EXECUTIVE DIRECTOR’S MESSAGE
Time to Wake Up and Open Your Eyes! When you talk to a collision shop owner about the problems that are going on in the industry – some of which have been occurring for the past 50 years – you always get the same response: “That’s just the way it is, and there is nothing we can do about it.” As a result, not only are insurance companies dictating what they will pay for the repairs, but now they’re going so far as to dictate where the shop must purchase their parts from. If the shop refuses, the insurers limit the amount they will pay for the part to what it could have been purchased for at the vendor(s) they suggested. I am being told that certain insurers are taking this stand regardless of the quality of the parts being sold by the vendor and without any indication of where the parts actually come from or if their manufacturers guarantee them. This is wrong, not to mention a clear violation of the regulations governing the use of certain parts. What is amazing to me is that from what I’m hearing, shop owners are now trying to work around this situation rather than addressing it headon and saying no. I’ve been told that many shops are turning to dealers and demanding that they price match the parts prices that the insurers are willing to pay. Also, from the reports we are getting, some shop owners are just accepting whatever the insurer does because, as I mentioned earlier, they think there is nothing they can do about it. Actually, nothing could be further from the truth. It’s about time that the collision industry stops allowing insurance companies to bully them into doing whatever they want them to do and for whatever amount of money they want to pay. I know I’ve said this before, but I’m going to say it again and again until this industry wakes up and gets the message loud and clear: The insurance industry has no right to tell a collision shop where to buy their parts from. In fact, unless the insurer chooses the option in the policy to repair the property and become equally liable for negligent repairs, that company has no right to dictate anything. To be more specific, the rules that govern fair claim settlement practices actually state, “If the insurer intends to exercise its right to inspect, or cause to be inspected by an independent appraiser, damages prior to repair, the insurer shall have seven working days following 16 | New Jersey Automotive | May 2021
by CHARLES BRYANT
receipt of notice of loss to inspect the insured’s damaged vehicle, which is available for inspection, at a place and time reasonably convenient to the insured; commence negotiations; and make a good faith offer of settlement.” First of all, many insurers are not even inspecting damaged vehicles lately. Also, the rules clearly say, “IF the insurer intends to exercise its right to inspect” – and I stress the word IF. By placing this word up front, state regulations make it clear that an insurer can waive the right to inspect a damaged vehicle and negotiate a settlement. It appears that an insurer can just accept an estimate prepared by the shop of the insured’s choice and pay the claim. By the way, the regulation does not say to just send some photos of the damage instead of the insurer inspecting the damage or causing it to be inspected. To stress this point further, New Jersey’s licensing law that governs the practices of collision facilities makes it clear that it is a violation of law for a licensed auto body shop to make an appraisal of the cost of repairing a damaged automobile through the use of photographs, telephone calls or any manner other than personal inspection. Since that is the standard for the professionals actually making the repairs to damaged vehicles, it would appear clear that insurers should at least be held to that same standard. Yet, collision shops around the state are looking the other way (or may not even be aware of this rule) and going along with insurers, taking the photos and sending them in. Shop owners might want to know that the preparation of estimates based on photos rather than personal inspection of the damaged vehicle could lead to revocation or suspension of their shop’s license. Verification of this can be found in the yellow “Notice to Consumers” sign that should be posted in every New Jersey-licensed collision shop. There is a provision in the regulations governing fair claim settlements that does allow an insurer to dictate what it will pay for repairs rather than make all reasonable efforts to negotiate an agreement with the shop of the insured’s choice. However, insurers never or rarely ever choose this option. In fact, I have been in this industry for too many years to mention, and I have never seen or heard of an insurer ever choosing this option. The reason is clear: When the insurer chooses this option, which
