From January 1st 2008 to present, the current claims severity breakpoints are as follows
Severity $500 and under 9.09%
Severity $1000 and under 28.04%
Severity $2500 and under 66.26%
Data source: © 2008, AutoClaims Direct, DirectLink
Monthly Archives: June 2008
California AB 3004 regarding vehicle lien sales sent to Senate Judiciary.
California AB 3004 has now been sent to hearing on 6/24/2008. The senate judiciary will be hearing this bill. On May 8th, the bill passed after being read the third time, 75 Ayes to 0 Noes.
The key part of the bill is:
Any lien that arises for the storage, repair, or safekeeping of, or for the rental of parking space for, a vehicle shall be extinguished, and no lien sale shall be conducted, if the lienholder, after written demand made by either personal service or certified mail with return receipt requested by the legal owner, the lessor, or his or her agent, or insurance company representative, fails to provide, within a period of time not sooner than 24 hours nor later than 72 hours after the receipt of that written demand, copies of requested documents required to be filed or mailed pursuant to Chapter 2 (commencing with Section 10650) of Division 4 of the Vehicle Code.
The CA Assembly summary below:
SYNOPSIS
This non-controversial bill, sponsored by the Personal Insurance
Federation of California, provides that a vehicle lien is
extinguished if requested documents are not provided to the
legal owner of the vehicle, by the lienholder, as specified.
Current law requires every operator of a towing service to keep
a written record of every vehicle of a type subject to
registration stored for a period longer than 12 hours. This
written record must contain the name and address of the person
storing the vehicle or requesting the towing, the names of the
owner and driver of the vehicle and a brief description of the
vehicle including the name or make, the motor or other number of
the vehicle, the nature of any damage to the vehicle, and the
license number and registration number shown by the license
plates or registration card. According to the author, vehicle
lienholders often do not follow procedures for perfecting their
lien by giving required notices or following the statutory
requirements. Consequently, the author states, an owner may not
receive appropriate notices regarding the lien in a timely
manner or at all, but the lienholder presses for excessive lien
storage fees despite the deficiency in required notice and/or
required documentation. Given the relatively minor scope of the
bill, the author has acknowledged that should it be amended, the
Committee reserves the right to hear the bill again. This bill
has no known opposition.
A large insurance carrier eliminates full body sectioning.
Through sources within the industry, It has been revealed that a national insurance carrier has eliminated the use of full body sectioning as an approved operation for the company. Even though the repair method may be fully viable in some instances, this unnamed carrier according to several sources, has decided to eliminate this procedure from all estimates written for their company. In letter reviewed for my report, the reasoning is due to the fact this carrier has determined full “sectioning” is not as feasible in newer vehicles which utilize special and alternative metals. We await to see if there more information coming forth regarding this subject.
California auto fraud perps nabbed in El Cajon CA.
Insurance Commissioner Poizner Announces Auto Fraud Perpetrator Busted – Ordered to Pay More than $400,000 Restitution
EL CAJON ― Insurance Commissioner Steve Poizner today announced that a fraud perpetrator has pled guilty to 11 felony counts including grand theft and insurance fraud. On June 11, Tam Lai, aka Timmy Lai, 33, of Louisville, Kentucky, was sentenced to five years in prison and ordered to pay $415,292.96 in restitution to eight different insurance companies.
Insurance fraud is not a victimless crime,” said Commissioner Poizner. “In fact, it results in a $500 tax on every man, woman and child in the State of California. My Department investigators work closely with local and state enforcement officials to find scam artists and put them behind bars, where they belong.”
”Prosecution of insurance fraud is a top priority in our office,” San Diego County District Attorney Bonnie M. Dumanis said. “This case is an example of the commitment we have to work together with the Department of Insurance to aggressively prosecute insurance fraud cases.”
In December 2004, the Auto Club of Southern California notified the California Department of Insurance (CDI) that they suspected a group of individuals were involved in filing fraudulent claims. The insurer discovered that duplicate claims were being filed for the same vehicles with the same damages, and each had a similar story. The insurer also observed that all vehicle repairs were completed by the same body shop, Marshall Auto Body in El Cajon. Shortly after receiving the tip, CDI opened an investigation, which involved more than 50 auto insurance claims and 14 different vehicles.
The CDI investigation revealed that multiple claims were filed with various insurance companies. Most of the claims came from Marshall Auto Body. Lai was the owner of the body shop, and allegedly orchestrated the fraudulent claims-filing scheme. Lai and his accomplices purportedly purchased vehicles, obtained insurance policies on the vehicles, and staged non-injury accidents with them. Lai and his accomplices would then allegedly file multiple claims with insurance companies. They commonly reported that the insured was traveling on a two-lane road in San Diego County when they were involved in a hit and run collision, or that they hit a fixed object. Lai and his accomplices endorsed and deposited claims checks from insurance companies into multiple different bank accounts in an attempt to avoid detection.
The investigation also revealed that insurance claims were pursued by Lai and his accomplices until insurance companies began to question the legitimacy of the claim or opened an investigation. When this occurred, the questionable claim was withdrawn.
This investigation was conducted by the California Department of Insurance Fraud Division, California Highway Patrol, San Diego County District Attorney’s Office and the National Insurance Crime Bureau. This case was prosecuted by the San Diego County District Attorney’s Office.
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If you are a member of the public wishing information, please visit our Consumer Services.
I-CAR appoints new CEO
I-CAR has just appointed John Edelen to the position of President and CEO. Edelen is a former officer at Allstate. Click here for the story.
American Honda position statement on salvage and recycled parts use.
In a position statement from American Honda yesterday, Honda stated that while they realize the use of LKQ and recycled parts are important, they are concerned about the quality, safety and warranty. The position statement states:
POSITION STATEMENT
SUBJECT: USE OF SALVAGE / RECYCLED PARTS ON HONDA VEHICLES
TORRANCE, Calif., June 10, 2008 – American Honda recognizes the importance
of recycling, but the use of salvage / recycled parts to repair collision-damaged
vehicles raises serious concerns about quality, suitability, safety and warranty.
Many factors can influence the quality and / or suitability of salvage / recycled
parts including but not limited to, exposure to weather, improper removal or
transfer of parts, possible mis-match of vehicle electrical components or other
safety-related items as well as excessive wear on vital mechanical parts such as
steering or suspension parts.
In cases where the donor vehicle was repaired due to a prior collision, salvage /
recycle parts may not be an original or Honda Genuine replacement part. At this
time, there is no generally accepted process or system in place to regulate the
quality or suitability of salvage / recycle parts.
American Honda believes the interests of vehicle owners and collision repairers
are best served when Honda Genuine replacement parts are used in the repair of
a Honda vehicle.
Source: Position Statement American Honda
42% reduction in auto theft on Oahu HI
According to the results of an aggressive police program on Oahu, auto thefts have decreased by 42%. “Operation Pit Stop” was a major player in the reason for such reduction according to the police.
Recent study shows reduction in rear end collisions by 20%!
A recent study released by Mercedes Benz of vehicles utilizing Distronic and Brake Assist Plus found a reduction of rear end collisions by over 20%. This relatively new radar and braking technology could ultimately reduce such collisions by up to 36% according to Mercedes Benz. This study was conducted in Germany where 1 out of 6 rear end collisions results in an injury. Once this technology becomes more prevalent and expanded throughout the automotive industry, accident reduction may be a a real possibility. Click here for the story.
Industry Parts Usage Statistics First Half 2008
For the first half of 2008, parts usage averages on vehicle repairs are shown in the represented graph. OEM usage is just under 70%, with aftermarket parts coming in at 14%. OEM usage for the 1st six months of 2007 was 73.4% and aftermarket usage at just 11.34%. This shows a solid increase in use of alternative parts.
Source: AutoClaims Direct Inc. Directlink
California State Senate bill 1167 now newly amended.
The new amendment states that the commissioner within 30 days of the effective date, will create a task force of representatives from the auto body industry, insurance industry, and consumer protection groups and review all issues arising from section 758.5 and report in writing to the legislature by December 31,2009. This entire amendment has arose from the original bill’s proposal to not allow insurers to recommend repair shops once a consumer has indicated they have chosen a shop of their choice.
The amended bill is now in the hands of the Assembly insurance committee.