California Bill Could Have Raised Auto Insurance Costs

Car crashed into a treeAfter getting into a car accident, motorists turn to car insurance companies to find out how much their repairs will cost. Part of the repair cost is determined by what materials need to be replaced.

Earlier this month, a proposed bill in California that would have regulated aftermarket crash parts was not taken up, and therefore will not be voted on, by a state assembly committee. Aftermarket crash parts are the exterior sheetmetal and plastic pieces on a vehicle.

The proposed bill would have barred insurers from requiring non-original equipment to be used to replace vehicle parts after an accident. Typically, insurance agencies try to use generic pieces to save money. If the agencies were to be prohibited from directing the use of these parts, insurance costs would likely have risen, possibly with the result of an increase in premiums. The court documents note that generic items cost anywhere from 20 percent to 65 percent less than original manufacturer parts.

The only way auto insurance companies could have gotten away with using non-original pieces under the now-dead legislation would have been if the generics were proven to be of manufacturer-level quality. The proposal would also have required the insurer to pay the difference if any problems arose from the generic piece of equipment.

Those in support of the bill say that owners lose out on quality repair when generics are used, especially at a time when many people are trying to hold onto their vehicles longer.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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