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Letter to the Editor

CAA Applauds California Senate Bill 1648 Passage in Insurance Committee

The California Autobody Association was successful in passing SB1648 out of the Senate Insurance Committee on May 1st at the state capitol in Sacramento. This was a major hurdle for the bill, with the vote ending up 5-0 in favor of SB1648, which will make it illegal for insurance companies to own body shops in the state of California.

The insurance industry was heavily represented during the hearing in opposition of the bill. Their position was that the bill deprives shops of needed capital from insurers who want to invest in shops. Allstate Insurance Company called the bill "anti-competitive".

The California Autobody Association was also heavily represented and strongly in support of the bill. The insurance committee heard testimony from David McClune, CAA Executive Director, Jack Molodanof, CAA Lobbyist, Yumi Vaught, CAA current President, Rick Johnson, CAA Vice-President, Kelly Swenson, CAA Treasurer, Don Feeley, CAA past president, and Curt Nixon, CAA Legislative Committee Chairman. The CAA's position is that this bill will lead to anti-trust violations, limit the consumer's choices, and create unfair competition.

In addition to the CAA supporting this bill, the California Motor Car Dealers Association said that if insurers were to own shops and control the repair market, consumers would be unlikely to be able to pick a repair shop based on which one would do the best work. Also, the Consumers for Auto Reliability and Safety believe that insurer ownership of shops will lead to reduced quality of repair work as shops will be guided by the bottom line, not how well a fender fits.

The bill will now go to the state senate floor for a vote.

The California Autobody Association (CAA) is a not-for-profit organization comprised of over 800 collision repair businesses and associated professionals belonging to the collision repair industry.

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