Samuel Sorich, president of the Association of California Insurance Companies, said his group worked with the bill's sponsor, State Sen. Lou Correa and the auto body repair industry to forge a law that served both groups.
Said Sorich, "We think it sets a good framework for addressing concerns that companies are arbitrarily setting caps on what they will pay for repairs. We think the bill's a good idea because it at least establishes a foundation for determining what improper activity is on the part of an insurer."
The bill establishes that methodologies accepted by both automobile repair shops and insurers are available to determine the cost of paint and related materials. It bars insurers from capping charges for paint or materials, defining “capping” as offering or paying an amount that is not related to a methodology accepted by both repair shops and insurers.
The top auto insurers in California last year, according to A.M. Best, were State Farm Group, with 12.3% market share; Farmers Insurance Group, with 10.9%; Mercury General Group, with 9.8%; Allstate Insurance Group, with 9.1%; and Auto Club Enterprises Insurance Group, with 8.9.%.