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Massachusetts Insurance Commissioner and ADALB Requested to Direct Attention to COVID-19 Exploitations

Printed in Autobody News

As shops focus on providing a safe environment for both customers and employees during the COVID-19 outbreak, AASP/MA has received notice of a variety of collision repair industry related concerns. As a result, AASP/MA Executive Director Lucky Papageorg requested “immediate steps to stop exploitative practices being employed by insurance providers” in a letter to Massachusetts Commissioner of Insurance Gary Anderson, which was copied to Governor Charlie Baker, Lt. Governor Karyn Polito and Attorney General Maura Healey.

“As the ‘first responders’ meeting the needs of the motoring public, the collision repair industry and the customers we serve are subjected to the potentially life-threatening exposure of the pandemic virus,” Papageorg wrote. “New procedures and protocols are now required to protect both the customer and our entire workforce. This requires that insurers must acknowledge and pay for the procedures and the associated costs that will help protect the vehicle owners and the dedicated professionals who repair collision-damaged vehicles.”

AASP/MA requested the Insurance Commissioner Anderson issue “a directive to the insurance industry to ensure the health and safety of vehicle owners requiring collision repair services and collision repair technicians during the COVID-19 pandemic,” identifying four items that require immediate attention:

  • A proper time allowance for the application of disinfecting materials;
  • Proper reimbursement for additional PPE items required, including covering of vehicle interiors and high contact components, such as steering wheel shifters and door handles;
  • Proper reimbursement for additional administrative costs, such as pick-up and drop-off services, preparing documentation and uploading required documentation to the insurer; and
  • The inclusion of “hazard pay,” similar to what other industries have implemented.

Papageorg concluded his letter to the Insurance Commissioner by noting, “The insurance industry has been saving millions during this current state of emergency.  Some insurers have provided minimal discounts of premiums (the average is about 15%) due to a dramatic reduction in driving that has reduced claims by as much as 70%. They do so while exploiting those of us in the ‘essential’ business of collision repair. The actions of the insurance industry are unfair to consumers and repairers alike and It only magnifies the insurers commitment to subordinating “consumer safety” to ‘corporate profit’.”

AASP/MA also addressed a letter to Attorney General Healy, copying the previously mentioned group, to commend her handling of the current situation regarding insurers’ exploitative practices. Reiterating the added expenses of disinfecting and PPE materials, Papageorg pointed out the protocols required by the CDC and OEMs for proper disinfection, explaining, “Many insurers have taken the cavalier position that the procedures are not necessary, and tell shop owners, ‘just charge the vehicle owner.’  They do this while at the same time refusing to send their own staff and independent appraisers to personally view the vehicle.”

Since insurers have also refused to send appraisers to repair facilities to protect them against the spread of COVID-19, shops have also been forced to take on the additional administrative costs of preparing estimates, documenting the damage, uploading the information and more. “Because photos and videos are poor substitutes for personal inspection of the damages, many insurers indicate, ‘I just don’t see it.’ This only adds to the frustration and creates additional administrative cost directly associated with the specific claim, which again the insurers refuse to reimburse, exploiting the current conditions further.  This puts the collision repairer further into a tenuous position,” Papageorg pointed out.

The letter stressed the enormous changes that shops have made in standard operating procedures in an effort to curb the spread of the coronavirus while still servicing consumers’ vehicles. “Our industry has selflessly donated not only time and energy to help those stricken or confined to their homes, but also donated hundreds of thousands of dollars in PPE equipment to protect first responders, the true heroes in this fight,” Papageorg added.

The ADALB also received a letter from AASP/MA, requesting an additional emergency meeting to “discuss an advisory ruling to clarify and put an end to the practice of insurers who are refusing to pay for the procedure of pre and post application of disinfecting material and associated PPE equipment to vehicles in need of collision repair for the protection of the vehicle owner and collision repair facility. AASP-MA also requests the ADALB to address the practice of insurers refusing to pay for the additional repair cost imposed upon the repair facility, when the insurer insists on the use of the ‘expedited supplement’ procedure or the writing and photo documentation of the original estimate.”

Stressing the potential impacts of the expressed concerns with insurers’ exploitative practices during the COVID-19 lockdown, Papageorg warned, “The survival of vehicle owners, collision shops and their technicians are at risk.”