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Monday, 15 May 2017 17:58

CAA Members Urged to Fight Potential Labor Rate/Steering Bill

Written by Victoria Antonelli



Commissioner Jones then tackled the timeliness and format of the surveys.


“Insurance companies were using surveys that were five, six years old,” Molodanof said. “We decided that the labor rate surveys should be updated annually.”


The CAA lobbyist said the insurance companies felt this was too short of a time frame, so Commissioner Jones said they can get a year extension if they do a CPI increase. 


“The insurance commissioner then developed a standardized survey questionnaire,” Molodanof explained. “It’s very simple. You don’t have to fill it out, but it’s is recommended that you do.”


He said that out of the 187 insurance companies in California that sell auto insurance, approximately 12 to 15 do surveys, despite the opportunity to gain a rebuttal presumption. A rebuttal presumption confirms that the insurance company has completed the survey correctly, and the insurance commissioner backs their rates. 


“The insurance companies don’t like providing survey questionnaires because they feel it’s too much of a hassle,” said Molodanof. “If AB-1679 passes, they will be able to go through paid invoices or third party software to determine rates, which means they could be using a DRP rate or some other negotiated rate. You won’t know for sure.” 


The last current standards Molodanof explained that will be affected by AB-1679 pertain to estimates, re-inspections, and distance customers have to travel to a DRP shop.


“Under the new regulations, insurers can’t send people to go get their car repaired or inspected [to a shop] that’s over a certain number of miles away,” he said. “In an urban area you can’t go over 15 miles and in more rural areas the limit is 25 miles.”


Also, according to current regulation, if insurance companies want to re-inspect the vehicle, they have six days to do so after they have notice and access to the vehicle.


“Before this regulation was set, the process could be dragged out for weeks and weeks, causing unnecessary delays in repairs and higher costs due to rental cars, for example,” the CAA lobbyist explained. 


Lastly, the current regulations state that consumers only need to get one estimate, versus two or three.


“We don’t need to do that anymore, the shops are all qualified and highly regulated,” Molodanof said. 


AB-1679 intends to take away the limitation on the number of miles an insurance company can send a customer for a repair or inspection, days for a re-inspection, and number of estimates. 


“The CAA is not the only organization opposing this bill,” he said. “The Department of Insurance, California Conference of Machinists, New Car Dealers Association, and Consumer Attorneys of California are all opposed to the legislation.”


Molodanof encouraged all members to call their senator and assembly members on a Monday and set up a meeting for a Friday to discuss why AB-1679 will hurt their business and consumers.


“We don’t have the vast resources that the insurance companies have, so our best tactic is strong grassroots campaigning, one-one meetings” he said. “You are all industry experts. You need to explain to legislators why and how this will negatively impact your business.”


For more information, visit or contact Jack Molodanof at

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