Tuesday, 13 October 2009 09:15

California Assembly Bill 1200 'Pro Steering Bill' Signed into Law

After luke-warm opposition from California body shops, and disappointment from the two auto body associations, AB1200 was signed into law by the governor on the last possible day, Oct. 11.

Insurance-sponsored AB 1200 means insurers are now free to discuss with the vehicle owner, at any point during the claims process, "specific truthful and nondeceptive information regarding the services and benefits available to the claimant during the claims process. This may include, but is not limited to, information about the repair warranties offered, the type of replacement parts to be used, the anticipated time to repair the damaged vehicle, and the quality of the workmanship available to the claimant.” In strong support were the Personal Insurance Federation of California, State Farm, Allstate, and the American Insurance Association.

Numerous auto associations, including CAA, CRA, and the California New Car Dealers Association (CNCDA) have said the bill would "open the door for insurers to steer consumers to repair shops that have contractually agreed to save insurers money…"

The CNCDA said that the bill  "is in reality a Trojan horse that would allow insurers to engage in communications that the Legislature sought to prohibit with the enactment of Insurance Code Section 758.5.”

CAA opposed the measure saying it would make such statements legal, citing the use of word tracks such as "that shop didn't make our preferred list," or "if you take your car to that shop we cannot guarantee the repairs," or "you will have to pay the difference in the cost of the repairs" can cause a claimant to be steered toward the insurer-selected auto body shop.


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