Near the end of 2018, a Massachusetts Auto Damage Appraiser Licensing Board (ADALB) meeting included a conversation on whether an insurer has the right to dictate which supplier a shop or customer uses when doing an appraisal.
The conversation concluded with a discussion around a certain passage of CMR 211 133.04 in which leaders of AASP/MA took particular interest.
That passage reads: “When an insurance company specifies the use of used, rebuilt or aftermarket parts, the source and specific part(s) must be indicated on the appraisal. If the repairer uses the source and specified part(s) indicated on the appraisal and these parts are later determined by both parties to be unfit for use in the repair, the insurance company shall be responsible for the costs of restoring the parts to usable condition. If both parties agree that a specified part is unfit and must be replaced, the insurer shall be responsible for replacement costs such as freight and handling unless the repair shop is responsible for the part(s) being unfit or unless the insurer and repairer otherwise agree. As to such costs, nothing in 211 CMR 133.00 shall preclude an insurer from exercising any available rights of recovery against the supplier.”
On Dec. 19, AASP/MA asked its in-state members to contact the association if they had experienced issues adhering to CMR 211 133.04 because they were unable to buy or return parts from vendors listed on appraisals, had received estimates with numerous parts suppliers listed, or had vendors that wouldn’t do business with the shops because of part-return frequency.
The response from AASP/MA’s membership began arriving via email and phone within minutes of the request.
AASP/MA Executive Director Lucky Papageorg noted, “There was an immediate response from multiple shops across the state indicating they have had an issue with either being unable to get the aftermarket parts sourced on the estimate from the insurer or with the sheer number of sources listed on a single estimate. Many are vendors the shops don’t regularly use and, therefore, have no previous business relationship with … This causes a huge strain on the administrative process within a shop as well as a dramatic, detrimental effect on their cycle times.”
In fact, AASP/MA’s call to action uncovered additional problems Massachusetts shops have encountered.
Papageorg recalled, “Many of the shops I spoke to have been ‘blackballed’ by vendors because of their return rates. In some cases, the vendors are refusing to even take calls from specific shops. When the shops explain the predicament to the insurer, they are basically told that there is nothing the carrier can do. The insurer professes to having to write the lowest-priced parts and that the shop is on their own. The irony is that the decision to return these parts is a joint decision by the shop and the insurer that specified them in the first place. Yet, only the shop and the vehicle owner are being victimized. This occurs even when the insurer is told in advance of the situation, which only adds insult to injury.”
AASP/MA intends to utilize the information gathered from members to strengthen its position with the ADALB.
According to Papageorg, “We plan to have a strong voice in the forthcoming Advisory Ruling language. We are gathering hard evidence and examples of how this scenario is played out across the state on a daily basis. This evidence will show that, in many instances, independent shops are treated differently than ‘program’ shops in the parts specification process. We have it on good authority that ‘program’ shops have permission to order their aftermarket parts from vendors other than those listed on an insurance estimate. Also, if these ‘program’ shops are writing the original, they may write from---and order from---vendors that independent shops are not permitted to opt-out and purchase from.”
AASP/MA President Molly Brodeur was delighted by the volume of responses, as it indicates the association is fulfilling its goal of strengthening the collision repair industry in its state.
She shared, “It’s been incredible to start a new year with such a high level of involvement from our membership. As we’ve learned as a result of our industry outreach, this issue hits home for a lot of shops in the state. We’re encouraged that so many people have reached out to us, and we’re excited to be able to use their experiences to promote genuine and much-needed change to how shops, insurers and vendors work together during the repair process.”
For more information on AASP/MA, visit aaspma.org.