New Jersey’s Unfair Claims Practices: Is Consumer Protection Still Working?
by Jerry McNee, AASP/NJ Collision Chairman
For nearly 50 years, I have watched the collision repair industry evolve.
Vehicles have become dramatically more sophisticated. We now repair advanced steels, aluminum, carbon fiber, electric vehicles, complex restraint systems, and ADAS technology that simply did not exist when I began.
The repair process has evolved.
OEM repair procedures have evolved.
The training has evolved.
Yet one thing appears to have remained unchanged – the ongoing struggle between what is necessary to perform a safe and proper repair, and what an insurance company is willing to pay.
That raises an important question.
Are New Jersey consumers truly receiving the protections that our laws and regulations were intended to provide?
Why Were These Regulations Created?
New Jersey adopted the Unfair Claims Settlement Practices regulations to establish minimum standards for how insurers investigate, evaluate, negotiate and settle claims. The stated purpose of these regulations is to promote the fair and equitable treatment of claimants and to define practices that, when committed as a general business practice, constitute unfair claims settlement practices.
N.J.S.A. 17:29B-4(9) and 17B:30-13.1 prohibit insurers from engaging in unfair claims settlement practices.
That sounds exactly like what every consumer would expect.
Fair treatment.
Good faith.
Transparency.
Reasonable negotiations.
But if you ask repair facilities across New Jersey if that is what they experience every day, I believe many would answer differently.
Whatever Happened to Negotiation?
Years ago, disagreements over repair costs often involved professional discussions between experienced appraisers and repair facilities.
Those conversations still occur with some insurance companies.
Unfortunately, they are becoming the exception rather than the rule.
Today, many repair facilities are handed an estimate and effectively told: “This is what we’re paying.” Take it. Or leave it.
No meaningful discussion.
No review of OEM repair procedures.
No consideration of manufacturer position statements.
No willingness to evaluate accepted estimating logic contained within the P-Pages.
Instead, many insurers rely on internal pricing models and predetermined allowances regardless of what is required to properly repair or return the vehicle to pre-loss condition.
When did negotiation become optional?
Two Words That Matter
I have learned that perhaps the two most powerful words in collision repair are: Necessary and reasonable.
Everything we do should begin there.
Is the operation necessary?
Is the charge reasonable?
Those questions should not be answered based upon a computer algorithm, or arbitrary internal guidelines.
They should be answered by examining:
• OEM repair procedures
• Vehicle design
• Required safety systems
• Material composition
• The specific damage to the individual vehicle
Those are the factors that determine what is necessary to restore a vehicle to its pre-loss condition.
Not simply what someone is willing to reimburse.
“We Determine the Cost of Repairs”
Many New Jersey automobile policies contain language stating, in various forms: “We determine the cost of repairs.”
That sentence deserves careful thought.
Insurance companies determine what they believe they will pay.
But they do not perform the repair.
They do not certify the repair.
They do not warrant the repair.
They do not sign the final invoice.
They do not assume liability if a structural repair fails years later.
That responsibility belongs entirely to the repair facility.
If corrosion protection is omitted…If required welds are not performed…If an ADAS calibration is skipped…If an OEM-required replacement becomes a repair…
The repairer – not the insurance company – is responsible.
So, who should ultimately determine what is necessary to safely repair the vehicle?
The company paying the bill?
Or the trained repair professional who accepts responsibility for the finished product?
Since when did insurance companies become repair engineers or repair professionals?
What Happened to Consumer Choice?
New Jersey law gives consumers important rights.
Can Section 64 fulfill its purpose of protecting New Jersey consumers if the procedures intended to implement those protections are unclear, incomplete or not available in practice?
If the answer is no, then perhaps it is time for regulators, legislators, insurers, repair professionals and consumer advocates to work together to ensure that the protections envisioned by Section 64 are not merely written into law, but are fully implemented and accessible to every New Jersey consumer.
That raises a fair and important question:
How can Section 64 provide consumer protection if the very procedures intended to implement it are unclear, incomplete or unavailable to the consumer – yet are still relied upon or cited by insurers to limit or deny the consumer’s rights?
If consumers are never properly informed of the process, never given the tools to exercise their rights, and are then told those rights no longer apply, has Section 64 become a consumer protection statute in practice or has it become a mechanism used against the very consumers it was intended to protect?
Many New Jersey policies also contain Right to Appraisal provisions that allow disputes over the amount of loss to be resolved outside of litigation. In addition, legislation has been introduced that would require all New Jersey automobile insurance policies to contain appraisal provisions, recognizing the importance of this process for consumers. See bit.ly/SB2157.
Yet ask yourself:
How many consumers know these rights exist?
How many are told they may have additional options?
How many repair professionals fully understand them?
If we don’t understand these rights ourselves, how can we educate the people we serve?
The Path of Least Resistance
Let’s be honest. Every repair facility has experienced it.
The pressure.
The delays.
The repeated supplements.
The endless phone calls.
The reduced payments.
Eventually, the temptation becomes obvious.
Delete the operation.
Reduce the labor.
Absorb the difference.
Finish the repair.
Move on.
It’s the path of least resistance.
But is it the right path?
More importantly – Is it the path that best serves our customer?
Or have we simply become conditioned to accept a system where challenging an insurer is viewed as more difficult than compromising the repair plan?
This Is Bigger Than Collision Repair
This discussion isn’t about body shops versus insurance companies.
It isn’t about labor rates.
It isn’t about one estimate.
It isn’t even about one claim.
It’s about something much larger.
Consumer protection.
Public safety.
Transparency.
Accountability.
Every vehicle we repair shares the road with our families.
Every shortcut affects someone we may never meet.
Every compromise made for financial reasons carries consequences that extend far beyond one insurance claim.
So What Can We Do?
Complaining changes very little. Education changes everything.Every repair professional should understand:
• New Jersey’s Unfair Claims Settlement Practices regulations.
• New Jersey’s automobile physical damage regulations.
• AICRA and Section 64.
• The Right to Appraisal.
• OEM repair procedures.
• Estimating system logic and the P-Pages.
• Their customer’s insurance policy—not just the estimate.
Knowledge creates confidence.
Confidence creates better conversations.
Better conversations create informed consumers.
And informed consumers make better decisions.
A Challenge to Every Repair Professional
I’d like to leave you with a few questions.
Can you explain New Jersey’s Unfair Claims Settlement Practices regulations to your customer?
Can you explain Section 64?
Can you explain the Right to Appraisal?
Can you explain why an OEM procedure is necessary?
Can you explain why “necessary and reasonable” should drive every repair decision?
If the answer is no…
Perhaps that’s where we begin.
Because if we expect consumers to stand up for their rights, we first have to help them understand those rights.
After 49 years in this profession, one thing has become abundantly clear.
This industry has never been just about repairing automobiles.
It has always been about protecting the people who drive them.
As repair professionals, we are often the last line of defense between a safe repair and a cost-driven decision.
That responsibility should never be taken lightly.
And neither should the consumer protections that New Jersey intended to provide.
Want more? Check out the August 2026 issue of New Jersey Automotive!