A growing concern in Connecticut is insurers’ use of camera-phone photos for writing estimates. Rather than having licensed physical property damage appraisers physically inspect a vehicle after a collision, many insurance companies are asking their customers to submit camera phone pictures of the damage, and they are using these photos to write their estimates. Attorney John Parese, who acts as legal counsel for the Auto Body Association of Connecticut (ABAC), believes “the growing trend of using camera phone pictures prior to getting a repair professional involved is illegal, unethical, and most importantly, harmful to consumers.”
Furthermore, Parese notes that this practice violates the Connecticut Unfair Insurance Practices Act (CUIPA) and potentially other consumer protection laws. As such, Parese has written to the Connecticut Insurance Department outlining his concerns on behalf of the ABAC, in addition to writing an article for the ABAC member newsletter that emphasizes the possible dangers of this new habit and why he believes it should be declared unlawful.
In his letter to the Connecticut Insurance Department, Parese highlights portions of CUIPA that define unfair insurer practices as misrepresentations of facts and compelling insureds to settle a claim for less than the value of the repair. Though the benefits for insurers to write estimates based on camera phone photos are obvious, it creates the hazard of such estimates only capturing a fraction of the actual damage and thus encompassing only a portion of the cost to restore the vehicle to its pre-loss condition, and this is especially dangerous when claimants pocket the check instead of paying for the repairs, a common practice that is certain to increase when consumers believe the damage is purely cosmetic. Parese’s concern is that “many of these vehicles are not safe to be put back on the road, and the safety of a vehicle often cannot be assessed from a camera phone picture.”
Because claims are being paid based on claimant-taken photos that cannot possibly depict the full extent of damages, Parese sees this practice as “a fundamental misrepresentation of policy or third-party rights and benefits…Insurers have a legal and often fiduciary responsibility to make fair and complete payments for covered losses. This system is plainly designed to save insurers money on its own labor costs (i.e., less paid appraisers) and on the amount it ultimately pays on claims (i.e., calculated underpayment of claims). These savings come at the expense of consumer safety and complete reimbursement.”
In his article for the ABAC newsletter, Parese argues that using camera phone pictures to write an estimate before involving a repair professional in the process appears unethical and illegal based on the Connecticut unfair insurance practices law. In addition to safety and legal concerns, Parese also acknowledges that collision repair facilities suffer from this practice because they are losing work on these needed repairs that insurers are arbitrarily dismissing through the practice of writing estimates based on photos that can only capture cosmetic damages.
Parese hopes that the issues he has raised will convince the Connecticut Insurance Department to prohibit insurers from engaging in this unethical practice in his state. Unfortunately, his battle only encompasses the state of Connecticut, and though he is unfamiliar with the laws in other states, he encourages trade associations across the country to investigate how this trend violates their state laws and to join the battle to protect consumers and the integrity of the collision repair industry.