Saturday, 31 May 2003 17:00

Senate passes auto insurance reform legislation

The California Senate Committee on Insurance has passed Senate Bill 551, a bill that would prohibit an insurer from recommending a motor vehicle be repaired at a specific shop unless the insured requests such a referral. It allows an insured or other claimant or repair dealer to recover damages, if harmed by a violation of this provision. 

Senator Jackie Speier (D-San Francisco), chairwoman of the Senate Insurance Committee, introduced the legislation. The bill passed the committee by a vote of five to two. The legislation now moves to the Senate floor.enator

Current law in California states that while an insurer can suggest, direct or recommend a repair facility, it cannot require a claimant to receive repairs from a specific motor vehicle repair facility.

The bill is supported by the California Autobody Association and by the Automotive Services Association (ASA). A press release issued by ASA stated the association "believes it is the repair facility's inherent right to determine whether or not it desires to participate in a direct repair program."