BILL NUMBER: AB 1200	CHAPTERED
	BILL TEXT

	CHAPTER  387
	FILED WITH SECRETARY OF STATE  OCTOBER 11, 2009
	APPROVED BY GOVERNOR  OCTOBER 11, 2009
	PASSED THE SENATE  SEPTEMBER 4, 2009
	PASSED THE ASSEMBLY  SEPTEMBER 9, 2009
	AMENDED IN SENATE  AUGUST 18, 2009
	AMENDED IN SENATE  JULY 14, 2009
	AMENDED IN SENATE  JUNE 25, 2009
	AMENDED IN ASSEMBLY  APRIL 29, 2009

INTRODUCED BY   Assembly Member Hayashi

                        FEBRUARY 27, 2009

   An act to amend Section 758.5 of the Insurance Code, relating to
motor vehicle insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1200, Hayashi. Motor vehicle insurance: direct repair programs.

   Existing law prohibits insurers from requiring that an automobile
be repaired at a specific automotive repair dealer. Under existing
law, an insurer may suggest or recommend a specific automotive repair
dealer under certain specified circumstances.
    This bill would authorize an insurer to provide a claimant with
specific truthful and nondeceptive information regarding the services
and benefits available to the claimant during the claims process, as
specified, and would make related and conforming changes.


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) (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) An insurer may provide the claimant with 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.
   (3) If an insurer's recommendation of an automotive repair dealer
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 mail or provide the notice required by this
paragraph within five calendar days from the acceptance of the
recommendation. The written notice required by this paragraph shall
include the following statement plainly printed in no less than
10-point type in a separate and freestanding document:

"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. WE RECOMMEND YOU CONTACT ANY OTHER AUTOMOTIVE REPAIR DEALER
YOU ARE CONSIDERING TO CLARIFY ANY QUESTIONS YOU MAY HAVE REGARDING
SERVICES AND BENEFITS. 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."

   (c) Except as provided in subparagraph (A) of paragraph (1) of
subdivision (b), or as to information of the kind authorized by
paragraph (2) of subdivision (b), after the claimant has chosen an
automotive repair dealer, the insurer shall not suggest or recommend
that the claimant select a different automotive repair dealer.
   (d) 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.
   (e) 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.
   (f) 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.
    (g) The changes to this section made by the act enacted during
the 2009-10 Regular Session that amended this section shall only
apply to actions filed on or after January 1, 2010.