Preserving marketplace competition, limiting fraud and enhancing safety are common goals that the insurers and auto repair shops share, the National Association of Independent Insures (NAII) announced Nov. 29 at a seminar in Las Vegas.
Enhancing sound public policy for replacement parts, salvage titles, diminished value policies, fraud prevention and safety issues are the among the two industries mutual interests, NAII Counsel Robert Hurns told attendees of the International Autobody Congress and Exposition’s (NACE) 2001 collision repair conference.
Hurns concentrated most on salvage title laws, replacement parts, diminished value, fraud and safety initiatives:
*Salvage title laws: Greater uniformity and consistency in salvage title laws will eliminate safe harbors for laundering and vehicle theft schemes as well as criminal conduct that ultimately affects the cost of motor vehicle insurance, Hurns said. To improve their effectiveness in determining vehicle related fraud, salvage title laws should affect and be enforced against all vehicle owners and vehicle businesses-including individuals, body and repair shops, new car dealers, salvage recycling firms, junk yard owners and auto auctioneers.
*Replacement parts: Preserving a free market for the use of quality competitive replacement parts will result in more consumer choice and savings by lowering replacement part costs and generating more competition in the marketplace, Hurns said. Since the introduction of generic crash parts in 1978, competitors have lowered their prices significantly-by 20 to 50 percent in some cases-causing the Original Equipment Manufacturers to reduce their prices. Debate on the use of competitive crash parts since the mid-1980s has resulted in 40 states putting diverse laws on the books to govern the use of these parts, stretching from liberal notice requirements to prohibition on use without consumer consent.
“NAII wants to work with the auto repair industry to set a consistent standard for the certification and regulation of the high-quality, lower-cost aftermarket vehicle parts by using the Certified Automotive Parts Association (CAPA) as the certifying authority,” Hurns said.
*Diminished value: Whether or not an insured is entitled to recover for “diminished value” ultimately depends upon the language of the insurance contract. Most state courts have dismissed lawsuits based on the theory of diminished value solely on the basis of contract language. “Most ‘nonvalued’ personal auto policies provide that the insurer is not liable to pay its policyholder the difference between the value of the vehicle before and after a loss in addition to the cost to repair the vehicle,” Hurns said.
So far, 31 states approved policy language that excludes diminished value payments for first-party physical damage. NAII hopes to work with the auto repair industry for that trend to continue. “Basically, if someone says they are entitled to diminished value, they are telling the repair professional that he or she is incapable of restoring the vehicle to pre-accident condition,” Hurns said. “The repair community should take exception to this accusation.”
*Fraud: NAII encourages auto repair specialists to participate in the National Insurance Crime Training Academy (NICTA), which provides coordinated training materials and training for agents, underwriters and adjusters and helps promote public education to reduce fraud. “Property/casualty insurance fraud costs consumers $20 billion a year, which means $1,000 in goods and services per family,” Hurns said. “Through participation in NICTA and the creation of Special Investigative Units, we can more easily and quickly catch these criminals.”
*Safety initiatives: Support is growing for the use of red-light cameras, a cost-effective and safe method of law enforcement for traffic-signal scofflaws, Hurns said. Currently, 37 communities in 12 states use the devices. In California, red-light violations decreased by 42 percent once cameras were installed. “More states should take California’s lead to stop red-light runners, whose disregard for safety causes 500,000 injuries and 1,000 deaths each year,” Hurns said.
Hurns also discussed other shared industry interests such as lower blood alcohol content laws, occupant protection systems, initiatives for teen graduated drivers’ licenses, and “black box” auto crash data retrieval systems.
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