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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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“Insurers typically refuse to provide a copy of the terms and conditions of their DRP agreements [because] they contain a strong non-disclosure proprietary and confidentiality statement; insurers do not want them to become public, and for good reason," Bryant said. "Insurers are never going to offer non-DRP shops the same terms and conditions as their DRP shops.

 

"The insurance industry uses approximately 15% of an area’s shops, which they allow to participate in their DRP programs, to control the other 85% of the shops in any given area. If insurers were to allow non-DRP shops the same terms and conditions as their DRP shops, it would defeat the purpose of the DRP programs.”

 

The remaining verbiage in Section 64 raises additional concerns. It concludes: Prior to undertaking any repair, the auto body repair shop or other repair facility of the insured’s choice shall provide the insured with written notification, in a form to be established by the Commissioner of the Department of Banking and Insurance by regulation, that, by agreeing to have the auto body shop or other repair facility of the insured’s choice accept the same terms and conditions from the insurer as the shop, facility or network with which the insurer has the most generous arrangement, the insured may jeopardize any manufacturer or dealer warranty or lease agreement. Such notification form shall be signed by the insured prior to the undertaking of any repair.

 

Although Section 64 was made a statute in 1998, the Department of Banking and Insurance has yet to develop a form for vehicle owners to sign that indicates “letting you fix the car the way that we would have it fixed is going to void your warranty,” Bryant explained, expressing doubt that any government agency would agree to create such a form.

 

While Section 64 has been described as an anti-steering law since it specifies “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,” Bryant compared Section 64 to “a bucket with a hole in the bottom of it.”


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