BACKGROUND
Californians love their cars. Automobile insurance can be expensive and it is mandatory in California. California law also requires drivers to maintain automobile insurance. ACIC strives to ensure that California’s drivers have the opportunity to purchase adequate coverage at competitive rates.
Auto body repair is a major segment of automobile insurance claims costs, and these costs have risen steadily in recent years. Insurers must balance their customers’ expectations and legal requirements for quality and timely repairs with the need to control costs and keep premiums low.
To meet these twin objectives, insurers often engage in two approaches: (1) establishing direct repair programs with auto body repair shops to assure quality and price stability and (2) staying abreast of market activity to prevent payment of excessive charges.
A claimant is free to choose any body repair shop. If he or she chooses a shop in an insurer’s direct repair program, the insurer typically guarantees the quality of the work. In addition, insurers have the right to explain the benefits of their programs to claimants who might choose a shop outside of the insurer’s network. This is to ensure that claimants have all of the information they need to make informed decisions. Claimants are generally satisfied with direct repair programs as reflected in the minimal number of consumer complaints received by the Department of Insurance on this issue.
ACIC’S POSITION
ACIC believes that a claimant has the right to choose where his or her vehicle is repaired and the insurance company that provides coverage for the vehicle has the duty to explain repair options to the claimant so that the claimant is fully informed.
ACIC is also opposed to the practice of municipalities charging accident response fees when police or fire department personnel respond to a traffic accident. The role of the police and fire department should be to serve and protect not serve and collect. An additional fee for emergency services creates a hidden tax - we call it the "Accident Tax." In many cases, these fees are not covered by insurance so they must be paid by the accident victims. Even if covered by insurance, these practices will result in higher premiums.