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Wednesday, 24 April 2013 22:20

CAA Instrumental in New Insurance Regulation

On March 31, 2013, the new Insurance Regulation, Subchapter 7.5, Article 1, Fair Claims Settlement Practices Regulation, Amended Section 2695.8, took effect.

This regulation addresses the issues that were discussed with the Department of Insurance by the California Autobody Association when the Insurance Commissioner took office. The CAA has been working with the department to assist in clarifying the areas of aftermarket parts usage and claims settlement. This regulation addresses a number of issues for the collision repair industry. The regulations:

● Require the current insurer’s warranty be expressly stated in the estimate of repair generated by the insurer;
● Require an insurer to cease use of a part known to be non-compliant, and notify the part distributor within thirty (30) days.
● Require an insurer to pay for an amount to repair the damaged vehicle to its pre-loss condition in a good and workmanlike manner, based upon the repair standards required by auto body repair shops licensed to the BAR;
● Require an insurer to pay for the costs associated with returning a defective part and the cost to remove and replace the defective part with compliant non-OEM part or an OEM part;
● When insurers prepare an estimate, it cannot deviate from the standards, costs, and/or guidelines provided by the estimating software used by the insurer.
● Require insurers to reasonably adjust any written estimates prepared by the repair shop of the claimant’s choice and provide a copy of the adjusted estimate to the claimant and the claimant’s repair shop.

The DOI is also in the process of reviewing and updating regulations pertaining to labor rate survey standards for conducting surveys; and clarification on steering, after a consumer has specifically selected a shop to have car repaired.

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