“Section 2695.8 (F) of the California Fair Claim Settlement Practices Regulations has important things to say regarding how an insurer deals with an estimate prepared by the auto body shop of the claimant’s choice when the insurers estimate would not allow for the repairs to be completed in a good and workmanlike manner. This section of the Fair Claim Settlement Practices Regulation is a few perfect examples of how insurance adjuster might attempt to not settling your claim fairly and correctly.
This section of the regulation begins this way:
“If the claimant subsequently contends, based on a written estimate that he or she obtains, that necessary repairs will exceed the written estimate prepared by or for the insurer, the insurer shall”:
(1) Pay the difference between the written estimate and a higher estimate obtained by the claimant: or,
(2) If requested by the claimant, promptly provide the claimant with the name of at least one repair shop that will make the repairs for the amount of the insurer’s written estimate. The balance of this paragraph deals with the warranty the insurer must provide.
Section number three (3) specifically states how the insurer must adjust the estimate prepared by the shop of the claimant’s choice.
(3) “Reasonably adjust any written estimates prepared by the shop of the claimant’s choice and provide a copy of the adjusted estimate to the claimant and the claimant’s repair shop. The adjusted estimate provided to the claimant and the repair shop shall be an edited copy of the claimant’s repair shop estimate or a supplemental estimate based on the itemized copy of the claimant’s repair shop estimate. The adjusted estimate shall identify the specific adjustment made to each item and the cost associated with each adjustment made to the claimant’s shop estimate.”
(4) This is an important paragraph so it deserves some analysis:
* “Reasonably adjust any written estimates prepared by the shop of the
Claimant’s choice.” At this Point, the insurers estimate is no longer to be used. The regulation clearly states that the Insurer must adjust the shop estimate and “provide a copy of the adjusted estimate to the claimant and the claimant’s repair shop. The adjusted estimate provided to the claimant and the repair shop shall be an edited copy of the claimant’s repair shop estimate or,”
* “A supplemental estimate based on the itemized copy of the itemized copy of the claimants repair shop estimate.” Technically, we read this to mean that the insurer can key the shop estimate into the Insurer’s data base to produce a working document to be used reach a settlement amount. However, it also means that the insurer must start with the same methods the shop uses, for example, if a shop uses a paint calculator, the insurer cannot change the shop’s paint calculation method for another method the insurer prefers to use.
* “The adjusted estimate shall identify the specific adjustment to each item and the cost associated with each adjustment made to the claimant’s shop estimate”. This means no more hidden “we don’t pay for that” items. Also, when you run into the “we don’t pay for that” item, you may want to remind the insurer of the need for them to fulfill their obligations required in section 2695.7 B-1 of the California Fair Claim Practices regulations that they must put that denial in writing and state the basis for the rejection or Denial and state the specific statute, applicable law or policy provision, condition or exclusion and explain the application of the statute, applicable law or provision, condition or exclusion to the claim. In the case of a third party claim, any denials of a claim in whole or in part must do so in writing.
* As a reminder if they still refuse to meet their obligations you should not wait a minute longer by filing a complaint with the Department of Insurance pointing out the insurer violated in this regulation and a demand letter to everyone in this email with a deadline of 24 hours or less.”
We advise all customers to seek legal counsel when dealing with automotive claims due to insurance practices. The Dent Devils Inc and its staff do not give legal advice, but suggestions based on our own experience, research and talking to the California Department of Insurance and California Bureau of Automotive Repair and attorneys over the last 36 years in the business.