8.25.24 – Based on information received from its members, the Alliance of Automotive Service Providers of New Jersey (AASP/NJ) has confirmed a concerning trend in insurer business and reimbursement practices. AASP/NJ is finding a number of insurers reducing their reimbursements for the repairs required to restore vehicles to a safe condition and refusing to negotiate in good faith as set forth in New Jersey Administrative Code 11:3-10.3(e). Because of this, repairers are placed in the untenable position of seeking recovery from their customers for unpaid or underpaid operations necessary to return the vehicle to a safely operable condition, often creating large out-of-pocket expenses for New Jersey consumers in addition to their premiums and deductibles. In an effort to educate consumers, legislators, and automotive professionals, AASP/NJ has created the “Collision Repair Consumer Protection Initiative” (CRCPI).
The CRCPI’s goal is to draw attention to the fact that, due to advancements in automotive materials, manufacturer repair requirements and advanced safety features, vehicles have become extremely complex and repairing them properly is exponentially more complicated than in the past. Even seemingly simple operations, such as repairing a scratch on a bumper, can be extremely difficult, requiring a multitude of considerations and operations to ensure the vehicle acts, responds, and protects its occupants as designed. This problem is compounded when repairs are more complex.
An additional undesirable consequence of insurers’ denial of reimbursement for required procedures or under indemnification is the impact on repair quality. Many New Jersey motorists do not have the resources to make up for the insurers’ underpayment, and shops are placed in a position where it becomes necessary to either “cut corners” to repair the vehicle (potentially placing customers, the repair shop, their employees, and the motoring public in harm’s way), or refuse to repair the vehicle in an effort to protect their businesses and employees.
As we live through these times of runaway inflation and rising costs, insurers have seen double-digit percentage premium increases and a sharp reduction in loss payouts. Many insurers are seeing record profits and huge insurance executive compensation packages to the tune of millions of dollars, all at the expense of New Jersey policyholders, at a time when many in the state struggle to provide for their families.
AASP/NJ’s concern is the proper repair of today’s advanced vehicles as well as the survival of thousands of small employers in New Jersey who employ tens of thousands of people seeking to provide for their families while working in this industry. And most importantly, the safety of the motorists utilizing New Jersey’s roadways.
AASP/NJ rejects the often misguided insurer argument that this initiative will increase insurance premiums for New Jersey residents. These claims are made while witnessing huge internal profits and excessive executive compensation packages throughout the insurance industry.
Through this initiative, AASP/NJ hopes to create an open dialogue with all stakeholders in the process: legislators, insurers, repairers and all New Jersey consumers. Their goal is to provide the premium-paying policyholders of New Jersey with complete, safe, and proper repairs to their vehicles, along with the right to choose the repair shop of their choice.
AASP/NJ encourages anyone who may find themselves in this difficult situation to file a complaint with the New Jersey Department of Banking and Insurance (NJDOBI) and, more importantly, to contact their local Congressman, Assemblyman or State Senator to bring awareness to the issue of consumer safety at risk due to insurers’ underpayment/lack of payment.
For more information on the CRCPI or to further discuss AASP/NJ’s position on this issue, please contact AASP/NJ President Ken Miller at aaspnj@gmail.com or (973) 949-3733.