BILL ANALYSIS
SENATE COMMITTEE ON BANKING, FINANCE,
AND INSURANCE
Senator Ronald Calderon, Chair
AB 1179 (Jones) Hearing Date: June 17, 2009
As Amended: April 27, 2009
Fiscal: No
Urgency: No
SUMMARY Modifies the required content of the Auto Body Repair
Consumer Bill of Rights, which the Department of Insurance must
then incorporate into future editions, to include information
inform consumers that they have a right, including when pursuing
an insurance claim for repair of that vehicle, to seek and
obtain an independent repair estimate directly from a registered
auto body repair shop.
DIGEST
Existing law
1. Requires the Insurance Commissioner to determine the contents
of an Auto Body Repair Consumer Bill of Rights, which is
required at a minimum to include specified information.
2. Requires the standardized form Auto Body Repair Consumer Bill
of Rights as specifically developed by the DOI in consultation
with the Bureau of Automotive repair to address the topics of:
a. 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.
b. 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.
c. 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.
AB 1179, Page 2
d. 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.
This bill
1. Will add to the required subject matter within the Body
Repair Consumer Bill of Rights information on a consumer's
right to seek and obtain an independent repair estimate
directly from a registered auto body repair shop for repair
of a damaged vehicle, even when pursuing an insurance claim
for repair of that vehicle.
COMMENTS
1. Purpose of the bill According to the author, this bill's
purpose is to inform auto insurance consumers that their
rights with respect to the repair of their own vehicle
includes obtaining their own independent auto body repair
estimate, even if the repair involves an insurer and the
insurer has provided an estimate or "damage assessment."
2. Background Information provide by the author notes a
consumer receiving an auto body repair estimate from an
insurer often receives it in the form of a proposed
settlement offer, and may be unaware they can obtain their
own estimate from the shop of their choice. In such a
situation, they may accept the "settlement" amount, not
realizing that the actual cost to repair the vehicle, once
it is examined by a registered auto body shop, could be
significantly higher, triggering the need to obtain a
"supplemental" payment from the insurer for the repairs to
be completed and their car returned to them. Consumers
often do not know, until they are in such a situation, that
completion of repairs and full payment might be subject to
supplemental payment negotiation. If consumers know up
front that they are entitled to obtain their own estimates,
some may choose to do so and thus obtain an independent and
possibly more complete sense of the actual damage and cost
of repairs.
AB 1179, Page 3
3. This provision being revised by this bill does not dictate
the precise language of the Auto Body Repair Consumer Bill
of Rights but rather identifies topics, which at a minimum,
must be addressed. The fact that a consumer may seek at any
time to obtain an independent estimate of the cost of
repairing their own vehicle correctly states their right as
vehicle owner. It is a fact which can very reasonably be
seen to be relevant to include in the existing Auto Body
Repair Consumer Bill of Rights.
4. The Association of California Insurance Companies has an
opposed unless amended position, stating:
"We have worked closely with the author on this bill
and are not opposed to adding an additional element to
the Consumer Bill of Rights regarding a consumer's
right to obtain an independent estimate of the damage
to their automobile. Consumers have always had this
right and adding it to the Consumer Bill of Rights
makes sense. We do, however, have a problem with the
language "when pursuing an insurance claim for repair
of that vehicle."
Consumers receive the Consumer Bill of Rights when
they purchase the policy and when they have a claim so
the right is already clear that it applies to an
insurance claim. No other element in this section
contains this additional language. This language is
confusing and could make the consumer believe he or
she must obtain an additional estimate. "
5. While for many consumers the information being added by this
bill may be a matter of which they are already aware, the
purpose of a consumer bill of rights document is to ensure
all members of the public can have a common understanding of
certain basic facts. In the context of California's
existing Auto Body Repair Consumer Bill of Rights, the
addition proposed by this bill is reasonable and a useful
clarification and its value in ensuring all consumers have a
common understanding vis-?-vis their rights would appear to
offset the possible confusion noted in the comments by the
ACIC.
6. Support . Consumers for Auto Reliability and Safety (CARS)
California Autobody Association
Collision Repair Association of California
AB 1179, Page 4
Consumer Watchdog
7. Opposition Association of California Insurance Companies -
Oppose Unless Amended"
8. Questions None
9. Suggested Amendments . None
10. Prior Legislation None
POSITIONS
Support
Consumers for Auto Reliability and Safety (CARS)
California Autobody Association
Collision Repair Association of California
Consumer Watchdog
Oppose
Association of California Insurance Companies - Oppose Unless
Amended
Principal Consultant: Kenneth Cooley (916) 651-4102