Deception in the MA auto insurance industry

Wreck Check of Boston is alerting the public to safety issues involving the use of aftermarket crash parts in the repair of collision damaged vehicles.

Recent tests on the quality and safety of aftermarket / generic crash parts support and confirm the conclusion that these parts continue to pose serious safety concerns and risks to the consumers of Massachusetts and across the nation.

Wreck Check of Boston is calling on the administration of Governor Deval Patrick, including the Attorney General, the Division of Insurance, and the Auto Damage Appraisers Licensing Board (ADALB) to take corrective action immediately.

The Society of Collision Repair Specialists has made the presentations available on their website at www.scrs.com The parts reviewed included items such as front and rear bumper reinforcements, radiator core supports, bumper brackets and energy absorbers. “They affect the deployment of airbags, ladies and gentlemen. We’re putting people’s lives at stake. This is not right.” said Toby Chess who conducted the testing.

As a direct result of those tests, the Auto Body Parts Association (ABPA), who represents more than 150 manufacturers, distributors and suppliers of aftermarket crash parts, issued a statement this week suggesting “discontinuation of the production and sale of these part types.” ABPA has called for a halt in production of any unproven parts.

Following that announcement, the Taiwan Auto Body Parts Association (TABPA) also advised its members to stop the sale and distribution of untested aftermarket structural crash parts. TABPA is the second parts association this week to recommend stopping the distribution, sale and manufacturing of untested parts for safety reasons.

It has been reported that at least one insurer, GEICO has stopped specifying aftermarket parts on their repair cost estimates as a direct result of the parts testing. Wreck Check of Boston supports such a bold move and other insurers should follow suit.

While we applauded the actions of both associations and GEICO, their actions are too little, too late. More needs to be done.

Safety concerns surrounding inferior generic crash parts have been know at the highest levels of state government for decades. During the 1990’s repairers filed hundreds of complaints with the Auto Damage Appraisers Licensing Board (ADALB) on the safety of aftermarket generic crash parts. Finally, in March of 2000, due to overwhelming pressure, the ADALB held hearings at the request of the Commissioner of Insurance Linda Ruthardt regarding the safety of after market parts. That report, which has been hidden from public view, concluded:

• The main purpose and focus of the Board's hearing regarding the safety of after market parts is to protect the consumers of Massachusetts.
• The safest choice may in fact cost the consumer more money.
• The Board however, is compelled by the evidence presented to reach certain conclusions about certain after market parts.
• Structural after-market parts are not of like/kind/quality to OEM parts and therefore, the use of after-market parts may compromise the over-all safety of the vehicle if it is in a subsequent auto accident.
• After-market cosmetic crash parts appear to suffer from the same manufacturing defects as aftermarket structural parts. Their overall weight, rigidity, and quality of metal and plastics differ from their OEM counterparts.
• After-market cosmetic parts are not the exact duplicate of the factory original parts and may jeopardize the safety and value of the vehicle.
• A disturbing aspect to the use of any after-market part by…is the complete lack of a product safety testing or a product safety recall program
• The Board is convinced that the metal and plastics used in the manufacturer of after market parts is not always of the same strength and durability as the metal and plastics used by the original manufacturer.
• The use of the materials that is weaker than or stronger than the original can affect safety.
• The board on a 4-0 vote voted to specify in this report that "there is no recall system for aftermarket parts in existence". The Board recommends that records be maintained by the Distributors recording the purchaser's name and address, and that a toll-free 800 number be established so that purchaser's can call and verify if a recall of a particular part has been implemented.

Just a few weeks after that report was made public, on December 8, 2000, the Massachusetts Division of Insurance issued Bulletin 2000-15 That bulletin allowed insurance companies to offer, for additional money an original equipment (OE) parts policy endorsement, in spite of the ADALB report.

The bulletin states in part: "all insurers licensed to sell private automobile insurance shall have the option of selling an optional endorsement that provides for the use of new parts manufactured by or under licensure of the original equipment manufacturer…when such new parts are not otherwise required."

It is the duty of the ADALB to promote the public welfare and safety under regulations governing the appraisal and repair of motor vehicles. They have failed to enforce those regulations. The ADALB report concluded that aftermarket parts pose a safety risk. Within weeks of the release of the report, the Division of Insurance allowed Massachusetts insurance companies to charge consumers more money for original equipment (OE) parts, or, in the alternative, continue the state mandated use of inferior, defective and unsafe parts. This action by the Division of Insurance is a travesty and is another link in the chain of fraud in the MA auto insurance industry. The safety of consumers should not be an option.

Wreck Check of Boston is calling on Governor Deval Patrick and his administration to take swift action to protect consumers of Massachusetts from the past, current and future use of untested and unsafe parts, and, without delay:

• Issue an immediate recall on all vehicles repaired with aftermarket parts to protect consumers from faulty repairs due to unsafe parts, as recommended by the Auto Damage Appraisers Licensing Board in the March 2000 report.
• Insist that insurers be held accountable for failure to protect consumers from defective parts specified by the insurance industry, under the disguise of cost containment.
• Demand insurers pay consumers to re-repair their vehicle, at no cost to the consumer, or, in the alternative, pay for the loss in re-sale value of the vehicle due to insurer specified aftermarket replacement parts.
• Issue refunds to consumers who paid an additional premium for the use of original equipment parts in the repair of their vehicle.
• Reimburse consumers for any out of pocket expense incurred in choosing original equipment parts over aftermarket parts in the repair of their vehicle.
• Rescind the optional OE parts policy endorsement.
• Educate consumers about the risks inherent with generic crash replacement parts.
• Revise or rescind Massachusetts regulations mandating the use of aftermarket parts on all vehicles with over 20,000 miles.
• Consumers are encouraged to review any repair estimates, past or present, to determine if aftermarket, generic or quality replacement parts were specified for the repair of your vehicle.

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About Wreck Check Assessments of Boston, LLC

Wreck Check Assessments of Boston, LLC is a vehicle inspection and valuation company with specialized knowledge of collision repair and loss recovery. We are committed to assisting the consumer in the loss recovery process of damaged vehicles. Our philosophy is to provide vehicle owners with the tools required to navigate the complex maze of collision repair with an easy to understand methodology of the loss recovery process. We provide a credible and clear alternative information source, post repair inspections and experts to review damaged and repaired vehicles. We restore piece of mind by assuring the client that the vehicle is safely and properly repaired. Wreck Check of Boston is your consumer protection headquarters in the collision repair industry.