BILL NUMBER: SB 1167 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 7, 2008
AMENDED IN SENATE MARCH 11, 2008
INTRODUCED BY Senators Wiggins and Migden
FEBRUARY 7, 2008
An act to amend Section 758.5 Sections
758.5 and 1874.87 of the Insurance Code, relating to vehicle
repair.
LEGISLATIVE COUNSEL'S DIGEST
SB 1167, as amended, Wiggins. Insurance: vehicle repair.
Existing law provides that no insurer shall require that an
automobile be repaired at a specific automotive repair dealer, as
defined.
Existing law further provides that no insurer shall suggest or
recommend that an automobile be repaired at a specific automotive
repair dealer, except as specified.
This bill would provide that when a claimant first reports vehicle
damage to an insurer, the insurer shall ask the claimant if
he or she has selected an auto repair dealer. If the claimant
responds in the affirmative, then the claimant has chosen an
automotive repair dealer for purposes of existing law
inform the claimant of his or her right to choose an automotive
repair dealer by stating specified language . This bill would
also prohibit an insurer from engaging in any discussion regarding a
program or a facility that performs auto body repairs, as specified,
after a claimant has chosen an automotive repair dealer.
Existing law requires specified automobile insurers to provide
each insured with an Auto Body Repair Consumer Bill of Rights either
at the time of application for an automobile insurance policy or
following an accident that is reported to the insurer.
This bill would instead require that document to be provided at
both of those times.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 758.5 of the Insurance Code is amended to read:
758.5. (a) No insurer shall require that an automobile be
repaired at a specific automotive repair dealer, as defined in
Section 9880.1 of the Business and Professions Code.
(b) When a claimant first reports vehicle damage to an insurer,
the insurer shall ask the claimant if an automotive repair
dealer has been selected. If the claimant responds in the
affirmative, then the claimant has chosen an automotive repair dealer
pursuant to subdivision (d). inform the claimant at
the time he or she makes the claim of his or her right to choose an
automotive repair dealer by stating the following:
"WE ARE PROHIBITED BY LAW FROM REQUIRING THAT REPAIRS BE DONE AT A
SPECIFIC AUTOMOTIVE REPAIR DEALER. YOU ARE ENTITLED TO SELECT THE
AUTO BODY REPAIR SHOP TO REPAIR DAMAGE COVERED BY US."
(c) (1) No insurer shall suggest or recommend that an automobile
be repaired at a specific automotive repair dealer unless either of
the following applies:
(A) A referral is expressly requested by the claimant.
(B) The claimant has been informed in writing of the right to
select the automotive repair dealer.
(2) If the recommendation is accepted by the claimant, the insurer
shall cause the damaged vehicle to be restored to its condition
prior to the loss at no additional cost to the claimant other than as
stated in the policy or as is otherwise allowed by law. If the
recommendation of an automotive repair dealer is done orally, and if
the oral recommendation is accepted by the claimant, the insurer
shall provide the information contained in this paragraph, as noted
in the statement below, to the claimant at the time the
recommendation is made. The insurer shall send the written notice
required by this paragraph within five calendar days from the oral
recommendation. The written notice required by this paragraph shall
include the following statement plainly printed in no less than
10-point type:
"WE ARE PROHIBITED BY LAW FROM REQUIRING THAT REPAIRS BE DONE AT A
SPECIFIC AUTOMOTIVE REPAIR DEALER. YOU ARE ENTITLED TO SELECT THE
AUTO BODY REPAIR SHOP TO REPAIR DAMAGE COVERED BY US. WE HAVE
RECOMMENDED AN AUTOMOTIVE REPAIR DEALER THAT WILL REPAIR YOUR DAMAGED
VEHICLE. IF YOU AGREE TO USE OUR RECOMMENDED AUTOMOTIVE REPAIR
DEALER, WE WILL CAUSE THE DAMAGED VEHICLE TO BE RESTORED TO ITS
CONDITION PRIOR TO THE LOSS AT NO ADDITIONAL COST TO YOU OTHER THAN
AS STATED IN THE INSURANCE POLICY OR AS OTHERWISE ALLOWED BY LAW. IF
YOU EXPERIENCE A PROBLEM WITH THE REPAIR OF YOUR VEHICLE, PLEASE
CONTACT US IMMEDIATELY FOR ASSISTANCE."
(d) Except as provided in subparagraph (A) of paragraph (1) of
subdivision (c), after the claimant has chosen an automotive repair
dealer, no insurer, or representative of the insurer, shall do either
of the following:
(1) Engage in any discussion, or continue any discussion,
regarding a program or a facility that performs auto body repairs,
until such time as the repairs to the claimant's automobile have been
completed.
(2) Suggest or recommend that the claimant select a different
automotive repair dealer.
(e) Any insurer that, by the insurance contract, suggests or
recommends that an automobile be repaired at a particular automotive
repair dealer shall also do both of the following:
(1) Prominently disclose the contractual provision in writing to
the insured at the time the insurance is applied for and at the time
the claim is acknowledged by the insurer.
(2) If the claimant elects to have the vehicle repaired at the
shop of his or her choice, the insurer shall not limit or discount
the reasonable repair costs based on charges that would have been
incurred had the vehicle been repaired by the insurer's chosen shop.
(f) For purposes of this section, "claimant" means a first-party
claimant or insured, or a third-party claimant who asserts a right of
recovery for automotive repairs under an insurance policy.
(g) The powers of the commissioner to enforce this section shall
include those granted in Article 6.5 (commencing with Section 790) of
Chapter 1 of Part 2 of Division 1.
SEC. 2. Section 1874.87 of the
Insurance Code is amended to read:
1874.87. (a) Each insurer subject to this article shall provide
each insured with an Auto Body Repair Consumer Bill of Rights
either at the time of application for an automobile
insurance policy or and following an
accident that is reported to the insurer. If the insurer provides the
insured with an electronic copy of a policy, the bill of rights may
also be transmitted electronically.
(b) The bill of rights shall be a standardized form developed by
the department with the purpose of presenting easy-to-read facts for
auto insurance consumers. The content of the bill of rights shall be
determined by the department, and at a minimum, shall contain
information about all of the following:
(1) A consumer's right to select an auto body repair shop for auto
body damage covered by the insurance policy and that an insurer may
not require this work to be done at a particular auto body repair
shop.
(2) The consumer's right to be informed about auto body repairs
made with new original equipment crash parts, new aftermarket crash
parts, and used crash parts.
(3) The consumer's right to be informed about coverage for towing
services, and for a replacement rental vehicle while a damaged
vehicle is being repaired.
(4) Toll-free telephone numbers and Internet addresses for
reporting suspected fraud or other complaints and concerns about auto
body repair shops to the Bureau of Automotive Repair.
(c) The department shall consult with the Bureau of Automotive
Repair in determining the information to be contained in the bill of
rights.