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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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“When a collision shop fails to surrender and take whatever the insurer wants to pay, the insurer engages in unlawful ‘steering’ activity by claiming that the shop is being unreasonable and overcharging; they then pressure insureds to have their vehicles repaired at specific ‘preferred’ repair shops that can afford to fix the vehicles at lower rates because of the high volume of work being steered to them,” he continued.

 

“This type of suit has to happen because of the unwillingness of greedy insurers to work these issues out and pay fair and reasonable rates for the procedures now required to safely and properly repair vehicles on the roads today.”

 

Insurers have also cited Section 64 to justify their refusal to pay for storage, since DRP shops wouldn’t charge them storage fees; however, according to Bryant, the statute only applies to repair, not storage.

 

Though Section 64 hasn’t been enforced since it was initially decided, Bryant reported hearing about it now and predicted, “That is going to become an issue.”

 

“Insurers have held labor rates down for years to an amount less than bicycle shops get paid for their services,” Bryant stated. “With today’s vehicles, those days are over. There are specific repair procedures that must be followed and have to be performed in order to put the vehicle back to a safe operating condition after it’s damaged in a collision.”

 

In a comparison he commonly makes between the insurance industry’s attempts to suppress labor rates and the game "Let’s Make a Deal," Bryant said, “The collision industry needs to make it clear that it will no longer participate in such an activity. Insurers should stop playing games in order to hold down labor rates to an amount that does not reflect a fair and reasonable amount for the services collision shops provide or the investment they made in the training and equipment required to properly repair these cars.

 

“[The collision repair industry] must insist on being paid a fair and reasonable labor rate for the work being performed and consider the training and equipment that is required to safely and properly repair these advanced automobiles,” Bryant added. “These issues are not going to get resolved by a divided industry.”


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