AASP/MA Defends Shops’ Right to

Shop’s charges and the amount the insurer pays for the Repair Work, the claimant is entitled to compensation for this difference from the insurer,” warning that “such a suggestion might be false and might subject the Repair Shop to penalties” which could include suspension or revocation of the shops’ registration.

Are shops in the wrong for charging a copay? Unlikely!

“It is quite clear that the DOS has been weaponized by the insurance industry against the collision industry and specifically against those shops who have made the bold move to collect what they are worth for the repair procedures they have performed on a vehicle to restore it to road worthy functionality, to restore these vehicles to as close to pre-loss condition as possible, while accepting the full liability in doing so,” said AASP/MA Executive Director Lucky Papageorg. “There is nothing wrong with getting paid fairly and adequately for the work that you do and passing on any costs not covered by the vehicle owner’s insurer in the form of a copay.”

Of course, there are some stipulations in this assertion. For example, shops should never imply or promise that the insurer is legally obligated to reimburse the consumer for the amount of a copay; however, despite the DOS’s claims to that effect, this allegation appears to be false, according to a letter addressed to DOS Director James P. Cassidy, Jr. and written by Attorney James A. Castleman, Esq. on behalf of the “Alliance,” to request that the DOS “issue an official clarification of the Notice, correcting facts

The Notice was issued prior to the DOS contacting the shop in question or any of the three insureds, essentially treating the insurers’ complaints as indisputable when, in fact, subsequent investigation conducted by Castleman and AASP/MA revealed that the shop accused of these “misrepresentations” actually adhered to all legal requirements as it relates to this situation:

The shop informed its customers in advance that it may charge more than the insurer would agree to pay and that, if that were the situation, the customer would be liable for the additional charges. Customers were made aware that nothing dictates that an insurer must pay all of the shop’s charges or that the customer is entitled to any specific amount of compensation from their insurer; although the shop suggested that the vehicle owners could request compensation from their insurers, they specifically clarified that there was no guarantee that the insurer reimburse them for the copayment.

Furthermore, “NONE of the insured customers involved in the three subject claims filed any complaint with the Division of Standards (or any other agency) regarding the shop’s conduct, and ALL appeared to have acknowledged that they understood the shop’s terms and that there was no guarantee that they would get paid the full amount of the shop’s charges from their insurer,” Castleman wrote.

Castleman’s letter also suggests that “it appears suspect to my client that each of the three documents is essentially in the same format, even though there are three different insurers involved, which leads my client to wonder whether these three insurers may have agreed together to initiate some type of action against the repair shop.”

Ultimately, it appears that these insurance companies complained to the powers-that-be that shops are making them look bad by refusing to accept underpayment or perform substandard repairs to the vehicle owner’s detriment.

“Insurers have had to resort to this recent scare tactic because they are hearing from so many disgruntled and enraged vehicle owners on a daily basis,” suggested Papageorg. “And pressure from the ‘Alliance’ has caused insurers to pursue these additional actions and tactics which could very well blow up in their face.”

Castleman’s letter expresses concern that “multiple Massachusetts auto insurers are now quoting language in the Notice (even if sometimes out of context), to represent or imply to their insureds that certain conduct engaged in by collision repair facilities is illegal, when the particular conduct is, in fact, legal.” More specifically, insurers have interpreted a statement in the Notice that reads, “any suggestion by a Repair Shop to a customer or potential customer that an insurer will or must reimburse the customer for that “an insurer often IS obligated to pay such additional amounts, but just does not do so until it is told by an arbitrator or a judge that it must pay[...] Your statement implies that, until they are challenged through legal process, insurers essentially are given carte blanche to pay whatever they want to pay (albeit within certain broad limits) when making a claim payment. Indeed, that is the way that multiple insurers appear to be interpreting your Notice.”

Most bizarrely, Castleman observed that the three aforementioned claims were all third-party property damage liability claims, which are “not governed by most of the statutes and regulations referenced in your Notice, nor by insurance policy language that could otherwise limit an insurer’s payment obligations. Rather, third party claims are governed by general