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Thursday, 25 May 2017 18:17

Nevada Bill Addressing Total Loss Thresholds Does Not Move Forward

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A Nevada bill that would have revised the provisions governing total loss vehicles was pending a vote in the state Assembly before it was removed from the table. Now, all parties involved are looking to see how this might affect future decisions in regard to totaling a vehicle.

Assembly Bill 368 was introduced earlier this year by Robert Compan, vice president of the Nevada Insurance Council, and sponsored by Assembly Minority Leader Paul Anderson. The amended bill proposed to raise the threshold for a total loss to 80 percent. Currently, the threshold is 65 percent after exclusions such as paint/materials and electronic components are removed. The remainder of vehicles totaled by insurers receive a salvage title.


“We saw that as being an extreme safety hazard,” said Compan, who is also chairman of the Coalition of Nevada Insurance Lobbyists. “When a vehicle hits its threshold, the insurance company is not going to repair a vehicle that has exceeded its value. It creates confusion for consumers, the industry and for the body shops and their customers.”

487.800 NRS  Salvage vehicles: Duties of insurance company and relinquishing owner;  application for salvage title; sale of vehicle; rebuilt and restored vehicles; retention; exclusion of nonrepairable vehicles.

1. When an insurance company acquires a motor vehicle as a result of a settlement in which the motor vehicle is determined to be a salvage vehicle, the owner of the motor vehicle who is relinquishing ownership of the motor vehicle shall endorse the certificate of title of the motor vehicle and forward the endorsed certificate of title to the insurance company within 30 days after accepting the settlement from the insurance company. The insurance company or its authorized agent shall forward the endorsed certificate of title, together with an application for a salvage title or nonrepairable vehicle certificate, to the state agency within 180 days after receipt of the endorsed certificate of title.

The bill was originally sponsored by Barbara Buckley, the former Assembly Speaker. In 2011, the provision of electronic components was added to the legislation. Compan said it’s the most interesting statute of its kind in the country when you consider how the issue is handled across the 50 states. “They either allow the insurance company to determine when a vehicle is an economic total loss or they have some kind of threshold. They don’t put in ‘less paint materials and electronic components.’ With today’s modern-day cars, nearly every component of the car is electronic.”


The bill was on the chief clerk’s desk ready for a vote when Anderson decided not to pursue it at this time. “With all of the discerning language that was placed into the amendment, it’s just not worth passing right now,” said Compan.

He said the bill has little to do with total losses. “It has everything to do with whether a car gets branded with a title. “If you have to put safe titles on the cars, you would be putting a lot of unsafe vehicles on the road. Most people don’t understand. It’s not a body shop issue, it’s not an insurance issue. It’s a titling issue,” said Compan. He said they have reached out to body shops on numerous occasions to discuss the bill.


Compan said the next step is to have the minority leader ask the Department of Motor Vehicles (DMV) to hold workshops about this issue. “It’s something that has to get fixed. It can’t stay the way it is,” he said.


They are also working toward asking for regulations to be implemented during the 2019 legislative session that Compan said will regulate the body shop industry, similar to how it is done in New York “...where they will have mandatory audits of body shops. We’re going to ask that they create a whole new bureaucracy that will be paid for by the body shop industry.” He said it will be an enforcing division to ensure body shops are repairing cars properly and “not charging too much for unneeded and unnecessary procedures.”


Compan encourages shops to come to the table and discuss next steps. “They are going to have to sit down and realize there is a problem here and by doing that we can come together,” he said. “What I see happening is not only are we going to fix this statutory language I think it’s going to add another layer of bureaucracy that the body shops aren’t going to want. I would advise them that they should sit down at the table now.”


Autobody News reached out to the Nevada Collision Industry Association (NCIA) about the bill and how it would affect both the body shop industry and consumers.


Tim Waldren, northern president of the NCIA, shared the following:


“I don’t think the legislators saw it as a consumer-friendly bill and it wasn’t. It [the bill] takes away options for consumers because most of them don’t want their vehicles totaled. The collision industry wants to see the law continue to be a pro-consumer law. The legislature meets every two years so we’ll be involved as necessary. It’s important to inform the legislature how new language could affect consumers.”


Matt Gondini, southern president of the NCIA, provided the following comments from the southern chapter and said that everything is voted on by board members:


“Assembly Bill 368 is not needed. The NCIA believes the current statute does a great job of declaring total losses with the appropriate titling as well. The NCIA disagrees with what the insurers said about fewer cars totaling now since the electronic exclusion was passed in 2011. If anything, we would bet more cars have been totaled and titled as such, especially in the last few years, than in 2011 or 2012. Only the DMV can tell us for sure, of course.

Additionally, insurers described the current statute as confusing. The entire collision industry disagrees. The language is very straightforward and does clarify which electronic components are eligible for exclusion. It even allows for additional regulations, if needed, to further clarify these items.

To lose this electronic exclusion would be a disservice to consumers by giving insurers another way to total out a person’s car and this time blame it on the state laws. Currently, insurers have the ability to call any car a total loss, regardless of percentage. We believe they do this when the numbers work out to their advantage and call it an economic total loss. As a result, a consumer can lose a fully repairable car to the insurance as a total loss at a much lower percentage, such as 50 percent or even less.

Furthermore, the NCIA firmly believes that insurance companies can and should currently ‘salvage title’ every vehicle that is acquired by a settlement with the insurance company.”

In regard to Mr. Compan’s comments about working toward asking for regulations to be implemented where they will do mandatory audits of body shops to ensure body shops are repairing cars properly and not charging too much for unneeded and unnecessary procedures, the collision industry would welcome this. It would also hold the insurance companies responsible for making sure vehicles are repaired back to the manufacturers’ guidelines with no used, gray market or copy parts used.


Autobody News will continue to report updates about this bill and similar ones.

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