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AB 1852 – Bad for consumers

March 8, 2006 by Jonathan Stein

Assemblyman Leland Yee of San Francisco has introduced AB 1852 in the State Assembly. This bill would create a state board to certify generic crash parts as being the same as factory parts. Basically, a crash part is the part of the car that is damaged in an accident, such as a bumper or a hood. This bill would declare that a part that is certified is the same as a part that comes from Ford or GM or the other manufacturers. Not surprisingly, the bill has the support of the insurance industry and the Certified Auto Parts Association (CAPA), a trade group for manufacturers of parts.

This is a bad bill. Assemblyman Yee should pull it now. Here are a few reasons.

First, CAPA wants to be the state’s certifying agency. Think of it like this. I stand up and say that my fender is as good as Ford’s fender and then I approve it and, because I am officially recognized by the state, everyone must take this as being right. CAPA has a vested interest in helping its members get this bill approved. CAPA also will make more money if this bill is passed.

Second, the insurance companies want this approved because they make more money. If a part costs $150 from Ford and the body shop buys a cheaper part for $50, the insurance company saves $100. Multiply that times 10,000 claims, and the insurance company just saved $1,000,000. And, of course, there is no provision that your premiums are reduced. More profit for the insurance companies.

Finally, who is responsible if a CAPA approved part fails? What if the bumper does not meet the 5 mph standard and someone is seriously injured? Is CAPA going to pay for the medical bills? The manufacturer? I know that if my car is hit, it meets certain safety standards. That is one reason I bought the car. But, if this bill is approved and non-factory parts are used, who is going to take care of my medical bills when the car does not meet those same safety standards?

AB 1852 is bad for California. This bill should be withdrawn before it hurts Californians.

Categories: Auto Insurance, Claims, Insurance Operations, Law

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