6 minute read
EXECUTIVE DIRECTOR’S MESSAGE
Insurers Have to Stop Disregarding the Rules!
by CHARLES BRYANT
In recent months, AASP/NJ’s Hotline has been ringing off the hook with members expressing their dissatisfaction with the way insurance companies are conducting business. Shops have reported they have consumer’s vehicles sitting in their shops waiting for insurance companies to inspect and work out an agreement on the cost so they can commence the repairs. The reports of the delayed inspections are not limited to the first inspection so that the repairs can commence; these delays are also related to supplement inspections mandated by insurers when additional damage is discovered after the repairs are underway – which is almost always.
Many insurers are insisting that collision shops participate in a virtual inspection of damaged vehicles or are requiring the shops to take photos of the vehicle and that.” What makes things even worse, even when certain shops give up and go along with the insurer, is when the shop gets the estimate back from the insurer based on this photo-based virtual process, it only represents a fraction of the actual cost of the repairs. Then, the shops have to spend an enormous amount of time attempting to justify the cost because this process simply cannot be properly performed based on photos, PERIOD! Vehicles are currently backed up, sitting in collision shops across the state while waiting on insurers to perform the self-imposed inspections of the damage – either because the attempt to prepare the estimate was based on photos or due to what simply appears to be a lack of employees available to perform the inspections. Many insurers have let many or most of their appraisers go
damage, prepare an estimate and then send the photos over to the insurer, along with an estimate of the damage. The insurers claim that they are implementing this new process of preparing estimates based on photos (or the virtual process) in order to expedite the repair process. In reality, the opposite is true!
First of all, when the insurer insists the shop participate in the virtual process, it requires the shop to download a program on their phone and then spend work time on the phone with the insurer performing the virtual process. The insurer does not only want photos of the damage; they usually want photos of all four corners of the vehicle, photos of the license plates, the speedometer, the interior of the vehicle, the trunk and under the hood. These services should certainly qualify as administrative time that shops are entitled to be compensated for. Yet, insurers are quick to make that same old statement, “We don’t pay for based on the false hope that they will be able to perform the vehicle damage inspections and prepare estimates virtually using photos, thereby allowing them to save millions of dollars on the salaries and related cost of the employees that would normally perform the inspections and prepare the estimates in order to negotiate with the shop. Well, it’s time for a wake-up call for the insurers!
Rules currently in place are designed to govern fair claim settlement practices in the state of New Jersey and throughout the country for that matter. One of the first rules pertaining to the inspection of damaged vehicles in New Jersey is the requirement of a time limit allowed for an insurer to perform the inspection of a damaged vehicle, if the insurer intends to exercise their right to inspect the vehicle or cause it to be inspected by an independent appraiser. In other words, the inspection of damaged vehicles is optional. The insurer can choose the right to
perform the inspection or basically waive the right to inspect the vehicle; however, if the insurer chooses the right to perform the inspection, the insurer must perform the inspection within the seven working days allowed for in the regulations, or basically waive the right to inspect the vehicle. (See provision below.)
N.J.A.C. Section 11:3-10.3 - Adjustment of partial losses (a) 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 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.
This rule regarding timely inspections was put in place for a reason – a reason that appears to be abundantly clear at the present time – and that is to address situations exactly like what is taking place right now. Cars are sitting in collision shops for weeks because of the delayed inspections, be it the initial inspection or supplemental inspection. Again, the purpose of the inspection rules is to force insurers to perform the self-imposed inspections in a timely manner with the goal of promptly arriving at an agreed price so the vehicles can be repaired and returned to the customer in a timely manner. (See the provision below.)
N.J.A.C. 11:3-10.3 (b) Negotiations must be conducted in good faith, with the basic goal of promptly arriving at an agreed
price. Early in negotiations, the insurer must inform and confirm in writing to the insured or the insured’s designated representative all deductions that will be made from the agreed price, including the amount of applicable deductible.
Although the rules in place are clear, insurers basically ignore them, insisting that collision shops perform services that they have paid for since insurance began. Well, it’s time that these rules get applied and enforced, and AASP/NJ is currently working on that exact issue. If you are experiencing these types of problems, we need to know.
If you are an AASP/NJ member and are faced with vehicles backed up in your facility as the result of delayed inspections or issues related to photo estimates, call the AASP/NJ Hotline at (732) 922-8909 and report what is going on. We will be able to provide assistance.
NJA
Co-celebrating decades of creating chemistry between two industry leaders
Here’s to 235 years of combined service excellence
This year, as Albert Kemperle Inc. celebrates its 80th anniversary, BASF also celebrates its 155th anniversary. We are proud of our decades of partnership with BASF and years of serving the auto paint and body industry together. Kemperle’s founders would be proud of this relationship and the growth their company has experienced because of it.
Today, as we look forward to many more decades of service to our customers, we find ourselves filled with gratitude. The creativity, hard work, and sense of responsibility of the people working for our two companies have made us what we are today.
Thank you for your many years of loyalty.
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