Last week in California, SB 1371 was amended. The new amendment is up for hearing next on 6/25/2008
SB 1371:
Existing law prohibits insurers from engaging in specified acts relating to automotive repair. This bill would prohibit insurers from capping paint and materials charges, as defined.
Some of the highlights are:
(a) Today, methodologies that are mutually accepted by both automobile repair shops and insurers are available to determine the cost of paint and related materials. These mutually accepted industry methodologies include manuals and estimating systems that set out the refinish labor units required to paint a particular portion of an automobile, such as a hood, fender, rocker panel, and so forth. The paint and material charge is calculated by multiplying the refinish unit times the refinish rate. Additional mutually accepted industry methodologies that are available involve software programs, which calculate the paint and materials charges. (b) "Capping" occurs when the cost of paint and related materials determined by any of these mutually accepted industry methodologies is ignored by an insurer. For example, a mutually accepted industry methodology determines a cost of seven hundred dollars ($700.00) for paint and related materials, and the insurer, as a standard practice, offers three hundred fifty dollars ($350.00), an amount that is unrelated to the paint and material charges that would be determined by any of the mutually accepted industry methodologies.