An anti-steering regulation that was proposed last March by the California Department of Insurance (DOI) due to continued complaints about insurer steering since Insurance Code section 758.5 (AB 1200) was amended to address the problem in 2009 has had additional amended language proposed.
“From 2009 through present day, there have been over 160 complaints related to Insurance Code section 758.5,” a statement from the DOI read. “Based upon the department’s investigation of these complaints, the department concludes that in many cases, consumers’ rights to select a repair shop have been violated under the Insurance Code. When untruthful and deceptive information is conveyed by insurers, consumers are unknowingly forced to take their automobiles to shops they may not have wanted to go to in the first place, and other competitive automotive repair shops may lose potential business, stifling the free market and consumers’ rights to select a repair shop.”
The most notable new amended language includes a whole section concerning third-party claims: “In the case of third-party claims, should a third-party insurer exercise its right to inspect the damaged vehicle, the third-party insurer shall inspect the damaged vehicle within six business days from the time the third-party insurer decides to inspect the third-party vehicle, provided the claimant makes the vehicle reasonably available for inspection by the third-party insurer. For purposes of the immediately preceding sentence, the third-party insurer’s decision to inspect the third-party vehicle shall be deemed to have been made on the date the third-party insurer provides the third-party claimant with the information required by Subdivision (e)(2) of Section 2695.5, in the event the decision is not made prior to that date.”
Under the “No insurer shall” section, the language “advising the claimant” was struck out and replaced with “‘making a statement’ to the claimant to the effect that the automobile repair shop chosen by the claimant has a record of poor service or poor repair quality, or making any other statement to the claimant with respect to the chosen shop if the statement is known to be, or should by the exercise of reasonable care be known to be, untrue, deceptive or misleading.”
Also, in the above statement, “without clear documentation in the claim file supporting those statements” was taken out in regard to if the insurer tells the claimant that the chosen shop has a record of poor service or quality.
The new proposed regulation could take effect by mid-October. Public comments are being taken through 5:30 p.m. on Oct. 11th.