TALES FROM THE CRYPT

Have you had a bone-chilling experience with the New Jersey Department of Banking and Insurance (DOBI)? Did their lack of concern about safe and proper repairs leave you cold with dread about how many lives could be lost on Garden State roadways? New Jersey Automotive wants to hear your horror stories! Email chasidy@grecopublishing.com to share your tale.

by CHARLES BRYANT

over. When I inquired as to what the basis for this position was, I was informed that the insurer had no basis for the denial of payment other than the fact that the insurer was not going to pay.

At first, these responses had me scratching my head for a minute as I tried to figure out what law, rule or regulation had changed that would give an insurer the right to refuse to pay for certain damaged items or necessary procedures to repair a damaged vehicle safely and properly. In the past, we have run into insurers refusing to pay for one or two minor items, or not paying as much as the shop was asking to be paid, but nothing like what I am hearing now. Well, guess what? Nothing has changed that would allow an insurer to simply take a position that they had paid all they were going to pay simply because they had paid all they wanted to pay. Nothing has changed that would allow an insurer to dictate what they are going to pay, rather than negotiating an agreement with the shop of the insured’s choice. That is, however, unless the insurer had chosen the provision in the auto policy to repair the property, rather than settle the claim in money. Now, I know this statement is going to cause some confusion to many in the collision, so please allow me to explain.

Although most shop owners are not aware of it, the standard auto policy has a provision in it that allows the insurer to choose to repair the property, which means that when an insurer chooses this option they get to decide who will repair the damaged vehicle, how the vehicle will be repaired, what kind of parts will be used and how much the insurer will pay for the repairs, even including the labor rate that will be paid. In other words, the insurer basically becomes the contractor for the repairs. However, what insurers are not mentioning when they choose this option is that they become liable for negligent repairs and the cap on the policy is broken. This is why an insurer will rarely, if ever choose this option. They just act like they have and attempt to dictate what they will pay for the repairs without actually selecting the repair option. That is exactly what is taking place in the industry right now, based on the Hotline calls we are receiving on a regular basis.

Collision shops need to better understand what this is all about in order to deal with it when an insurer attempts to dictate, rather than make all reasonable efforts to negotiate an agreed price to repair a customer’s vehicle. This is required by the New Jersey regulations governing fair claim settlement practices. If you are a shop owner and a member of AASP/NJ, please feel free to call the AASP/NJ Hotline to get a better understanding of how this works and how to deal with this when it occurs in your shop. If you are not an AASP/NJ member, I would strongly suggest that you contact us immediately and become a member so you will have the information and knowledge of how to deal with this when it occurs in your shop. Remember: United we stand, divided we fall. I can be reached on the AASP/NJ Hotline at (732) 9228909, or by email at Setlit4u@msn.com. Thank you.

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