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Nevada Insurance Commissioner Barbara Richardson. (Provided by Nevada Department of Business and Industry)

Update: Nevada DOI reminds insurers of aftermarket parts notification, OEM repair procedure duties

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Announcements | Business Practices | Insurance | Legal | Repair Operations

The Nevada Division of Insurance last month reminded auto insurers that they must follow Nevada laws and regulations demanding they and body shops follow OEM repair guidelines and also tell customers when aftermarket parts will be installed.

“If an insurer does not provide the required disclosures or refuses to authorize repairs in accordance with (OEM) specifications and/or repair-industry standards, the insurer is engaging in unfair claims-settlement practices as defined in NRS 686A.310,” Commissioner Barbara Richardson wrote.

DOI spokeswoman Yeraldin Deavila said there wasn’t any specific impetus for the bulletin.

“From time to time, the Division issues Bulletins on a variety of topics to provide clarification/guidance, or serve as a reminder to the insurance industry,” Deavila wrote in an email. “I am not aware of any specific complaints on this topic that prompted the Bulletin.”

Aftermarket parts

In Nevada, “non-OEM parts must be warranted to be of like kind and quality,” and the estimate must have a 10-point-type message telling a policyholder that such parts were even used, Commissioner Barbara Richardson wrote July 22.

Though this isn’t mentioned in the bulletin, this portion of Nevada Administrative Code only refers to inner and outer panels.

“As used in this section, “body part” means a sheet metal, plastic, or composite part of a motor vehicle which is nonmechanical and used to replace a part on the exterior of a motor vehicle,” NAC 686A.240 also states. “The term includes the inner and outer panels of a motor vehicle.”

Richardson also noted that the body shop itself must get written consent from the customer to use the parts, identify each part “and its origin,” and explain that the warranties are from the manufacturer, not the automaker.

Repair procedures

Though the bulletin is directed at insurers, collision repairers should also heed Richardson when she quotes part of Nevada Revised Statutes 487.688 to state “the body shop or garage must perform the repairs in accordance with any specifications of the manufacturer.” That’s probably one for other states to copy.

OEM procedures appear to be necessary too in the last area highlighted by Richardson: properly repairing “safety equipment.” Under NRS 487.520(2), which Richardson quotes, any of those components must be “repaired or replaced to the standards published and commonly applied in the motor vehicle repair industry.”

For those looking for help finding OEM procedures, find links to three good options in our coverage here.

More information:

“Bulletin 16-005: Use of After-Market Parts in Vehicle Repair”

Nevada Division of Insurance, July 22, 2016

Featured image: Nevada Insurance Commissioner Barbara Richardson. (Provided by Nevada Department of Business and Industry)