Understanding Your Rights and What in The World They are Talking About

by Stephen G. Regan

Being involved in an automobile accident is bad enough. Unfortunately, it is not uncommon for

consumers to find out that the worse is yet to come (barring serious injury or worse). That's when

consumers have to try and sort out the terms of their insurance policy, how the car will be repaired and

by who, and what all these new words they never heard before actually mean.

With drivers averaging three accidents in their lifetime, it is understandable that consumers know very

little about their insurance policy and the collision repair industry. Thus, even for the most minor of

accidents, consumers may find themselves in uncharted territory. This month, in our sixth and final

article, we will try and help you understand what you are entitled to (as it relates to the collision repair

process) under the terms of your policy, your rights under the law and also provide an explanation for

some of the more confusing terms you may hear from your insurance company, agent, or collision repair

shop.

What You Are Entitled To

In general your automobile insurance policy entitles you to be paid an amount equal to the cost of

repairing the damage to your vehicle (with appropriate coverage), as well as to others on your behalf

whose vehicle you may have damaged. Your insurer has a legal responsibility to do this because your

insurance policy is actually a "contract" of insurance between you and the insurance company you

choose.

However, exactly what you are entitled to will depend on several factors. First, you should review your

insurance policy after an accident. The state of Massachusetts requires one uniform policy that all

insurers must use. Within the 12 Parts that govern the Compulsory and Optional provisions the policy

clearly states in almost every section what they will not pay for and why. In addition, your rental cost or

other optional insurance you may choose to purchase can also affect how much you are entitled to.

Isaac Ahtof, owner of Elm Park Auto Body in Worcester, once said that after someone is involved in an

accident only then do they realize how important it is that they understand their insurance policy and

what is involved in settling the claim and choosing the right place to fix the car.

"It's not like it is something we deal with daily or weekly, like buying food, clothing or furniture," said

Ahtof. " So people should periodically look at their automobile insurance policy so they understand it a

little better before they need it. Accident happen in a flash, and when you have limited familiarity and

little opportunity to research what you are buying you are clearly in need of help," he added.

Your Right To Choose a Repair Facility

As has been stated before, remember you have an absolute right under the law to choose where your

car will be repaired. "Steering," as it is commonly referred to, is the act of trying to influence a

consumers choice of collision repairer. To be clear, steering is illegal in the state of Massachusetts, but

does persist, and it is perhaps the largest single issue of contention between insurers and collision

repairers in Massachusetts and nationally.

One of the biggest contributors to steering, intentional or not, are the pamphlets, brochures, and letters

by insurers that do not provide a clear picture of claimant's rights under their policy and the law as

required by Massachusetts regulations. Under the law insurers must provide a list of all registered repair

shops by county, but distribute a list that contains highlights and asterisks next to some shops and

nothing next to others.

With this list there is often other material that references a "guarantee" by the insurer if they choose

one of the highlighted shops and an implication that if they choose one that is not highlighted they "may

be" responsible for part of the cost of the repair. These highlights, guarantees, and additional collateral

material given to a claimant when they contact the insurer to inform them of the accident are clearly

designed to direct claimants to shops participating in the referral program.

To be fair, there is no direct reason to believe that a referral shop will do any better or worse repair than

someone who is not affiliated with the insurer program. However, the agreement between insurer and a

referral repair shop usually limits what the repairer can charge for labor or storage and may require the

use of non-original parts. These limitations may or may not affect the repair, but we at MABA believe

that consumers are better off when they choose a facility on their own, without any influence from their

insurance carrier.

"If we are ever to be successful in establishing a free market system where repairers compete on their

ability to provide quality service at reasonable cost then we need to address the issue of misleading

information being provided to consumer by insurers," said Chad Sulkala, Chairman of MABA's Insurer

Relations Committee.

What Did They Say?

Like any other industry insurers and repairers have words and phrases they each readily understand but

seem like a foreign language to most everyone else. Listed below are some of the common phrases and

words that one may encounter when dealing with an insurer, an insurance agent, or a collision repairer

that even Webster may not have an answer for.

Aftermarket Parts - these are replacements parts that may be used by a repairer that are not made by

the manufacturer of your car, such as Ford, GM, or Toyota.

Appraisal - this is the form used by insurers and repairers that list the damage to your car, the

procedures needed to fix it, and the hours estimated for each procedure. This is also sometimes referred

to as an "estimate."

Appraiser - means any person licensed by the Auto Damage Appraiser Licensing Board to evaluate

motor vehicle damage and determine the cost of parts and labor required to repair the motor vehicle

damage.

Claimant - means any person making a claim for damage to a motor vehicle for either first or third party

damages.

Supplemental Appraisal - either a repair shop chosen by the consumer or the consumer themselves

may request a supplemental appraisal when they believe that the initial appraisal of the insurer does

not itemize all the damage caused by the accident, or list all parts and procedures needed to restore the

damaged vehicle in accordance with the automobile insurance policy.

Referral Shop - a registered collision repair shop that enters into an agreement with an insurer that may

limit the amount the repairer may charge for parts, procedures, labor, or services. Independent Repair

Shop - a registered collision repair shop that has not entered into an agreement with an insurance

company.

OEM Parts - "Original Equipment Manufacturer" are replacement parts that are made by the original

manufacturer of your vehicle.

Total Loss - whenever the appraised cost of repair plus the estimated salvage may be reasonably

expected to exceed the actual cash value of a vehicle, the insurer may deem that vehicle a total loss.

Commonly referred to as "totaled."

Storage - a charge by a repairer to keep the vehicle secured after a car has been determined a total loss

and before the insurer makes a reasonable offer of settlement.

Labor Rate - the rate that a repairer charges by either an hour or unit for the services of the technician

repairing the vehicle.

First Party Claim - a claim made by an individual to his or her insurance company after an accident.

Third Party Claim - when someone is involved in an accident where they are not at fault and seeks to be

paid for their loss by the individual who caused the accident.

In Closing

On behalf of the Massachusetts Auto Body Association, I would like to thank the Telegram and Gazette

for allowing MABA this opportunity to educate consumers about the collision repair process and our

industry. We are hopeful that you have found the information provided over the last six months helpful,

educational, and useful. For copies of previous articles or if you have any questions about the your rights

when you have had an accident, or information on how to choose a repairer please call 1-800 ITS-MABA,

or visit the MABA web site at www.ITSMABA.com.