A California bill up for an Assembly committee hearing Wednesday would allow methodologically ludicrous insurer surveys to count as a “good faith” effort to determine a labor rate. Assembly Bill 1679 essentially gives a stamp of approval to all of the bad behavior the California Department of Insurance recently sought to check.
On Jan. 1, new CDI regulations formally took effect guaranteeing that carriers had a “rebuttable presumption” of good faith on labor rates if they chose to follow a standardized labor rate survey format and methodology to determine the “prevailing rate.” (Carriers aren’t required to follow the survey — or even conduct a survey at all.)
This regulation had been in the works for five years, and the CDI heard comments from insurers during that time. Insurers didn’t have to comply until Feb. 28.
What does this mean for insurers? Less insurance reimbursement for damage to your vehicle based on insurance companies being allowed to use bogus surveys to determine reimbursement rates. This would cost drivers larger out of pocket expenses, which would cause a huge financial burden for low-income drivers. The Assemblymembers support of this bill is confusing considering she was recently lauded for her poverty bill.
Why are Black politicians consistently pushing legislation that hurt some of the poorest people in their district?
Read the full text of AB-1679 Motor vehicle insurance: auto body repair by clicking here.