California Steering Bill Drives Off the Beaten Path: Senate Does Not Approve

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There has been much controversy lately regarding California Assembly Bill 1200, also known as “the steering bill”, which did not pass this week in a 19-17 Senate vote. California Assembly Bill 1200 would remove restrictions against an insurer to require or suggest that a vehicle be repaired at a specific auto repair dealer. If the bill had been approved, insurers would have apparently had more leeway in steering customers to their preferred shops. According to a report, it is possible that the bill may be reintroduced.

At the heart of the criticism is the notion that it does not give consumers the protection they need or require. A California-based consumer advocacy group that opposes the Bill, Consumer Watchdog, has published multiple insurance company documents that are said to show evidence of anti-consumer practices and direct repair programs (DRPs) that do not really help consumers. In fact, one contract between an insurance company and its desired group of body shops revealed that the auto body shop was being pressured into maintaining lower costs, at the expense of having their contract terminated if they did not comply.

The executive director of Consumer Watchdog said that these questionable contracts create “reverse competition.” Instead of competing for customers, body shops are fighting for insurer referrals, which are ultimately determined by the shop’s capability of cutting its rates, thus leading to poor auto repair work stemming from those cut-rate prices. In addition, another document revealed that a body shop was reprimanded for using more factory parts than an insurance company preferred. Also, it was recommended by the insurance company that the body shop use more after-market parts to lower costs.

It should be interesting to see whether or not the Steering Bill makes its way through the Senate, or if a second consideration will in fact be made. Above all else, the rights of consumers deserve to be protected from auto repair fraud. If you believe that you’ve been a victim of auto repair fraud in California, the Law Offices of Howard D. Silver can help you. In addition to their experience with the California lemon law, they have helped many clients recover money they were cheated out of from auto repair shops, retailers, and automakers. Call the Law Offices of Howard D. Silver today at (855) 341-2611 for a free consultation.

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Posted Date: 
Wednesday, February 18, 2015