California Department of Insurance
Choice of Auto Repair Shops
When an automobile is damaged by collision, vandalism, theft, or fire, a consumer must decide where to take the automobile for repairs. Some insurance companies maintain lists of "preferred" auto body repair shops, which the insurance company might recommend the consumer use. Remember, the consumer has the choice of whether or not to use an insurance company's preferred shop.
California insurance regulations contain specific requirements that insurance companies must follow when they direct a consumer to a company recommended repair shop. These requirements are contained in section 2695.8(e) of the Fair Claims Settlement Practices Regulations:
"(e) No insurer shall:
- Require that an automobile be repaired at a specific repair shop; or,
- Direct, suggest, or recommend that an automobile be repaired at a specific repair shop, unless,
a. such referral is expressly requested by the claimant;
b. or the claimant has been informed in writing of the right to select the repair facility; and,
c. the insurer that elects to repair a vehicle or directs, suggests, or recommends that a specific repair shop be used, shall cause the damaged vehicle to be restored to its condition prior to the loss at no additional cost to the claimant other than as stated in the policy or as otherwise allowed by these regulations.
- Require a claimant to travel an unreasonable distance either to inspect a replacement automobile, to conduct an inspection of the vehicle, to obtain a repair estimate or to have the automobile repaired at a specific repair shop."
Under California Insurance Code §758.5 an insurance company cannot require that an automobile be repaired at a specific repair shop. However, an insurance company can recommend that an automobile be repaired at a specific repair shop under the following conditions outlined by law:
The consumer specifically requests a recommendation from the insurance company to a repair shop.
The consumer has been informed in writing of the right to select a repair shop of his or her choice.
If the consumer agrees to use the recommended repair shop, the insurance company must restore the damaged vehicle to its condition prior to the accident or loss with no additional cost other than as stated in the policy or as otherwise allowed by law.
If the company makes an oral recommendation to a repair shop, and it is accepted by the consumer, then the company must follow the oral recommendation with the prescribed written notice within five calendar days as specified by law.
If the vehicle is repaired at a shop chosen by the consumer, the insurance company must pay the reasonable costs to repair the vehicle in a workmanlike manner. The insurance company is prohibited from limiting or discounting reasonable repair costs based on charges that would have occurred if the vehicle had been repaired at the company's recommended repair shop. Also, the insurance company must stand behind the repairs of the recommended shop if the vehicle is not repaired properly.