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Friday, 09 October 2020 16:41

AASP/NJ: Citing Section 64 Could Backfire on Insurers

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AASP/NJ Executive Director Charles Bryant, pictured at the New Jersey State House, urges collision repair facilities to fight for their right to be paid fair and reasonable labor rates for the quality repairs they perform. AASP/NJ Executive Director Charles Bryant, pictured at the New Jersey State House, urges collision repair facilities to fight for their right to be paid fair and reasonable labor rates for the quality repairs they perform. Provided courtesy of AASP/NJ

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Non-DRP shops in New Jersey often receive requests to match DRP pricing from insurers, who cite NJ 17:33B-36.1, commonly known as Section 64.

AASP/NJ Executive Director Charles Bryant has voiced a plethora of concerns related to this statute and its impact on labor rates, but he recently pointed out the “terms and conditions” phrase within Section 64 could require insurers to rethink their position on using it to force “prevailing” labor rates.

 

Section 64 begins: If an insurer has a financial arrangement with one or more auto body repair shops or other repair facilities or a network of facilities for the purpose of repairing vehicles covered under physical damage, collision or comprehensive coverages, the insurer shall not deny a person the right to select an auto body repair shop or other repair facility of his choice for repair of a covered vehicle, provided that such auto body repair shop or other repair facility elected by the person accepts the same terms and conditions from the insurer, including, but not limited to, price, as the shop, facility or network with which the insurer has the most generous arrangement.

 

Bryant suggested independent collision facilities, when asked by insurers to match a DRP shop’s prices, have the right to request a copy of the DRP agreement in order to review the terms and conditions.

 

Shops could also demand to join the DRP and, as a DRP shop, employ the ability to act as the appraiser. AASP/NJ offers a form to help member shops convey this message to insurance companies.

 

Referencing an unpleasant encounter with an insurer that cited Section 64 to mandate rates, Bryant recalled how the shop’s request for DRP benefits changed the insurer’s attitude from “very nasty and rude and obnoxious” to “the nicest people you want to see,” who were eager to resolve the shop’s problem.

 

Bryant’s argument provides a great reminder that DRP prices are not standard door prices; the shop with a DRP relationship has agreed to a reduced price in exchange for certain concessions, and an independent shop that likewise concedes to those price reductions are entitled to the same privileges in exchange for the pecuniary shortage.


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