Rules under the NJ Regulations pertaining to an insurance company referring a claimant to a DRP Shop for repairs.
N.J.A.C. 11:3-10.3 Adjustment of partial losses
(d) No insurer shall negotiate the settlement of any physical damage claim
involving an automobile as defined at N.J.S.A. 39:13-1b with an unlicensed auto
body repair facility or in any manner utilize an unlicensed facility in the
adjustment, negotiation or settlement of such a claim. It shall be the
responsibility of the insurer to make a reasonable and diligent effort to
determine whether the facility is properly licensed.
(e) Subject to the requirements of (d) above, the insured may use any repair
facility of his or her own choice. With respect to automobile damage claims,
the insurer shall notify in writing any insured who elects to use his or her own
repair facility that, pursuant to law, any entity engaged in the business of
auto body repairs must be duly licensed. The notice shall further advise the
insured that the insurer is prohibited by law from negotiating, adjusting or
settling an automobile damage claim with an unlicensed facility. The written
notice shall be furnished at the time of acknowledgment of the claim as provided
at N.J.A.C. 11:2-17.6 or upon the furnishing of its written estimate, as
specified at (c) above, whichever is sooner. The insurer must make all
reasonable efforts to obtain an agreed price with the facility selected by the
insured. The insurer may recommend, and if the insured requests, must
recommend a qualified repair facility at a location reasonably convenient
to the insured motor vehicle who will repair the damaged motor vehicle at the
insurer's estimated cost of repairs, but in either event the provisions of (g) below
(f) All estimates, including revisions and adjustments, prepared by any repair
facility, estimator or appraiser must be included in each claim file.
(g) If the insured's vehicle is repaired at a repair facility whose name is
furnished by the insurer under (e) above for a sum estimated by the insurer as
the reasonable cost to repair the vehicle, the insurer:
1. Shall select a repair facility that issues written guarantees that any work
performed in repairing damaged vehicles meets generally accepted standards for
safe and proper repairs;
2. Shall cause the damaged vehicle to be restored to the condition it was in
prior to the loss, at no additional cost to the insured and within a reasonable
time, if the repair facility does not repair the damaged vehicle in accordance
with generally accepted standards for a safe and proper repair.
(h) Whenever an insurer elects to repair its insured's vehicle, that is,
physically take the vehicle and have it repaired, the election must be in
writing addressed to the insured and contain a reasonable estimate of the time
period within which the vehicle will be repaired. The insurer shall guarantee,
in writing, that the work performed meets generally accepted standards for safe
and proper repairs.