AB 2276: Motor vehicle insurance: auto body repair.

Existing law makes certain business practices in insurance unlawful, including, but not limited to, an insurer requiring an auto body repair shop, as a condition of participation in the insurers direct repair program, to pay for the cost of an insureds rental vehicle that is replacing an insured vehicle damaged in an accident, or to pay for the towing charges of the insured with respect to that accident. Existing law also requires any insurer that conducts an auto body repair labor rate survey to determine and set a specified prevailing auto body repair labor rate in a specific geographic area to report the results of that survey to the Department of Insurance, which is required to make the information available upon request.

This bill would require an auto body repair shop participating in an auto body repair labor rate survey to declare specified information, including, among other things, that it meets specified equipment requirements and has proof of insurance, as specified. The bill would require an auto body repair labor rate survey to meet specified standards, including that it randomly surveys the number of shops necessary to obtain responses that achieve a minimum confidence level of 90% and a standard error of no more than 10%, and would provide for 10%. The bill would eliminate a rebuttable presumption that the insurer has attempted, in good faith, to effectuate a fair and equitable labor rate, rate or adjustment of the labor rate component of a written estimate, as specified, if the survey complies with the requirements of the bill. specified regulations. The bill would permit an insurer or auto body repair shop to negotiate a labor rate that is higher or lower than the prevailing auto body repair labor rate.

This bill would clarify its intent to supplement, and not to supersede, Department of Insurance regulations regarding methods for an insurer to conduct an auto body repair labor rate survey. The bill would also clarify that an insurer is not required to conduct an auto body repair labor rate survey, and that an insurer may use other methodologies to determine a prevailing auto body repair labor rate, as specified.