California DOI, consumer groups condemn insurer-backed parts legislation
California Insurance Commissioner Dave Jones recently held a news conference with the Consumer Federation of California, Consumers for Auto Reliability and Safety, and the Automotive Machinists Union to discuss AB 1098 and SB 1460, two bills that would strip consumers of longstanding protections.
Like this article? Sign up to receive our weekly news blasts here.The California Alliance for Retired Americans, the Congress of California Seniors, and United Policyholders also joined the news conference.
The bills would essentially terminate a 20-year consumer protection standard by allowing insurers – without any checks or balances – to force repair shops to use aftermarket parts on consumers’ automobiles in the event of a collision and shift warranty coverage from insurers to lesser known suppliers or distributors, Jones said.
“These bills would significantly reduce consumer protections related to the use of aftermarket automobile parts, and this is simply unacceptable,” Jones said. “Since I was sworn in as insurance commissioner, I have emphasized time and again that job number one at the California Department of Insurance is to ensure that consumers are treated fairly and their rights protected fully. And, in this case, consumers simply deserve better.”
“Insurance companies and other special interest groups are trying to sneak through hostile legislation that would strip consumers of the right to have their cars repaired with the highest quality parts,” said Richard Holober, executive director of the Consumer Federation of California. “We call on lawmakers to stand with consumers and Insurance Commissioner Dave Jones and reject this attack on California's Fair Claims Practices Regulations.”
“You shouldn't have to worry that your insurance company is cutting corners on the repairs and tricking you into getting substandard parts that don't fit, may deteriorate prematurely, and significantly reduce the value of your car,” said Rosemary Shahan, president of Consumers for Auto Reliability and Safety
If passed, AB 1098 and SB 1460, would severely impact consumer protections by:
- Watering down the Fair Claims Settlement Practices Regulations;
- Allowing for the use of substandard and inferior parts in collision repair;
- Transferring the warranty of coverage from the insurer to a supplier or distributor;
- Harming consumers from low-income communities;
- Bringing legitimacy to a generally flawed certification standard and process; and
“Non-OEM parts are generally less expensive than OEM parts, because they are generally inferior products. And when it comes to replacing damaged parts on one's automobile, consumers should have the right to choose between a good product and a bad one, not insurers,” said Skip Hatch, Automotive Machinists Union.
