Anti-steering bills in Connecticut and California have passed their respective state legislatures, although in modified form.
Earlier this summer the California legislature passed Senate Bill 1167, which now awaits the signature of Governor Arnold Schwarzenegger. In its current form, the bill requires the Department of Insurance to convene a task force to study steering issues, and report its findings in writing to the legislature by Dec. 31, 2009.
The bill was introduced by Senator Pat Wiggins (D-Santa Rosa) and sponsored by the Collision Repair Association of California (CRA). The original language of the bill would have prohibited insurers from suggesting alternative repair choices to consumers if they had already selected a repair shop.
The existing statute prohibits insurers from requiring that a vehicle be repaired at a specific shop, and requires them provide each insured with an Auto Body Repair Consumer Bill of Rights.
“We’re pleased that the senator introduced the bill and fought hard for it. We still support the bill, but it has turned into a ‘study’ bill,” says Richard Steffen, director of legislative affairs for the CRA. “The primary benefit of this is that it may accelerate activity at the Department of Insurance.” (DOI)
Steffen has been involved in a DOI working group along with representatives from the insurance and car dealership industries that is examining labor rate survey and steering issues. Steffen expects the department to issue a rulemaking notice by early next year regarding labor rate surveys (which the CRA generally opposes).
“The legislative process is very slow,” Steffen says. “We’re hoping that the Department of Insurance working group will be a little different in terms of what gets accomplished. We’re opposed to labor rate surveys, because they just provide an average, but if they are going to do them, our goal is to have the direct repair program rates excluded.”
The Association of California Insurance Companies, American Insurance Association, and Personal Insurance Federation of California opposed the bill.
In Connecticut, Governor M. Jodi Rell signed a bill that requires disclosure to consumers that they have the right to choose their repair facility. House Bill 5152, which goes into effect in January, requires insurers to include a notice on all insurance cards stating, “You have the right to choose the licensed repair shop where the damage to your motor vehicle will be repaired.” Insurers with direct repair programs must also obtain written acknowledgement from the consumer that he or she is aware of their right to choose a shop.
Repair shops must also provide notice to insurers regarding supplemental repairs, and to establish a time frame for insurers to inspect the vehicle before the repairs are completed.
Earlier in the session, legislators rejected a stronger bill (SB 288) introduced by Attorney General Richard Blumenthal that would have amended the state’s anti-steering law to say that “no insurance company ... shall recommend, request or require any insured to use a specific person for the provision of automobile physical damage repairs, glass replacement, glass repair service or glass products.”
Bob Skrip, president of the Auto Body Association of Connecticut (ABAC) and owner of Skrip’s Auto Body in Prospect, said that while the new law is a step in the right direction, his group will continue to work with the Attorney General’s office to develop new consumer protections in the next legislative session.
In the meantime, ABAC has filed class action lawsuits against Progressive and The Hartford, claiming the insurers are illegally steering customers to DRP shops. The group is preparing to file suit against three other insurers as well.
ABAC and the Coalition of Collision Repair Excellence (CCRE) have also teamed up on a donation drive to help Greg Coccaro of North State Custom in Bedford Hills, N.Y., pay the legal bills associated with defending his shop in a fraud case brought by Progressive. A New York State Supreme Court judge dismissed Progressive’s case earlier this month. Coccaro is suing Progressive over damage done to his business because of the company’s alleged steering and deceptive trade practices.
