Calif. Choice Bill For Collision Shops Draws Fire

A California bill that would ban insurers from discussing repair facilities with a policyholder who has chosen a body shop after an accident is drawing objections from insurance trade groups.

The bill sponsored by State Sen. Patricia Wiggins, D-Santa Rosa, has come under fire from the American Insurance Association (AIA), Personal Insurance Federation of California (PIFC) and the Association of California Insurance Companies (ACIC).

It has been inspired by auto body shops in a bid to limit choice, the groups said.

ACIC said it is urging Californians to demand that legislators vote against legislation it said "would deprive accident victims of making informed choices about getting their vehicles repaired."

The bill (SB 1167), which is due to come up at the April 2 meeting of the Senate Banking, Insurance and Finance Committee, according to ACIC, could end up costing policyholders more money.

Under existing law, no insurer can require that an automobile be repaired at a specific automotive repair dealer, and the carrier can't suggest or recommend that an automobile be repaired at a specific auto body shop.

Sen. Wiggins' bill would require that when a policyholder first reports vehicle damage the insurer must ask the policyholder if they have selected an auto repair shop, and if they said they had, the insurer would be prohibited from "engaging in any discussion regarding a program or a facility that performs auto body repairs."

Current law guarantees California consumers the right to decide where their cars are fixed after an accident. Trade groups argue that SB 1167 would permit some auto repair shops to steer customers to their shops by limiting the information available to claimants.

Sam Sorich, ACIC president, said insurers have created a Web site, www.caautobodychoice.com that the public can use to communicate "with the members of the Senate Banking, Finance and Insurance Committee to register their concerns about this anti-consumer effort."

"This is a special interest bill for auto body shops that are afraid of informed consumer choice," said Rex Frazier, PIFC president.

"Why are auto body shops afraid to let consumers know which shops provide a better guarantee of repairing work?" asked Mr. Frazier. "Consumers should be able to choose any body shop they want following a crash, and they also deserve to know whether or not a particular body shop will stand by its work."

Asked to respond to the criticism, David Miller, a spokesman for Sen. Wiggins, said by e-mail that she "is 100 percent committed to consumer choice, which is why she introduced SB 1167."

He said the measure "will clarify existing law preventing insurers from steering consumers to auto body shops. That's why consumer advocates, including those focused on vehicle issues, say SB 1167 is a pro-consumer bill."

ACIC said that in addition to the Web site, its media campaign includes radio ads telling listeners "of the auto body shops' effort to keep them from getting key information to make the most informed decision as to where to get their car repaired."

"Consumers deserve the right to have all information about repair options, including facilities with a proven track record of quality repairs, warranties and a hassle-free claims process," said Janine Gibford, AIA assistant vice president. "Consumers should not be denied information because some auto body shops are afraid of competition and think that full disclosure will cost them business."