BILL ANALYSIS
AB 1179
Page 1
ASSEMBLY THIRD READING
AB 1179 (Jones)
As Amended April 27, 2009
Majority vote
INSURANCE 10-0
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|Ayes:|Coto, Garrick, Blakeslee, | | |
| | | | |
| |Charles Calderon, Carter, | | |
| |Feuer, Hayashi, Nava, | | |
| |Niello, Torres | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Adds to the Auto Body Repair Consumer Bill of Rights
a disclosure that the consumer has a right to seek and obtain an
independent repair estimate directly from a registered body
shop, even when pursuing an insurance claim for repair of the
vehicle.
EXISTING LAW :
1)Regulates the conduct of motor vehicle insurers with respect
to damage repair claims, including detailed "Fair Claims
Settlement Practices" regulations adopted by the Insurance
Commissioner.
2)Prohibits an insurer from requiring a claimant to use a
particular body shop for insured repairs.
3)Establishes an Auto Body Repair Consumer Bill of Rights, and
requires the Insurance Commissioner to determine the content
of the disclosure statement of these rights.
4)Requires the disclosure to contain, at a minimum:
a) The consumer's right to select his or her own body shop,
and that the insurer cannot require use of a specific shop;
b) The consumer's right to be informed about the use of
original equipment crash parts, new aftermarket crash
parts, and used parts;
AB 1179
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c) The consumer's right to be informed about towing
coverage and rental car coverage while a vehicle is being
repaired; and,
d) The toll-free telephone numbers and Internet addresses
for reporting fraud or complaints about auto body shops.
FISCAL EFFECT : Undetermined
COMMENTS :
1)Purpose . According to the author, "Consumers do not
understand the difference between an initial, visual only,
inspection of a damaged vehicle that is the source of an
insurer's damage assessment, and a more comprehensive,
internal examination of a vehicle conducted by a registered
auto repair dealer. Consumers may consequently accept a
settlement with an insurer, based on the incomplete damage
assessment, and only later learn that the repairs will be more
costly. This bill is intended to provide consumers with
information which will better inform their insurance
decision-making."
2)Background . The Business and Professions Code regulates
automotive repair dealers, and authorizes or requires various
responsibilities that an automotive repair dealer may perform.
However, it does not expressly prohibit other entities from
preparing written estimates of repair costs, unless those
entities are acting as an automotive repair dealer. On the
other hand, the Fair Claims Settlement Practices regulations
adopted by the Insurance Commissioner expressly recognize, and
regulate, an insurer's preparation and use of a written
estimate as part of the claim settlement process.
Repair facilities believe that consumers often do not know that
they can obtain what they believe is a more comprehensive
estimate from a body shop, and therefore end up settling
claims for less than the actual cost of repair.
3)Support . Supporters of the bill argue that it will help
insurance claimants understand the difference between the
estimate of the cost of repairs prepared by an insurer as
compared to the estimate prepared by the automotive repair
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dealer. Because the repair dealers are highly regulated with
respect to the preparation of their estimates, they believe
that their estimates are more comprehensive. In fact, they
argue that insurer-prepared estimates are frequently low, and
frequently miss necessary repairs. Supporters believe that
cursory "eye-ball" estimates by insurers often lead a consumer
to accept a low-ball settlement offer. Further, they believe
that consumers often are unaware that they can obtain an
estimate from a registered body shop even after the insurer
has prepared an estimate.
4)Recent amendment . The author and groups previously in
opposition have worked on language that would resolve the
concerns expressed about the prior version of the bill. The
prior opposition has been removed.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0000429