Bray’s Report

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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.

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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.

In an effort to decrease collisions and make the roads safer, Daytime running lights will be required on all new vehicles from 2011 on. 

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This article from California Assemblywoman Wilmer Amina Carter addressed the issue of auto repair fraud. A BAR study in 2003 showed 40% of consumers were victims of auto repair fraud.

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With tough times for auto dealerships on the sales end, some such as the Harte Auto Group in Connecticut are converting part of their dealerships to auto body repair facilities to maintain revenue.

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The Governor of CA today signed legislation banning the use of text messaging while driving. 

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Here’s a current update of the auto claims industry parts usage statistics over the past 30 days….

Data source:  © 2008, AutoClaims Direct, DirectLink

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.

Under a ruling by a federal judge, insurance companies and salvage yards will be required by law at the end of March 2009 to provide information on vehicles damaged by floods, fires or crashes that are total losses.

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The U.S. government unveiled new rules that may reduce the instances of reselling total loss vehicles with a clean title. 

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