Wednesday, 28 September 2022

Bill strengthens law protecting consumers against insurers' 'auto steering'

SACRAMENTO – Preventing California’s consumers from being “steered” away from the auto body repair shop of their choice when they are involved in a car accident – that’s the goal of SB 1167, a new bill introduced by state Sen. Patricia Wiggins (D-Santa Rosa).


“Car accidents are an unfortunate and frightening experience for any driver and this situation shouldn’t be aggravated by an insurance agent who is asking you 20 questions about why you have chosen a particular auto body repair shop over their ‘recommended’ or pre-selected repair shops,” Wiggins said.


Existing law prohibits automobile insurers from “steering” a policyholder to specific automotive repair shops. “Steering” occurs when an insurer requires an individual’s car to be repaired at a particular auto body repair shop and/or suggests or recommends that his/her car be repaired at a specified auto body repair shop. SB 1167 seeks to clarify existing law prohibiting an insurer from steering a policyholder to a specific auto repair shop, thereby allowing the consumer to select an auto body repair shop of their choice.


“My office has received complaints from constituents about some common statements insurers make to steer policyholders to certain repair shops such as, ‘we won’t guarantee the repairs if you take your car to that repair shop,’ or ‘if you go there, you will have to pay additional costs,’ ” the senator said. “If statements like that are being made, apparently there is some confusion about the intent of the law which prohibits an insurer from ‘suggesting’ or ‘recommending’ a particular repair shop.”


SB 1167 provides that when a policyholder first reports vehicle damage to an insurer, the insurer shall determine if the policyholder has selected an auto repair facility prior to providing any information regarding a program or a facility that performs auto body repairs. If it is determined that the policyholder has selected a repair facility, the representative of the insurer shall cease, or not engage in, any discussions regarding a program or a facility that performs auto body repairs.


“I want to make sure that consumers aren’t frightened into taking their cars someplace other than their preferred auto repair shops because their insurers claim they won’t guarantee the work,” Wiggins said. “These claims are unfounded and disingenuous.”


The purpose of the law is to allow car owners the freedom of choice in selecting an auto body repair shop, but the reality is that insurers discourage policyholders from going to repair shops outside of their network.


This network includes “direct repair programs” which are essentially pre-selected auto body repair shops approved by the insurer where labor rates and repairs are predetermined in a presumed effort to keep costs down. However, many auto repair shops allege that these repair programs could compromise the integrity of auto body repair and could force shop owners to perform substandard repairs.


SB 1167 will be assigned to a Senate policy committee later this month.


{mos_sb_discuss:2}

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