TO: All Companies Writing Personal Automobile Insurance
FROM: Linda Ruthardt, Commissioner of Insurance
DATE: April 15, 1994
RE: 211 CMR 123.06

The following bulletin (94-03) contains guidance for insurers as they produce written information necessary to comply with the requirements of the above referenced regulation, especially as it relates to the provision of a list of referral and registered auto body shops.

It also contains suggested language to accompany such list(s) which should assist the insured in deciding which of several possible actions the insured may take.

  1. The "list" shall contain both referral and registered shops. As long as the list provided initially when responding to the claim contains both the referral and registered shops located in the county in which the vehicle is garaged and a notice that similar lists for other counties in Massachusetts are available upon request, the division will find that the requirement of 123.06 (2) (a) to provide "a single list" are being met.
  2. The "insurers list" as referred to in the regulation is intended to mean the list of the referral shops indicated on the list required to be provided by the preceding point(l) of this bulletin.
  3. Attachment A contains suggested language to accompany the list being mailed to the insured who has made claim which seeks to explain the insureds options as regards having or not having repairs made and the difference between using a referral shop versus a registered shop.
  4. Attachment B contains sample language and format for a list of referral and registered shops..

Carriers who wish to use alternative language should assure that it communicates the same information and is written so as to understandable by an insured having an 8th grade reading level.
Attachments-2


ATTACHMENT A AUTO DAMAGED? HERE ARE YOUR OPTIONS!

Enclosed is our appraisal for the cost of repairing your auto and a list of every registered auto body repair shop in your county. We have either enclosed our payment check or we will send it within 5 business days.

If you intend to repair your damaged auto, you may select one of the following options:

  1. You may choose a referral shop from the enclosed list. If you do, we will guarantee the materials and workmanship of the repair and the cost to you will usually not exceed our payment plus the amount of your deductible. you are responsible for any costs resulting from the use of parts that are of better quality than the parts that were on your auto at the time of the accident. (Referred to as a betterment or depreciation on the appraisal.)
    OR
  2. You may choose any other registered auto repair shop from the enclosed list. We do not guarantee the quality of repairs at other shops, but a registered shop has posted a bond for the protection of its Judgment creditors and may provide you with its own warranty. If the shop charges you more than our payment plus the amount of your deductible for the repairs, we will negotiate with that registered repair shop, but we cannot promise that we will pay the difference. You are responsible for any costs resulting from the use of parts that are of better quality than the parts that were on your auto at the time of the accident. (Referred to as a betterment or depreciation on the appraisal.)
    OR
  3. You may choose not to participate in our Direct Payment/Referral Plan by returning the check to us and then have your auto repaired in accordance with the Completed Work Claim Form procedure. Please see your auto policy for details.
If you do not intend to repair your damaged auto:

  • You may choose to cash our check and not repair your auto. In this case, we will reduce the actual cash value of your auto by the amount of our check plus the amount of your deductible. If you later give as proof of proper repair, the actual cash value will be increased. We have a right to inspect all repairs.
If you or your chosen repair shop dispute the accuracy of the appraisal or our payment to you, the following applies to you, referral shops and other registered repair shops:
  • You or the repair shop must notify us by telephone or in writing if the cost of repair is expected to exceed our payment plus the amount of your deductible. The notice must be received by us prior to the completion of repairs; otherwise, the additional cost may not be paid. We will evaluate the request and either authorize or deny any supplemental payment. You must allow us to inspect your auto.

    Sometimes there may be a disagreement as to the amount of money we owe for losses or damage to your auto. If so, Massachusetts General Laws, Section 191A of Chapter 175, provides for a method of settling the disagreement. Either you or we can, within 60 days after you file your proof of loss, demand in writing that appraisers be selected The appraisers then follow a procedure set law to establish the amount of damage. Their decision will be binding on you and us. You and we must share the cost of the appraisal.


Attachment - B

Name of Insurance Company

Massachusetts
Direct Payment /Referral Shop Program
Registered Auto Repair Shops for
Barnstable, Dukes, Nantucket, and Plymouth Counties

********NOTICE********


This list contains the name of every registered auto body repair shop in your county. Massachusetts law requires that all repair shops be registered. An insurance company cannot pay for any repair work done by an illegal unregistered shop.

We have underlined "Referral Shops" on the list. A Referral Shop has an agreement with us to perform the repair work listed on our appraisal for the amount we pay you plus that part of the damage for which you are responsible (your deductible). We will guarantee the quality of repairs done by a Referral Shop. You are not required to use a Referral Shop. You may go to any repair shop on this list. We will negotiate with that registered repair shop, but we cannot promise that we will pay the difference between our check plus your deductible and the amount the shop charges to repair your auto. We do not guarantee the quality of repairs at other shops, but a registered shop has posted a bond for the protection of its judgment creditors and may provide you with its own warranty.

We will give you the list of registered repair shops in other counties at your request.

List as of _______________, 1994







THE COMMONWEALTH OF MASSACHUSETTS EXECUTIVE OFFICE OF CONSUMER AFFAIRS
DIVISION OF INSURANCE
470 ATLANTIC AVENUE BOSTON. MA 02210-2223 (617) 521-7794 TTY/TDD (617) 521-7490

April 15, 1994

Michael B. Meyer, Esq.
Meyer, Connolly, Sioman & MacDonald
12 Post Office Square
Boston, MA 02109

Re: Implementation of 211 CMR 123.00.

Dear Mr. Meyer:

Upon further review of the file in the matter of implementing the duly promulgated revisions to 211 CMR 123.00, Direct Payment of Motor Vehicle Collision and Comprehensive Coverage Claims and Referral Repair Shop Programs, it is my determination that the current stay may be and is hereby lifted effective Friday, April 15, 1994, to be implemented for all claims received on or after May 1, 1994. The outstanding issues that have been the subject of repeated negotiations between the Division of Insurance, the Automobile Insurers Bureau (AIB) and the Massachusetts Auto Body Association (MABA) appear to involve interpretation of the regulation's provisions, with particular reference to what list an insurer is required to provide to insured claimants.

It is my intent to clarify the regulation in this area by an interpretive bulletin, a copy of which is appended hereto. In essence, the interpretive bulletin will indicate that providing the insured with a list of referral and registered shops in the county in which the vehicle is garaged and a notice that such a list for any additional counties will be provided upon request will meet the requirements of the regulation. Additionally, insurers may indicate referral shops by asterisk, underlining, boldface type and/or any other similar way. Samples of recommended acceptable consumer information which reflects the negotiations of the AIB and MABA will be included for guidance.

I would like to thank you and the Automobile Insurers Bureau for your anticipated cooperation in implementing the regulation pursuant to the attached interpretive bulletin.

Sincerely,

Linda Ruthardt
Commissioner of Insurance

cc: Hon. Priscilla Douglas
George B. Dean, Esq.
James Castleman, Esq.