California governor signs steering bill into law - - ABRN (Automotive Body Repair News)

California governor signs steering bill into law

Publish date: Oct 15, 2009
Source: Automotive Body Repair News

California Gov. Arnold Schwarzenegger signed into law AB 1200, which was opposed by all the collision repair associations in the state because they said it would hurt independent auto body shops by making it easier for insurers to steer customers to their direct repair program (DRP) shops.

The California Autobody Association said it opposed the bill because it will supersede the existing steering regulation that offered more protection to consumers. “The CAA is very disappointed that AB 1200 was signed by the governor,” says David McClune, CAA’s executive director. “I want to thank all of our members and other supporting industry groups that sent in hundreds of letters to the governor asking him to veto the bill.”

The California Assembly approved AB 1200 42-19 on Sept. 9 and the insurer-backed bill went to the governor for his review. The Collision Repair Association of California will ask him to veto the measure because it will hurt independent collision repair shops, which already are suffering during the economic downturn, while depriving claimants the benefits of a repair analyses based on the right thing to do, not the cheapest way to go.

“AB 1200 is a misleading proposal that allows an insurer to keep the details of direct repair programs secret while it badgers claimants into selecting a repair shop favored by the insurer,” says Lee Amaradio, Collision Repair Association of California president. It will help insurers send more claimants to DRP shops and competition will decrease, CRA said.

Comments from our Readers

Concerned / phila, PA
Posted 2009-10-15 21:59:14.0
Dear Gov, You signed AB 1200 into law. I just don't get it! Your looking for and need taxation. If you allow the Insurer to take their premiums and run to their homestate they live in how can you keep potential tax revenues? If an out of state insured/claimant need repairs and they are directed to DRP's by the Insurer. You lost money in taxation. If a Cali. state resident had a claim, the premiums would be low in a small way making the autobody field suffer in wages/compensation as opposed to carpenters, plumbers, brick layers etc....affecting future autobody employment skill levels, but overall, your not keeping your dollars in your own state. Your giving it away as we are giving our countries money away to china and/or abroad. Their Enron accounting skills don't allow you to see the profits they are reaping.

Darren Gilling / ENGLAND
Posted 2009-10-16 03:47:47.0
This is why the US collision industry should follow the CallZebra model which enables repairers to provide their very own accident management service and allow them to control their own repair provision. Sadly if they don't, the insurers may take complete control of the market and any profit that the repairer makes. For more information go to www.callzebra.co.uk or www.callu&i.com

Independent shop owenr /
Posted 2009-10-17 23:39:42.0
A different approach for the independent shops would be to find a way to change of amend the law to force the insurance companies to include all shops in any zip code and let the shops compete for the customers. consumers demanding better service and higher quality will force the shop owners to improve their services and facilities. I have friends who run succssful DRP operations and make good money.

Mike Causey / Greensboro, NC, UNITED STATES
Posted 2009-10-18 07:31:10.0
It seems to me that whatever is best for the consumers and independent body shops is the way to go. Obviously the good governor was influenced by the legislative vote which was slanted in favor of the powerful insurance lobby in California. A salute to all the body shop owners and consumers who wrote letters to the governor and the legislators about this important issue. Unfortunately, your voices were not heard loud and clear because they were muffled by the powerful megaphone of the insurer "Public Relations" machine. Hey, when CEO's of insurance companies are raking in mega millions in compensation, they can afford to do whatever to keep the money machine working for them. Take a look at the compensation packages for some isnurer CEO's by visiting: insurancecompanyrules.org For example, the CEO of Aetna made around 25 million dollars in 2007. Without squeezing a few thousand body shop owners, medical doctors, etc, the insurers couldn't afford to keep paying that kind of compensation. Since insurance is now on the front burner at the federal level, let your representatives in Congress know how you feel today. Thanks for letting me put in my two-cents worth. - Mike Causey in North Carolina (336) 210-1947

Chuck / CA
Posted 2009-10-20 13:35:09.0
My wife runs a collision shop and I am a former shop manager that now works in the insurance industry. I like to keep things in perspective and see issues from both sides. I think there are some DRP programs that are good and some that are bad. I think if more reputable shops started refusing to accept the bad DRP's, it would cause a consumer shift away from those insurers who try to repair cars poorly. As far as referrals go... The previous law in California made it almost impossible for an insurer to even mention they had a DRP program, that is no more fair than allowing insurers to strong-arm claimant's into their shops. There has to be a middle ground. Also, most shops get their business from one type of referral or another. It could be a referral from a friend, mechanic or other sources. How many shops out there have arrangements with car dealer's, attorney's, or tow companies to trade referrals? How is that any different than a referral from an insurance company?


Posted 2009-10-21 14:46:14.0
According to this article it quotes Lee Amaradio president of the CRA as saying: “AB 1200 is a misleading proposal that allows an insurer to keep the details of direct repair programs secret while it badgers claimants into selecting a repair shop favored by the insurer,” would like to know if he feels so strongly about this subject then why is it his Autobody shop that he owns hold majority of the Insurance companies as DRP's. I do believe that he has SF, F, M, G, G, and if i'm not mistaken several others.So many of us on the outside would like to know his response as to WHY he is going all the way to Sacramento to fight causes when he is one of the worst offenders.I would like to let many of you know that us small shops look up to the shops such as Mr. Amaradio's and are following his path to be able to build such a empire.So we too are striving to work hard and produce a good product for our customers and yes trying to obtain DRP's so we too can stay afloat in this economy. the small shops that only have 1 DRP that is a great company to deal with we worship, value, respect and appreciate the very little amount of business we get from them. It's like the kids playing baseball in little league. They are always trying to impress and excel at their sport and then maybe they can make it to the semi pro league and they are still trying to be over achievers and excel at their sport, then they make it to pro's and they become cocky and full of themselves and their name alone should be enough. SORRY it's not.... get back to reality and start showing your skills again, or you just might be cut from the team watching from the bleachers. And the new law passing is almost laughable because now the insurers have more rights to talk to the customers than they did before.Cut off your nose to spite your face. I for one was PRO this bill.Thank Arnold Schwarzenegger for passing it has officially kept me in business..

Dina / Buellton, CA, UNITED STATES
Posted 2009-11-06 15:07:09.0
My husband is a independent body shop owner and operator.... two weeks ago one of our returning clients used our facility... today he was told by Geico that He could not use us anymore and gave him the name of a shop in Santa Barbara to use instead. That will drive us out of business. This law is helping no one in California. What does the Gov. expect will happen.... This is a ridiculous law and another Big Government taking away our rights. This law should be terminated.

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