Where is That Appraisal?
by James A. Castleman, Esq.
The insurance appraiser was at your shop two weeks ago, yet you still don’t have his supplement in hand.
Maybe the car is sitting on a frame machine, or maybe it is sitting in pieces on the shop floor taking up needed space, or maybe it is just sitting outside in your lot. In any of these situations, your customer is calling every day, wondering what is going on and why they don’t have their repaired vehicle back. How did it get to this, and what can you do about it?
The Law
Statutes and regulations governing auto damage appraisers set strict time limits on how long an insurance appraiser has to deliver an appraisal to a repair shop and how long an insurance appraiser has to inspect a vehicle when a repair shop requests a supplement.
The statute that established the Auto Damage Appraiser Licensing Board (“ADALB”) says, with regard to ALL appraisals, whether original or supplemental: “The appraiser shall leave a legible copy of his appraisal with the repair shop selected to make the repairs at the time he inspects the vehicle, which appraisal shall contain the name of the insurance company ordering it, if any, the insurance file or claim number, the number of the appraiser’s license and the proper identification number of the vehicle being inspected. All unrelated or old damage should be clearly indicated on the appraisal.” [Emphasis added.]
That statute also indicates: “Every appraiser shall reinspect damaged motor vehicles when supplementary allowances are requested by repair shops within two days of a request.”
So, under the statute, if a shop requests a supplement, then the insurance appraiser has only two days to reinspect the vehicle and is required to leave an appraisal with the repair shop at the time of that inspection.
Admittedly, there is some leeway allowed by the regulations that the ADALB adopted when interpreting the statute. But that leeway is less than insurers would have you believe and should not really alter the statutory time frames in the vast majority of cases.
The ADALB regulation initially adds an additional time restriction, requiring an insurer to assign an appraiser to appraise damage to a motor vehicle within two business days of receipt of a claim. This is for ALL claims, whether made orally or in writing, whether made directly to the insurer or to their agent, whether the insurer ends up covering the claim or not, and whether the insurer assigns a staff appraiser or an independent appraiser. The only exception is for claims of less than $1,500 – but only because the insurer can choose to voluntarily cover these claims without its appraiser preparing an appraisal at all. If the claim is under $1,500 and the insurer wants to have an appraisal prepared, it still must assign the appraiser within two days of receipt of the claim.
Critically, the regulation provides: “The appraiser shall mail, fax or electronically transmit the completed appraisal within five business days of the assignment, or at the discretion of the repair shop, shall leave a signed copy of field notes, with the completed appraisal to be mailed or faxed within five business days of the assignment. The repair shop may also require a completed appraisal at the time the vehicle is viewed.”
If the shop does require a completed appraisal at the time of inspection by the insurance appraiser, the shop “shall make available desk space, phone facilities, calculator and necessary manuals.” This antiquated requirement still exists, even though almost all appraisals are computerized today and can usually be prepared on the appraiser’s laptop while he or she is standing in front of the damaged car and inspecting it or sitting in their own car in the shop’s parking lot. But, even if the shop does not require that the appraisal be written on the spot, the appraisal STILL must be transmitted to the shop within five days of the claim being assigned to the appraiser, and, if the shop requests it, the appraiser MUST leave a copy of their field notes with the shop at the time of inspection.
With regard to requests for supplementary appraisals, “[t]he insurer shall assign an appraiser who shall personally inspect the damaged vehicle within three business days of the receipt of such request. The appraiser shall have the option to leave a completed copy of the supplemental appraisal at the registered repair shop authorized by the insured or leave a signed copy of his or her field notes with the completed supplement to be mailed, faxed, electronically transmitted or hand delivered to the registered repair shop within one business day.”
The regulation does make an exception to this rule for supplements, providing: “A reasonable extension of time is permissible when intervening circumstances such as the need for preliminary repairs, severe illness, failure of the parties other than the insurer to communicate or cooperate, or extreme weather conditions make timely inspections of the vehicle and completion of the supplemental appraisal impossible.”
Note, however, that the exception applies only if the circumstances make it IMPOSSIBLE to be able to leave the completed appraisal or field notes at the time of inspection or make it IMPOSSIBLE to transmit the completed appraisal by the next business day. The general rule is still that the appraisal must be left at the shop at the time of inspection, or the field notes must be left at that time with the actual supplement to be transmitted within one business day.
There are elements of the separate Insurance Direct Payment regulations that may seem to give an insurer up to three business days after inspection to decide whether to pay a supplement request. Be aware that no matter what an insurer tries to tell you, nothing in the Direct Payment regulations negates the absolute obligation of the insurance appraiser to meet the timing requirements of the appraisal statute and the ADALB regulations.
How do you make insurance appraisers comply with the law?
The time limits for inspection of damage and for preparation and delivery of appraisals protect your customers by trying to ensure that insurers do not cause delays in how long a claimant’s vehicle is out of commission. They also protect repair shops by trying to ensure that shop space and frame machines are not tied up for unnecessarily long periods of time. And they protect insurers by helping to limit cycle time and trying to ensure that insurers are not paying substitute transportation expenses for excessive amounts of time.
So, what can you do to try to get insurance appraisers to comply with the law? There is no perfect answer, and what you do may depend on the particular situation that you are faced with, the particular insurer or appraiser that you are dealing with or how aggressive you want to be, but following are some suggestions:
Start by making it clear to all insurers and to all appraisers that you expect them to comply with the requirements of the ADALB statute and regulations. Conspicuously post a sign in your shop explaining your policy. Let individual appraisers know what your policy is when they come to your shop or when you send them an email. Perhaps prepare a one page written statement of what your policy is, hand it out to individual appraisers and send it to the claims department of all Massachusetts auto insurers. In the document, spell out what the ADALB statute and regulations require for time limits, and make it clear that you expect insurers and appraisers to comply with those time limits. Consider having a sign-in book for all appraisers, with a written copy of your policy next to it, and a check box next to each appraiser’s signature where they acknowledge receipt of a copy of your policy. Do whatever you think is appropriate to get the word out.
After giving notice (or even without giving prior notice), start enforcing your policy. When an appraiser comes to your shop, insist that they write their appraisal on the spot if that is what you want, or insist that they leave a complete and legible signed copy of their field notes with their appraisal to follow within one business day. If you know when a claim was called in by your customer (or maybe by you), keep track of when two days are up; then call the insurer and ask what appraiser has been assigned the claim. If five days have passed since the assignment and you do not have an appraisal in-hand, start calling the insurer and the appraiser, insisting that you get the appraisal immediately.
Consider charging storage for periods of time that vehicles are sitting at your shop while waiting for an appraisal or supplement beyond the required time limits. If you are going to do this, you will need to include this as part of your storage policy. The Massachusetts Attorney General’s consumer protection auto repair regulations require that your customers must be notified of your storage policies, and you can do this by either conspicuously posting your storage policy in your shop or having it printed on your repair order, which should then be signed by your customer; however, again, you also should give specific notice to all appraisers and insurers. If you have your storage policy posted, point it out to appraisers when they enter your shop. Include it in the notice that you distribute about expecting insurers and appraisers to meet the time limits.
Also, make sure that your customers are aware of what your policy is, and let your customers know that you may be looking to them directly if their insurer won’t pay for storage. Give them a copy of the notice that you are giving to appraisers and insurers, tell them what you are doing, post it in your shop, and put it in your repair order. Then, when an appraiser leaves you sitting without an appraisal for a week, call your customer and insist that they contact their insurer directly, confirming that they are getting charged for storage and that they expect the insurer to pay for it.
Consider different levels of storage charges, depending on whether a vehicle is sitting on a frame machine, taking up floor space or sitting in your outside storage lot. Insist that insurers pay the extra storage as part of your legitimate charges. If the insurer refuses to pay, keep going up the chain of command to try to collect compensation. Then consider having your customer assign their rights against their insurer to you, and then sue the insurer in small claims court. If you do decide to take matters to court, it is suggested that you start with truly egregious violations of the statute and regulations.
Side note: I do have reports of at least a couple of shops being able to collect extra storage from some insurers when they have not complied with the appraisal time limits.
Consider filing a complaint with the ADALB against an offending appraiser. If a licensed appraiser does not follow the time limits set by the governing statute and regulations, then they are not following the requirements of their license, and the ADALB can suspend or revoke their license for the violation. I understand that the ADALB has been less than active in taking actions against offending appraisers, but in the right case, they might. If you are going to file a complaint, it would be best to do so against an appraiser who has violated the timing requirements multiple times and who has missed deadlines by long periods of time.
In ALL cases, carefully document everything! Document when and to whom you have handed out or sent notices of your policy (whether just for seeking enforcement of the law, for charging storage or for whatever your particular policy is). Document when you make a request for a supplement and how you communicate that request, whether by phone or by email, including the date and time of the communication and to whom it is addressed. Document the date and time that an appraiser comes to your shop. Document that you have directly given your notice to that appraiser. Maybe make a notation on your own appraisal that you prepare for purposes of negotiation, as to whom you were dealing with, when you were dealing with them and what you communicated to them. Perhaps ask the appraiser to sign a copy of your appraisal, with your note on it, acknowledging receipt of the document. Put your policy and any follow-up requests for compliance on all of your emails to insurers and appraisers, and keep copies of those emails in your files. Also document whatever responses you get back, whether acknowledging receipt of your communication, promising to come inspect a vehicle – or even improperly replying to your communication by refusing to inspect a vehicle or refusing to deliver an appraisal in a timely manner, or telling you where to stick your “damn request.”
If you are going to start charging for storage, sue an insurer or file a complaint with the ADALB, you need to collect as much complete, accurate documentation as possible if you want to have a chance of success.
Conclusion
So, where is that supplement, and when are you ever going to get it? If you want to find out, make sure that you accurately know what the law requires as to the timing of damage inspection by insurers and the writing and delivery of appraisals by licensed appraisers. Then decide what the policy is going to be for your shop to enforce those time limits and what you are going to do when they are not met. If you truly and rigorously follow that policy and its implementation, you just may find that you do know where that supplement is and when you are going to get it.
Want more? Check out the February issue of New England Automotive Report!