As the insurers claim victory there is another aspect to this issue that is of benefit to the repair industry. In fulfilling their desire to direct customers they have in fact set a standard for steering that previously did not exist and if so inclined, the repair industry can now challenge them and hold them to the parameters of AB1200 to insure full disclosure to the customer.
AB 1200 provides that insurers may provide “specific truthful and non deceptive information” regarding the services and benefits available to the claimant during the claims process. This may include, but is not limited to, information about repair warranties offered, the type of replacement parts to be used, the anticipated time to repair the damaged vehicle and the quality of the workmanship available to the claimant. Dialogue related to these issues, in light of the current language, could cause the insurers to subject themselves to possible discipline or litigation. The standard steering dialogue now employed by insurers could be construed by any reasonable person to be deceptive, and if so would constitute a violation of 758.5 of the Insurance Code.
For example, statements made by insurers that reference rates established by current surveys could be found to be deceptive. Currently they lack specificity, accuracy, and foundation, all of which would seem to be elements of, and a basis for, a non-deceptive statement. In fact, I suggest all surveys are lacking truthful non-deceptive information. References made regarding parts could also prove to be deceptive unless a full disclosure is made to the consumer as to type, quality, and fit. It would appear that all statements made to consumers during the claims process are subject to this non-deceptive standard.
There is an additional issue. Insurers themselves will now be drawing more attention to their DRP programs and the nature of the agreements and a fuller disclosure of each program’s criteria may be required to remain complaint under AB1200. These issues will undoubtedly draw greater attention to the agreements and could even invoke challenges to the actual non-deceptive language that the consumer/claimant is subjected to. References made to the repair time could be viewed as deceptive when the statements are made by a party not performing the repair. Quality of workmanship comments could verge on deception if the vehicle is not repaired according to OEM standards.
The challenge is how the industry will respond to these issues. We as an association are prepared to facilitate the law. When the language becomes operative we are prepared to contact the Department of Insurance and take steps necessary to rectify or make public the Commissioner’s lack of regulatory presence and the lack of oversight in the industry he is charged with regulating. We want to insure that California consumers/claimants are truly afforded an informed choice with full disclosure (as the law states). We have developed strong relationships with groups with similar interests. This bill only passed by the minimum required votes after coming out of committee unopposed. Let’s stay focused so we can make a difference.