The bill asks the legislature to declare that "Insurers are using unfair tactics to steer consumers, including suggesting or implying that the auto body shop selected by the consumer is inferior or inconvenient and that existing laws regulating the consumer's right to choose an auto body repair shop are weak."
Puts "teeth" behind existing laws
Jack Molodanof, CAA's Sacramento lobbyist and an attorney said, "This bill will strengthen the existing laws and put some teeth behind them. It empowers both consumers and shops to take action if they are harmed by an insurer's steering practices."
The first hearing on the bill is expected March 24. You can follow the progress of SB 551 (or any other California legislation) on the web at www.leginfo.ca.gov.
Introduced February 20, 2003
An act to add Section 758.5 to the Insurance Code, relating to auto insurance.
Legislative Counsel's Digest
SB 551, as introduced, Speier. Insurance: auto body repair shops.
This bill would prohibit an insurer from recommending that an automobile be repaired, or not be repaired, at a specific auto body repair shop, unless the claimant specifically requests a referral. It would allow a claimant or repair shop damaged by a violation of this provision to recover damages and costs, as specified.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The People of The State of California Do Enact as Follows:
SECTION 1. This act shall be known as the "Auto Body Repair Consumer Choice Act of 2003." SEC. 2. The Legislature finds and declares the following:
(a) Thousands of California consumers each year require repair of their vehicles as a result of collision or other damage.
(b) As a result of automobile collisions and other damage, many consumers make insurance claims.
(c) California consumers are entitled to select an auto body repair shop of their choice to repair auto body damage.
(d) Insurers are steering consumers to auto body shops chosen by the insurer and not the consumer.
(e) Insurers are using unfair tactics to steer consumers, including suggesting or implying that the auto body shop selected by the consumer is inferior or inconvenient. (f) Existing laws regulating the consumer's right to choose an auto body repair shop are weak.
(g) Accordingly, the Legislature has determined that it is necessary to strengthen the existing auto body repair consumer choice laws.
SEC. 3. Section 758.5 is added to the Insurance Code, to read: 758.5. (a) It is unlawful for an insurer, including an affiliate or subsidiary of an insurer, in connection with a claim, to direct, suggest, or recommend that an automobile be repaired, or not be repaired, at a specific auto body repair shop, unless the claimant specifically requests a referral from the insurer. (b) An insurer that violates this section shall be liable for any damages suffered by the claimant or auto body repair shop, including compensatory, special, and exemplary damages. Any injured party may bring an action for damages. The prevailing party in any action brought pursuant to this section shall be awarded reasonable attorney's fees and costs.