Dong Suk Choi, 52, of Union City; and Timothy Zen Powell, 32, of Palo Alto, were arrested July 1 and charged with multiple counts of automobile insurance fraud. Bail for the men was set at $50,000 each.
Of 28 reinspections, Farmers discovered that the shop had allegedly over-billed Farmers for repair costs on 20 vehicles. Choi and Powell allegedly repaired old parts when billing Farmers for a brand new part, or used inferior parts in some circumstances.
The alleged fraud is estimated to have cost Farmers approximately $15,000.
- * Consumers deserve access to all the information available about how and where to repair their cars following an auto accident, according to a number of insurance industry officials.
- AB 1200, authored by California Assemblywoman Mary Hayashi (D-Hayward) would enable every consumer to have the opportunity to make an informed choice about auto repair facilities. This proposed law arms drivers with necessary information by allowing insurers to provide details about repair costs, warranties and other benefits available under consumers’ policies.
- Four property/casualtytrade associations announced their support of AB 1200 including the Personal Insurance Federation of California (PIFC), the Association of California Insurance Companies (ACIC), the American Insurance Association (AIA) and the Pacific Association of Domestic Insurance Companies (PADIC). The four organizations represent more than 95 percent of auto insurers doing business in California. AB 1200 was to be up for a hearing in the Senate Business, Finance and Insurance Committee on July 1.
- “Existing law prohibits auto insurers from forcing a driver to use a particular auto repair facility,” said Michael Gunning, PIFC vice president. “Unfortunately current law fails to ensure that drivers get a complete picture of their auto repair options. Some body shops want to use current law to keep consumers in the dark about their options. AB 1200 guarantees that drivers can make a fully informed choice when selecting a facility to fix their car after an auto accident.”
- “When other states have enacted laws preventing insurers from educating their customers about their options including Direct Repair Programs (DRPs), courts have overturned these laws and strongly supported the benefits of consumer choice,” added Mark Sektnan, ACIC vice president. “Relying on a long line of cases involving commercial free speech, the court said that consumers benefit from more, rather than less, information.”
- According to Janine Gibford, AIA assistant vice president, state affairs, “Some in the auto repair business are spreading misinformation about DRPs and AB 1200. Their arguments lack credibility. Many insurers guarantee the work done by the shops in their direct repair programs. This serves as a strong incentive to get the job done right the first time. Insurers want informed claimants so they receive expert repairs from a shop with the necessary experience. The law will always allow the consumer to take their car to the repair shop of their choice.”
- Milo Pearson, PADIC executive director, added, “AB 1200 strikes an appropriate balance between the need for policyholders to understand the benefits of their policy and their right to select an auto repair shop without undue influence. A fully informed consumer can make the best choice for their situation.”