA also noted that a shop making a false written statement on the estimate or invoice is committing fraud and can face criminal prosecution and severe penalties.

“While I am generally supportive of consumer protection laws,” Schwarzenegger said in October of A.B. 1483, “the provisions of this bill are duplicative of existing law and therefore unnecessary. In fact, these provisions may lead to increased expenses and decreased efficiency at automotive repair dealers, which could result in reduced customer service and higher costs passed onto the consumer. For this reason, I am unable to sign this bill.”

The CAA is urging all repairers to voice opposition to A.B. 2825 by contacting the governor and Assembly Business and Professions Committee members.

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