In addition to the unfair claims settlement practices
specified in this regulation, the following acts or practices of the insurer
are hereby defined as unfair methods of competition and unfair or deceptive
acts or practices in the business of insurance, specifically applicable to the
settlement of motor vehicle claims:
(1) Failing to make a good faith effort to
communicate with the repair facility chosen by the claimant.
(2) Arbitrarily denying a claimant's estimate
for repairs.
(a) A denial of the claimant's
estimate for repairs to be completed at the chosen repair facility based solely
on the repair facility's hourly rate is considered arbitrary if the rate does
not result in a higher overall cost of repairs.
(b) If the insurer pays less than the amount
of the estimate from the claimant's chosen repair facility, the insurer must
fully disclose the reason or reasons it paid less than the claimant's estimate,
and must thoroughly document the circumstances in its claim file.
(3) Requiring the claimant to
travel unreasonably to:
(a) Obtain a repair
estimate;
(b) Have the loss vehicle
repaired at a specific repair facility; or
(c) Obtain a temporary rental or loaner
vehicle.
(4) Failing to
prepare or accept an estimate provided by the claimant that will restore the
loss vehicle to its condition prior to the loss.
(a) If the insurer prepares the estimate, it
must provide a copy of the estimate to the claimant.
(b) If a claimant provides the estimate and
the insurer, after evaluation of the claimant's estimate, determines it owes an
amount that differs from the estimate the claimant provided, the insurer must
fully disclose the reason or reasons for the difference to the claimant, and
must thoroughly document the circumstances in the claim file.
(c) If the claimant chooses to take the loss
vehicle to a repair facility where the overall cost to restore the loss vehicle
to its condition prior to the loss exceeds the insurer's estimate, the claimant
must be advised that he or she may be responsible for any additional amount
above the insurer's estimate.
(5) If requested by the claimant and if the
insurer prepares the estimate, failing to provide a list of repair facilities
within a reasonable distance of the claimant's principally garaged area that
will complete the vehicle repairs for the estimated cost of the insurer
prepared estimate.
(6) Failing to
consider any additional loss related damage the repair facility discovers
during the repairs to the loss vehicle.
(7) Failing to limit deductions for
betterment and depreciation to parts normally subject to repair and replacement
during the useful life of the loss vehicle. Deductions for betterment and
depreciation are limited to the lesser of:
(a) An increase in the actual cash value of
the loss vehicle caused by the replacement of the part; or
(b) An amount equal to the value of the
expired life of the part to be repaired or replaced when compared to the normal
useful life of that part.
(8) If provided for by the terms of the
applicable insurance policy, and if the insurer elects to exercise its right to
repair the loss vehicle at a specific repair facility, failing to prepare or
accept an estimate that will restore the loss vehicle to its condition prior to
the loss at no additional cost to the first party claimant other than as stated
in the applicable policy of insurance.
(9) If liability and damages are reasonably
clear, recommending that claimants make a claim under their own collision
coverage solely to avoid paying claims under the liability insurance
policy.
