Having a 15-minute discussion with a California legislator is a big deal, especially for someone attempting to make the lawmaker aware of how some insurers illegally impede the repair of a damaged vehicle. In October 2007 the CRA invited State Assemblyman Dave Jones (D-Sacramento) to tour a local repair facility, Gamboa’s Body and Frame. The CRA representatives, including executive director Allen Wood, hoped Jones would invest 30 minutes of his time to learn more about the skills, equipment and the costs involved in collision repair. In the end Jones far exceeded CRA’s expectations. He stayed for over an hour, peppering owners Rick Caron and Lee Gamboa with questions about paint technology, frame repair, steering and labor rates. Then Jones topped the relationship off with introduction this year of AB 1179.
“Insurer damage assessments given to claimants are not complete estimates of repair and, in many cases, they are confusing and misleading,” stated Jones when asked to explain the impetus behind his legislation. As an avowed consumer advocate Jones is hoping his no-nonsense AB 1179 will back up the fact that under state law only automotive repair dealers (ARDs) are authorized to write repair estimates . He wants to put an end to those insurer documents that may prompt a claimant into thinking the cost of repair is at a certain level when in reality the final cost and, hence, the insurance benefits, might be much higher. Jones points to the Collision Industry Conference study that revealed that between 33 and 54 percent of consumer who’ve been in accident accept the insurer’s check based on the insurers’ initial estimates which are typically half of the final cost.
Allen Wood has had discussion with Jones about how insurers are positioning themselves as the authority on estimating sustained vehicle damage when the law doesn’t support that. “This bill will help the claimant understand who is responsible for determining the full extent of damage,” he said.
AB 1179 simply requires that when an insurer presents a claimant with a damage assessment, it must include a specified statement alerting the claimant that only an ARD may prepare a written repair estimate and that the insurer’s assessment is not a repair estimate.
“Consumer protection hinges on greater transparency which promotes informed choices,” Jones said. “I’m optimistic about the bill’s passage.”
The three-term assemblyman said he put together the legislation after meeting with consumer groups and repairers late last year. He sees a strong link between consumers and ARDs.
“I’ve had a chance to meet with collision repair business owners in the greater Sacramento area and I’ve been impressed by how they care about their employees and how they make sure consumers are not being misled by insurers.”
His consumer advocacy has extended to battles with HMOs caught dumping sick patients that had a long record of making monthly payments for coverage. Ultimately Insurance Commissioner Steve Poizner fined these health plans, although Jones said the penalties didn’t go far enough. Jones might be able to put his words to the test if his candidacy to be California’s next insurance commissioner in 2010 succeeds.
“I intend to be an insurance commissioner who stands up for consumers,” stated Jones. “I particularly want to improve consumer information regarding insurance products.”
Jones noted that the Department of Insurance does not appear to keep an accurate record of consumer complaints filed against insurers; instead, the department limits complaints to those that are “justified.” Under state rules, the department must make a determination that an insurer’s actions were inconsistent with the terms of an insurance policy in order for the complaint to be “justified.” Therefore, if the department doesn’t make a determination, the complaint disappears from the public record.
The CRA’s Wood noted that ARDs and their customers routinely receive letters from the department informing them that it couldn’t make a determination of fault regarding allegations of steering and underpayment of coverage benefits.
Jones cited the department’s December 16, 2008 show cause order against GEICO that lists scores of consumers allegedly victimized in 2007 by either steering or underpayments for collision repairs. The order follows up on a May 2007 settlement were the commissioner hit GEICO with a $60,000 penalty. Yet, Jones noted, each year only a handful of justified consumer complaints were listed by GEICO’s name in the commissioner’s annual consumer complaint study.
“Consumers need the full story, not one filtered by the department,” said Jones. He indicated he may pursue a remedy to improve how complaints against insurers are reported to the public.
If he is elected commissioner, Jones intends to increase a working relationship between the department and California businesses that spend billions of dollars annually on insurance products, from healthcare and worker’s compensation to garage liability and vehicle insurance.
“Understanding problems and finding solutions is a full-time job,” he said. “While I will champion consumer causes, I also see business owners as consumers who face a complex world of insurance options and I will be there for them as well.”
Jones, chair of the powerful Assembly Committee on Health, said he was blessed with the advantages of great education and that has prompted him to help the less fortunate. As a Harvard Law School graduate he chose to work six years as a legal aide attorney providing free services for the poor. His legislative record is steeped in bills that help families and consumers on matters pertaining to affordable housing, education, the right of privacy, civil rights and economic development.
In 1995, Jones was one of only 13 Americans awarded the prestigious and competitive White House Fellowship, and he served in the Clinton Administration for three years, first as Special Assistant and then Counsel to United States Attorney General Janet Reno.
The assemblyman has received numerous awards in recent years, including the California Consumer Federation’s 2008 Consumer Champion Award and the Western Center on Law and Poverty’s “Leadership Award”. He has been honored by organizations such as Environment California, the Urban League, Preschool California and CalPIRG for his work. Capitol Weekly named him the “most effective legislator” after the Speaker of the Assembly and the Senate President Pro Tem.
Prior to his election to the State Assembly, Dave Jones served as a Sacramento City Councilmember for five and a half years.
He is a graduate of DePauw University, Harvard Law School and Harvard’s Kennedy School of Government. He and his wife, Kim Flores, have two young children, Isabelle and William. They live in Sacramento.
California’s collision repair industry has been searching for a legislative consumer champion ever since California State Senator Jackie Speier moved on to Congress. Assemblyman Jones has been willing to look under the hood to learn about insurer steering and bogus labor rates. AB 1179 will test his ability to be effective with a body of lawmakers constantly under assault by insurance industry backed bills that threaten to reduce consumer choice.