Rutgers Law Professor Addresses AASP/NJ Members on Insurance Claim Settlement Issues

11.2.20 – The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) hosted its annual virtual membership meeting via Zoom on October 29. The evening presentation featured guest speaker Jay Feinman, Rutgers Law professor and author of Delay, Deny, Defend: Why Insurance Companies Don’t Pay Claims and What You Can Do About It.

Feinman’s discussion addressed the ongoing claim settlement issues auto body shops experience with various insurance companies.

“Things seem to be getting worse, and the reason I think is because of what is known as ‘delay, deny, defend,’ the title of my book. Insurance companies increasingly delay payment of claims, deny valid claims in whole or part, force policyholders to litigation to get what they are entitled to and then aggressively defend that litigation.”

To illustrate how the trend began, he provided background into how insurance companies were advised by management consultants back in the 1990s to increase profit by reducing payments on smaller claims.

“This is why you have the problems you have with $2,000, $5,000 and $10,000 claims. It is much more effective for them to save money there because there are just so many [of them].”

Although the New Jersey Department of Banking and Insurance (NJDOBI) is in place to promulgate state regulations governing auto physical damage claims and unfair claim settlement practices, the complaint process thus far has been largely ineffective.

Feinman believes there are a number of things repairers can do to fight the battle. One method involves having customers file complaints with the NJDOBI in greater numbers. He encouraged repairers to see to it that complaints are filed in order to force the NJDOBI to investigate these actions and perform market conduct examinations. These forms of communication will also go on to create better information for consumers.

“If your customer has a significant problem [with an insurer], I encourage you to have them file a complaint form. These complaints get compiled; annually, the Department publishes a ranking starting with the worst insurance company.”

Currently, the most crucial component in the fight to improve insurance claim practices is to get behind AASP/NJ’s support of the New Jersey Insurance Fair Conduct Act (A1659), which would create a private cause of action for first-party claimants regarding certain unfair or unreasonable practices by their insurer. Additionally, successful claimants would be entitled to (among other things) reimbursement for their loss and court and attorney’s fees.

“When this legislation comes up [in session], we need everyone to make calls, write letters and support it,” stressed AASP/NJ Executive Director Charles Bryant. “This industry needs to do something, and we can’t do it by whining and carrying on. We have to take action, and I’d greatly appreciate it if everyone got involved.”

In addition to the keynote presentation, AASP/NJ provided meeting attendees with an update on the association’s 2020 activities and re-elected the following members to the Board of Directors for the 2021-2023 three-year term: Ted Rainer (Ocean Bay Auto Body; Point Pleasant), Anthony Trama (Bloomfield Auto Body; Bloomfield), Joe Amato, Sr. (Amato Insurance Agency, A Division of World Insurance Associates LLC; Neptune) and Gary Gardella, Jr. (County Line Auto Body; Howell). Additionally, new Board member Brad Crawford (Livingston Collision; Livingston) was elected to serve his first three-year term.