Monthly Archives: September 2008

California Governor Signs SB 1371 , Auto Paint Capping Bill

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This bill prohibits insurers from 
capping paint and materials
charges, as defined.
BILL NUMBER  : S.B. No. 1371
AUTHOR	: Correa
TOPIC	: Insurance: automobile repair capping.

TYPE OF BILL :
                Inactive
                Non-Urgency
                Non-Appropriations
                Majority Vote Required
                Non-State-Mandated Local Program
                Non-Fiscal
                Non-Tax Levy

BILL HISTORY
2008
Sept. 28   Chaptered by Secretary of State.  Chapter
   526, Statutes of 2008.
Sept. 28   Approved by Governor.
****************************************************
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares the following:
   (a) Today, methodologies that are accepted by both automobile
repair shops and insurers are available to determine the cost of
paint and related materials. These 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 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 accepted industry methodologies is ignored
by an insurer. For example, an 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 accepted industry methodologies.
   (c) Pricing agreements involving discounts that are entered into
voluntarily between an automobile repair shop and an insurance
company constitute neither "capping" nor an accepted industry
methodology used in determining paint and material charges.
  SEC. 2.  Section 758.6 is added to the Insurance Code, to read:
   758.6.  Insurers shall not engage in capping. For the purposes of
this section, "capping" means offering or paying an amount that is
unrelated to a methodology used in determining paint and materials
charges that is accepted by automobile repair shops and insurers.

Results ….. Are DRP’s Worth It??

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We conducted an online survey over the past week and the results are in. Are DRP’s worth it? Only 33% of the people who participated felt DRP’s are the way to go. The rest felt Direct Repair Programs are not worth the time or should only be used in conjunction with the use of field appraisal staff.

esults