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Board addresses used parts and appraisal cost negotiation in new ruling, saying in regard to unfit used parts “the insurance company shall be responsible for the costs of restoring the parts to usable condition.”
The Massachusetts Auto Damage Appraiser Licensing Board (ADALB) voted by a majority vote at the Board’s meeting held on Sept. 29, 2015, to adopt an advisory ruling consistent with a regulation issued by the commissioner of the Division of Insurance titled, “Standards for the Repair of Damaged Motor Vehicles.”
This means that an appraisal conducted by a licensed appraiser in the state of Massachusetts needs to follow 212 CMR 2.04 (e), which states in part: “The appraiser shall determine which parts are to be used in the repair process in accordance with 211 CMR 133.00. The appraiser shall itemize the cost of all parts, labor, materials, and necessary procedures required to restore the vehicle to pre-accident condition and shall total such items.”
212 CMR 2.04 (e) also states: “The appraisers representing the insurance company and the registered repair shop selected by the insured to do the repair shall attempt to agree on the estimated cost for such repairs.” As such, all costs associated with the appraisal shall be negotiated.
The ADALB recognized the use of used parts but pointed out that their guidelines state that “the repair will not impair the operational safety of the motor vehicle.” The ADALB stated its concern that the use of used parts that contain wear items, in certain circumstances, may violate 211 CMR 133.04 (3) (c). The ADALB further noted that the insurance company will be responsible and liable for the use of used parts it mandates, citing 211 CMR 133.04 (2) that states: “If the repairer uses the source and specified part(s) indicated on the appraisal and these parts are later determined by both parties to be unfit for use in the repair, the insurance company shall be responsible for the costs of restoring the parts to usable condition.”
Further, the ADALB stated that 212 CMR 2.04 (e) mandates all itemized components and all such costs associated with the appraisal shall be negotiated. As such, the use of used parts needs to be negotiated by the appraisers. The ADALB strongly advised that used parts that would impact the operational safety of the motor vehicle should not be used and complete negotiations should occur as mandated.