Wednesday, 30 November 2005 17:00

Shop owners complain to state senate panel

In spite of the fact that California passed SB 551, a statute that was designed to stop steering in the state, several autobody shop owners showed up to testify about their continuing problems with steering at the Senate Banking, Finance and Insurance Committee Oversight hearing on November 23. 

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The purpose of the hearing, chaired by Senator Jackie Speier (D-8th District), was to evaluate how effectively the Department of Insurance (DOI) has been operating in the areas of enforcement, administration and consumer services - the autobody industry included. Attending were shop owners, CAA, insurance companies and department personnel including Insurance Commissioner John Garamendi and DOI staff member Tony Cignarale. Also in attendance was Senator Dave Cox.

Senator Speier expressed frustration with several issues that affect the collision repair industry: paint capping, steering, and labor rate surveys.

Regarding steering, Speier stated: "We didn't run that bill (SB 551 passed in 2003) through the legislature with the intent to have steering continue to go on."

Continued Speier: "I don't think this is a tough issue to resolve. I think there's a simple fix out there. What is disturbing to me is that there are so many complaints that have been filed with the department apparently without a response."

Garamendi on the defensive

Garamendi defended his department, explaining that every complaint received in his office has been or is in the process of being investigated. Regarding the paint capping, Cignarale reported that there had only been seven complaints. The reason for this may be two-fold. Some shop owners have given up making complaints because after they take the time to fill out the forms, the results are unsatisfactory - ultimately not worth the time.

Secondly, again and again, shop owners expressed fear of reprisals from the insurance companies.

Standing up for the consumer

Gene Crozat, owner, G&C Autobody, Santa Rosa, spoke first before the committee. He brought up the issue of paint capping, citing that it is an illegal practice in California. The insurance companies have refused to pay any more than $350 on an estimate for paint and materials, regardless of the actual paint and material expenses borne by the shop. Garamendi agreed to look into the issue. Cignarale then stated that "If there is arbitrary capping of paint and material, we will act accordingly in that."

Crozat also testified that consumers are treated unfairly by their insurance companies, being forced to come up with money out-of-pocket to assure proper repairs. He has helped his customers go to small claims court over 250 times to force the insurance companies to pay the "fair and reasonable" labor rate his shop charges, winning all but 16 cases. Each time the judge found that his repair charges were fair and reasonable, ordering the insurance companies to reimburse the consumer for the additional amount they spent to have their vehicles repaired to pre-accident condition.

In addition to small claims court, Crozat revealed that he had filed over 800 complaints with the DOI, with little or no action taken on the part of the Department to rectify the complaints.

Crozat is a hero - Speier

At this point, the DOI representatives tried to impugn the validity of the complaints because so many of them came from G&C Autobody and three other shops. Senator Speier took exception to this implication. She called Crozat a hero, for helping his customers get justice.

"These are four body shops that have the guts to speak up where others don't because they're afraid they're going to lose business.

"Who has time to do all that - preparing the paperwork and going to small claims court over and over again? I believe Mr. Crozat is a hero, not a crank.

"I don't think anyone should have to go to small claims court to get their cars fixed." Speier indicated that since 234 were found in favor of the plaintiff, something was apparently wrong with the process.

The hearing continued for over two hours, at times becoming contentious. Other shop owners spoke about steering and labor rate surveys, including Matthew Blake, owner of the autobody shop to which some of Crozat's customers were being steered. Blake indicated that although he and Crozat are business "enemies," they stood together in their concern for fair and quality collision repair.

In the end, the question remained: What more can the autobody industry do now? CAA, among others, will meet with industry representatives on these issues and continue to push for a fair resolution, according to Executive Director David McClune.


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