The office of General Counsel issued the following informal opinion on March 6, 2002, representing the position of the New York State Insurance Department.
Re: Glass Claims
Questions Presented:
1. May an automobile insurer recommend to its insureds, to bring their automobiles to a specified facility for glass damage repair after an automobile accident has occurred?
2. If an insured elects to have glass damage repaired by a facility other than the named facility recommended by the insurer, is the insurer financially responsible for any excess repair cost over the cost that the recommended facility would have charged had it performed the glass damage repair?
Conclusion:
1. Yes. An insurer may recommend to its insureds that they bring their automobile to a specified facility for glass damage repair.
2. No. If an insured elects to have his or her glass damage repaired by a facility other than the facility recommended by the insurer, the insurer is not financially responsible for any excess repair cost over the cost the recommended facility would have charged had it performed the glass damage repair.
Analysis:
N.Y.S. Ins. Law § 2610(b) (McKinney 2000), which addresses claims for repair costs after a motor vehicle collision or comprehensive loss has occurred, states that:
"(a) Whenever a motor vehicle collision or comprehensive loss shall have been suffered by an insured, no insurer providing collision or comprehensive coverage therefor shall require that repairs be made to such vehicle in a particular place or shop or by a particular concern.
(b) In processing any such claim (other than a claim solely involving window glass), the insurer shall not, unless expressly requested by the insured, recommend or suggest repairs be made to such vehicle in a particular place or shop or by a particular concern."
The Legislature has specifically chosen to exempt glass damage repair from the bar against insurer recommendation or referral to a specified facility.
2. N.Y. Comp. Codes R. & Regs. tit 11, § 216.7 (1995) governs standards for prompt, fair and equitable settlement of motor vehicle physical damage claims. With respect to the adjustment of a partial loss, Section 216.7(b)(1) requires that when an insurer exercises its right to inspect physical damage of a motor vehicle " negotiations shall commence and a good faith offer of settlement, sufficient to repair the vehicle to its condition immediately prior to the loss, shall be made to the designated representative, and it may also be made to the insured." When the insurer makes a good faith offer of settlement after inspection, including the insurers detailed written estimate of the cost of repairing the damages resulting from the loss, Section 216.7(b)(14)(ii) of the regulation requires that the insurer must also provide the name address of a New York registered motor vehicle repairer, " properly equipped to complete the repairs on the damaged motor vehicle (back-up shop), at a location reasonably convenient to the insured, who will repair the damaged motor vehicle at the insurers estimated cost of repair."
Under these circumstances, if an insurer has met the requirements of Section 216.7 by making a good faith offer to the insured to pay for the cost of repair and identifying a facility that will repair the damage at the cost estimated by the insurer, the insurer is not obligated by pay for any repair cost that exceeds the amount of the bona fide offer required under the regulation. The insured is not required to have the damage repaired at the insurers identified facility. However, if the insured elects to repair the vehicle at a facility other than the identified facility, the insurer is not financially responsible to the facility for any repair cost in excess of the insurers bona fide repair offer.
For further information you may contact Supervising Attorney Lawrence M. Fuchsberg of the New York City Office.