AB 121

Current law prohibits an insurer that issues a motor vehicle insurance policy

that covers the repair or replacement of motor vehicle glass from conditioning the

coverage on whether the insured or a third party making a claim under the policy

obtains services or parts from a particular vendor specified by the insurer. This bill

expands that prohibition. Under the bill, an insurer that issues a motor vehicle

insurance policy that covers the repair of a motor vehicle may not condition that

coverage on whether the insured or a third party making a claim under the policy

obtains a damage repair estimate or services or parts from a particular garage, repair

shop, or other vendor specified by the insurer. In addition, if an insured or third party

makes a claim for the repair of a motor vehicle, the insurer must inform the insured

or third party that they may select any garage, repair shop, or other vendor for a

damage repair estimate or the repair and that the insurer will cover all reasonable

and necessary costs of the repair regardless of which garage, repair shop, or other

vendor they select. The insurer also must inquire whether the insured or third party

has selected a garage, repair shop, or other vendor for a damage repair estimate or

the repair and may make a referral to a garage, repair shop, or other vendor if the

insured or third party indicates that he or she has not selected a repair shop or

requests a referral. The bill requires that every motor vehicle proof of insurance card

issued after the effective date of the bill contain a notice that insurance companies

are prohibited from requiring that repairs be made by a particular repair facility.

Also under the bill, an auto body repair facility or automobile insurance claim facility

must post in a conspicuous location a notice that insurance companies are prohibited

from requiring that repairs be made by a particular repair facility. In addition, an

auto body repair facility or an automobile insurance claim facility must include that

same notice at the top of every motor vehicle repair estimate that it prepares.

The bill provides that an insurer that pays for the repair of a motor vehicle must

pay for the repair at the same rate that the general public pays in that local market

area, unless the insurer and repair facility have an agreement otherwise, and that

the insurer may not limit or discount the amount paid on the basis that the repair

would have cost less if it had been made at a repair facility specified by the insurer.

The bill prohibits an insurance adjuster from preparing a vehicle damage estimate

or from altering one prepared by another party without first physically inspecting

the damage to the vehicle. The bill also prohibits an insurer or anyone acting on

behalf of an insurer from unilaterally and arbitrarily disregarding a repair operation

or cost identified under a damage repair estimate system.