California Commissioner Issues Auto Collision Repair Regulations

December 19, 2016

California Insurance Commissioner Dave Jones issued new Auto Collision Repair Labor Rate Survey Regulations in early December that he said will increase consumer protections when a damaged vehicle is repaired.

The California Department of Insurance over the last several years has worked on regulations regarding automobile collision repair claims with insurance companies. The regulations went through a formal public review process and were drafted and revised with input from consumers, insurers and repair shops.

Insurers limit payments for auto collision repairs based on labor rates derived from insurer-created labor rate surveys, which Jones said did not fairly measure labor rates. Consumers are left having to pay the difference between the actual labor cost of the repair and what the insurer was willing to pay based on its labor rate survey, according to Jones.

The new regulation sets forth voluntary standards for insurers to accurately and reliably survey auto body repair labor rates to ensure they are paying the reasonable and proper amount, he said.

The Office of Administrative Law approved the commissioner’s regulation earlier this month.

The regulation goes into effect on Jan. 1, 2017. However, these newly adopted regulations are part of the Fair Claims Settlement Practices Regulations, which contain a delayed compliance date in order to give insurers, who choose to use these voluntary regulations, additional time to comply. The earliest compliance date is Feb. 28, 2017.

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