Proposed California Legislation
Threatens
Consumer Choice in Auto Repair
Washington, D.C., April 20, 2005 — California State Sen. Kevin Murray, D-Los Angeles, has introduced legislation allowing insurance companies to place a "cap" on repairs insurers will cover. Senate Bill 98, Auto Insurance Repairs, will eliminate a consumer's right to choose.
If passed, the legislation will change the way repairs are paid for by the insurer. The bill states that:
"... if the insurer and the shop chosen by the claimant to perform the repairs cannot agree on the price of repairs, the insurer may obtain and present to the shop two or more quotes from other shops in the area that will perform and guarantee repairs, and the insurer shall be liable only for the higher of the quotes presented."
The legislation also allows for a preferred provider program in return for a premium reduction.
The bill is scheduled for a hearing on Wednesday, April 27 in the California Senate Banking, Finance and Insurance Committee.
"The Automotive Service Association (ASA) opposes Senate Bill 98," said Bob Redding, ASA's Washington, D.C. representative. "We have opposed this form of legislation in other states. We believe that if the bill becomes law, it will inhibit the rights of consumers and work to the detriment of California's small business community. This legislation discourages small business innovations that are advantageous to both the consumer and labor communities."
ASA urges California members to contact their state senator and ask him or her to oppose S. 98. Please refer to the Automotive Service Association's (ASA) grassroots Web site, www.TakingTheHill.com, for more information. Click on "Current Alerts" on the right side of TakingTheHill.com to contact your senator electronically, urging him or her to oppose the legislation. A sample letter has been provided for your convenience.
The Automotive Service Association is the largest not-for-profit trade association of its kind serving an international membership base that includes numerous affiliate, state and chapter groups from all segments of the automotive service industry. ASA's headquarters is in Bedford, Texas.
ASA advances professionalism and excellence in the automotive repair industry through education, representation and member services. For additional information about ASA, including past news releases, go to www.asashop.org, or visit ASA's legislative Web site at www.TakingTheHill.com.
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