Legal experts are warning against the possible implementation of a new law that will allow insurers to pressure policyholders into honoring a specific repair shop. Under current California state laws, insurance companies are prohibited from steering their clients to the firms’ preferred body shops. A new bill sponsored by the industry is set to change all that.
Democrat assemblywoman Mary Hayashi introduced AB1200 recently in a bid to relax the regulations surrounding California’s consumer protection measures. Industry players have been lobbying for several years now to allow the importation and use of replacement parts from other countries. However, their attempts have been thwarted by strong opposition from consumer advocacy groups. Critics of the proposal say that Americans motorists will be at danger once imported replacement parts are allowed into the U.S. They add that these parts do not comply with the quality requirements of the car industry. Numerous failures of these parts can result to increased incidents of accidents and more repair costs for car owners to shoulder.
Some critics of the proposal have also expressed concern that the insurance companies are supporting the bill to minimize expenditures by buying cheaper imitation parts in lieu of original American parts. Insurers have also been accused of harassing, deceiving, or forcing policyholders into availing of the repair shops favored by the providers.
Legal questions have also been raised regarding the insurance companies insistence on using imitation parts during auto repairs. Even if car owners object to this practice, the insurers still reserve the right to select the source of the replacement parts. Experts say that deep within the many policies is a provision allowing providers to have the final choice, with most insurers opting for the cheaper parts over more expensive original parts.
There have even reports that a large insurance provider recently ordered affiliate body shops to use imitation parts on vehicles more than a year old or having been driven 12,000 miles. Critics allege that repair shops have been told to replace any damaged parts with cheaper imitations to save costs.
Legal specialists say that the best way to avoid becoming powerless would be to pore over the terms in the insurance policy. Car owners should pay close attention to the smallest provisions indicated in the terms and conditions of the insurance coverage. Californian motorists can also write state lawmakers and urge them not to support AB1200.