Non-partisan consumer advocacy group Consumer Watchdog says it’s asking California Assemblywoman Mary Hayashi (D-Hayward) to amend A.B. 1200, which would amend the state insurance code’s anti-steering statute to allow insurers to discuss policy "benefits" any time during the claims process, wording many believe will allow for steering. The bill has been passed by the Assembly and awaits Senate approval.
In a letter sent to Hayashi July 20, the group explained that a recent amendment to A.B. 1200 "effectively guts the prohibition on steering and now allows insurers to ‘hard sell’ a policyholder on the insurer-controlled repair shop, even after the policyholder chooses an independent repair shop."
California’s anti-steering law was enacted in 2003 and prohibits insurers from "suggesting or recommending" body shops once the person has chosen a repair shop. A.B. 1200 would allow insurers to, at any time during the claims process, "badger customers with reasons to use the insurer-preferred shop," Consumer Watchdog claims.
The group says it’s concerned about the bill because it believes steering can lead to "shoddy workmanship" and endanger drivers’ safety. Consumer Watchdog also said that DRP contracts encourage repairers to cut corners in order to save the insurer money and earn a spot on their "preferred provider" list.
"California legislators were right to stop this kind of anti-consumer steering six years ago, and nothing has changed that would make the relationships between insurers and body shops any better for consumers," said Consumer Watchdog staff attorney Todd Foreman. "If anything, lawmakers should be adding consumer protections to the anti-steering law, not gutting the existing rules."
The bill was recommended for passage by a Senate committee earlier this month. Both the Collision Repair Association of California (CRA) and the California Autobody Association (CAA) oppose the bill.
To view Consumer Watchdog’s letter, click HERE.
For more information about A.B. 1200, click HERE.