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NAMIC Pleased California Auto Repair Bill Modified for Study

INDIANAPOLIS (April 7, 2006)-In the wake of stiff industry opposition, a California proposal that would have have impeded consumer access to affordable auto repairs has been sufficiently mitigated for now, said a spokesperson for the National Association of Mutual Insurance Companies (NAMIC).

NAMIC, through its state advocacy partner, the Personal Insurance Federation of California (PIFC), filed a letter of opposition to SB 1492 which was modified on April 5 to allow for additional study by its sponsor, State Senator Jackie Speier. As amended the bill passed out of committee without any "no" votes.

According to NAMIC's western state affairs manager Christian Rataj, SB 1492 as originally drafted would have permitted an insurance claimant to secure any three auto body repair estimates from licensed auto body repair dealers of their choice, and the average cost of these three estimates would have created a "rebut table presumption" in court that the average estimate is "reasonable."

"The pre-amendment version of SB 1492 was of grave concern to the insurance industry, because the bill would have required a judge or jury to accept, as a reasonable amount, the average of any three auto repair bids submitted by a claimant to an insurer, regardless of the fact that any or all of the bids could be inconsistent with standard auto repair industry market rates," stated Rataj.

"In effect, the proposed pre-amendment legislation would have shifted the 'burden of proof' onto the insurance carrier and required the insurer to disprove the reasonableness of the plaintiff's claim that the auto repair charges are reasonable and consistent with the contractual provisions of the insurance policy. This shifting of the 'burden of proof' would have been inconsistent with the evidentiary rule of law that the plaintiff carries the 'burden of proof' as to the contentions made in its lawsuit."

As stated by PIFC's Vice President, Michael Gunning, in his letter of opposition, "we question how the average of three estimates can be deemed by statute to be more credible in court than an insurance company's prevailing competitive price, which is derived from an extensive, scientific, and credible survey of scores of body shops in any given marketplace."

"NAMIC and the insurance industry actively opposed the pre-amendment version of the legislation, because the 'rebut table presumption' provision of the bill would have likely lead to the filing of groundless and frivolous litigation, and would have adversely impacted an insurance carrier's ability to assist consumers in securing high-quality and cost-effective auto repair services," Rataj said.


For further information, contact
Christian J. Rataj
(970) 204-6695 Tel
(317) 879-8408 Fax
crataj@namic.org

Posted: Monday, April 10, 2006 12:00:00 AM. Modified: Monday, April 10, 2006 3:50:34 PM.

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