Ask the Expert: Who Pays for Parts That Don't Fit?

Who Pays for Parts That Don’t Fit?

Is there a form we can create that will make the insurance company pay for both parts if the aftermarket will not fit correctly and we have to buy OEM?

An insurance company decided to replace a part with aftermarket and it did not fit after painting. We requested OEM in the first place; now we have to buy an OEM part and try to recover our losses from the aftermarket part (and paint/labor for both parts). Is there a form we can create that will make the insurance company pay for both parts if the aftermarket will not fit correctly and we have to buy OEM? In the future, we want to avoid having to pay for aftermarket and OEM if the aftermarket does not fit properly.

This is a very good question and one that many other repairers who are confronted with similar situations should be asking.

First of all, let’s address a few misconceptions that many repairers share. It’s important to remember who it is you work for. Generally, the vehicle owner and/or the one(s) who sign the authorization to repair and/or the repair contract are the “customer” as defined by many states. Even those repairers who participant in DRPs should follow state laws and guidelines as to understanding just who the customer is defined as. When you state, “An insurance company decides to replace a part with aftermarket…,” it’s again important to remember who it is you work for.

While the insurer may elect to offer a settlement based on their opinion as to what’s needed, you as the repair professional are in a position to make recommendations to your customer regarding what’s necessary for a quality repair that you can stand behind with your company’s warranty.

So, when an insurer (or at-fault driver) offers a settlement to your customer that cannot and will not restore them and their vehicle to “pre-loss condition” in fit, finish, function and/or value, then it falls on you, as the repair professional/expert, to inform your customer of such and for you to seek direction from them as to how they wish to have their vehicle repaired. Only through your efforts will your customer learn of the issue(s) and recommended resolution(s). Your state laws may mandate this!

As an example, in Florida, under state statute 559.920 Unlawful Acts and Practices, it states in part: “It shall be a violation of this act for any motor vehicle repair shop or employee thereof to: (16) Rebuild or restore a rebuilt vehicle without the knowledge of the owner in such a manner that it does not conform to the original vehicle manufacturer’s established repair procedures or specifications.” This, of course, would include the types of parts being used in the repair. Repairers should be aware of the laws and regulations in their state that govern them as well as insurers.

To answer your question, because you don’t work for the insurer and the insurer doesn’t have an obligation to your company, you cannot “make” the insurer do anything. You can, however, present your customer with a formal document that states that while you don’t endorse or recommend the use of “alternative parts,” you will attempt to use them with their direction but only under certain conditions. Those conditions should be carefully spelled out in a manner that forewarns the customer as to the potential costs and liabilities involved should the insurer-mandated parts be found defective and require modification, repair or replacement, and put them on notice that additional charges may apply – charges that would compensate the repairer for their additional efforts and activities such as labor, refinishing and materials. Furthermore, these documents may protect the repairer from potential liabilities while helping to avoid trying to chase down recovery from the parts supplier.

Your customer should then provide that information to the insurer and/or at-fault driver to forewarn them and instill accountability to encourage the insurer to reconsider their position, or be liable for the potential outcome.

There are no industry standard forms available for such issues that I am aware of. Auto Damage Experts (ADE) offers its repairer consulting/coaching clients such documents, however, without proper consulting/counseling, these forms could possibly cause the average repairer/customer more harm than good if not used properly. These forms should also be supported by well-crafted repair agreements and recommended procedures, which ADE also makes available to their clients. Used properly and consistently, having such processes and documentation will help you eliminate such issues in the future.

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