The committee, chaired by Senator Jackie Speier, raised questions that addressed consumer rights in this process and seemed concerned that insurers' cost-cutting could disregard repair quality. The committee agreed on the decision to make AB 303 a "two-year" bill, which means the bill cannot be heard again until next year.
The committee felt that more time was needed to make a decision on this issue, considering it was a "gut and amend" bill which involves amending the language of an existing bill (AB 1079) quickly and pushing it through the committees.
Get a head start on the return of AB 303
• Do not push the subject of "insurer as customer" to the back burner. A year goes by in a heartbeat.
• Educate yourself and your employees about the content and consequences of AB 303. Use the internet. Visit sites www.assembly.ca.gov and www.sen.ca.gov for the most up-to-date information.
• Send letters and e-mails to your representatives every three months expressing opposition (or support) for the bill. Also send letters to those representatives who are on record as opposed to the bill and let them know you are behind them.
• Participate in efforts by your associations to defeat AB 303. Current information about the legislation can be found on the CAA web site: www.calautobody.com.
• There are three major insurance groups supporting the bill: Progressive Insurance Companies; Personal Insurance Federation of California, and the Association of California Insurance Companies. Addresses for all of them can be found on the web. Start a writing campaign to let these companies know that repairers and consumers alike are opposed to AB 303.
• Inform your customers of the impending legislation and the take-aways that directly affect them. Create posters to attract the attention of your customers. Back this up with a flyer explaining in simple terms the details of the legislation.
• Encourage your customers to take actions of their own - share the issues with friends and start a grassroots effort to defeat AB 303. Have a hand-out letter they can send to their California Assemblyperson and Senator.
The California Autobody Association (CAA) testified in opposition to the bill at the hearing and stressed the body shop's legal liability for the repair. CAA stated in its newsletter to members, "A program could be set up in which the insurer gains complete control of the repair pro-cess and would not be liable for any of the decisions they dictate. The repair shop would still be responsible for the repair and would still be under the jurisdiction of the Bureau of Automotive Repairs (BAR)."
Additional testimony by CAA raised concerns about the conflict of interest that an insurer would have between fixing the car to pre-accident condition, and compromising on the repair to save money. CAA said that the consumer could be left out of the decision-making process if questions came up during the repair.
Attorney General Bill Lockyer, new car dealers and consumer groups, including the Consumers for Auto Reliability and Safety, spoke to the consumer consequences of the bill.
"AB 303 would specifically authorize insurance companies to become the 'customer' for purposes of authorizing auto repair, meaning that consumers will get less, not more, information about what is being done to their cars," explained Marcella Rojas, spokesperson for the California Motor Car Dealers Association.
For example, current law requires that the customer receive a copy of the written estimate of repair. Under the new legislation, the owner of the vehicle would never see the estimate and would be forced instead to rely on the insurance company to make those decisions.
Should insurance companies be the "agents" for consumers? The Legis-lature unanimously said no last year with the passage of AB 1079 (Ber-mudez). That bill, as signed by the governor, stated that every repair estimate must be approved by the customer, and that any changes in that estimate, such as a supplement, must be approved directly by the customer and not by the insurance company.
Rojas pointed out this new bill provides less choice for consumers. "It's a consumer take-away. There is strong potential for abuse under AB 303." Rojas suggested it could make vehicles less safe, and would inhibit the ability of auto repair shops, including dealers, to maintain any direct contact with vehicle owners or lessees.
In addition, she suggested that vehicles are likely to be fixed at cheaper places using cheaper parts. Car owners would lose options. Furthermore, a car's resale or trade in value could be lowered if repaired without OEM parts, something a consumer won't discover until much later.