Industry Groups Call Calif. Auto Repair Bill “Anti-Consumer”

The Association of California Insurance Companies, the American Insurance Association and the Personal Insurance Federation of California have announced their opposition to California Senate Bill 1167, a bill that the groups say would deny consumers vital information about longer guarantees for automotive repairs. The three organizations represent more than 90 percent of auto insurers doing business in California.

The bill, sponsored by Sen. Patricia Wiggins (D-Santa Rosa), has not yet been set for legislative hearing.

Current law, SB 551, guarantees California consumers the right to decide where their car is fixed after an accident. This proposed law would permit some auto repair shops to steer customers to their shops by limiting the information available to consumers.

“Consumers deserve the right to have all information about repair options, including facilities with a proven track record of quality repairs, warranties and a hassle-free claims process,” said Janine Gibford, AIA assistant vice president. “Consumers should not be denied information because some auto body shops are afraid of competition and think that full disclosure will cost them business.”

“This is a special interest bill for auto body shops that are afraid of informed consumer choice,” added Rex Frazier, PIFC president. “Why are auto body shops afraid to let consumers know which shops provide a better guarantee of repair work? Consumers should be able to choose any body shop they want following a crash, but they also deserve to know whether or not a particular body shop will stand by their work. ”

This issue was addressed in a recent ruling by the U.S. Court of Appeals for the Fifth Circuit, which struck down a Texas law that had similar limitations on communicating to consumers. In its ruling, the court wrote, “Consumers benefit from more, rather than less, information. Attempting to control the outcome of the consumer decisions following such communications by restricting lawful commercial speech is not an appropriate way to advance a state interest in protecting consumers.”

“Insurance companies have a right to communicate information about auto repairs and a duty to make sure that their customers make informed choices,” said Jeff Fuller, ACIC general counsel. “We oppose this anti-consumer bill because it would violate rights and would prevent insurers from fulfilling their duties to their customers.”

Source: The Association of California Insurance Companies, the American Insurance Association and the Personal Insurance Federation of California