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Tuesday, 03 March 2009 17:00

Another Insurer-Steering Bill in California

Existing California 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.

A new bill, AB 802, proposed by Assemblyman Michael D. Duvall, would state that nothing in that provision prohibits an insurer from providing a claimant with information regarding the benefits available to the claimant under the terms of the automobile insurance policy.

The California Assembly currently is reviewing a bill that would prohibit insurers from suggesting or recommending a specific automotive repair company unless a referral is expressly requested by the claimant or the claimant has been informed in writing of the right to select an automotive repair shop.

AB 802 also would require that if a claimant accepts the insurer's recommendation, the following written notice would need to be sent to the claimant within five days of the acceptance:

"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. 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."

However, the bill would also add some language to the insurance law that says "Nothing in this section prohibits an insurer from providing a claimant with information regarding the benefits available to the claimant under the terms of the automobile insurance policy."

The bill was introduced and read for the first time on February 26 by Assemblyman Michael D. Duvall. A tentative hearing in the committee is scheduled for March 30.

CLICK HERE for the text of the bill.

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