DEPARTMENT OF INSURANCE

Office of the Commissioner

PROPOSED

PUBLIC NOTICE

602 Motor Vehicle Physical Damage Appraisers

INSURANCE COMMISSIONER KAREN WELDIN STEWART hereby gives notice of re-proposed amended Department of Insurance Regulation 602 relating to Motor Vehicle Physical Damage Appraisers [Formerly Regulation 8]. The docket number for this proposed AMENDED regulation is 2803-2015.

Amendments are being proposed to permit the use of digital imaging by appraisers. The Delaware Code authority for the change is 18 Del.C. §311 and Ch. 17; and 29 Del.C. Ch. 101.

The Department of Insurance does not plan to hold a public hearing on the proposed amended regulation. The proposed amended regulation appears below and can also be viewed at the Delaware Insurance Commissioner's website at: www.delawareinsurance.gov/departments/documents/ProposedRegs/ProposedRegs.shtml

Any person can file written comments, suggestions, briefs, and compilations of data or other materials concerning the proposed amendment. Any written submission in response to this notice and relevant to the proposed regulation must be received by the Department of Insurance no later than 4:30 p.m. EST, Thursday, March 31, 2016. Any such requests should be directed to:

Regulatory Specialist Rhonda West

Delaware Department of Insurance

841 Silver Lake Boulevard

Dover, DE 19904

Phone: (302) 674-7379

Fax: (302) 739-5566

Email: Rhonda.West@state.de.us

602 Motor Vehicle Physical Damage Appraisers

18 Del.C. Ch. 17 has been amended to include motor vehicle physical damage appraisers under the license requirements therein. The following regulation is required to set standards of conduct for appraisers and to implement the provisions of Chapter 17 and establish through regulations guideline procedures for the manner in which motor vehicle physical damage appraisers conduct their business.

It is not contemplated that this regulation shall apply where no appraisal has been assigned. Recognition is given to the fact that many minor damage claims do not require a formal appraisal and to require such would be an undue burden upon the parties involved.

1.1 As used in 18 Del.C. Ch. 17:

“Appraisal” is not considered to include an estimate of repair to be performed by the individual or entity making such estimate.

“Appraiser” means a motor vehicle physical damage appraiser licensed under the provisions of 18 Del.C. Ch.17. This shall include all persons who in this State practice the appraisal of motor vehicle physical damage.

“Appraiser” is not considered to include an estimate of repair to be performed by the individual or entity making such estimate;

“Motor vehicle” means any "motor vehicle" as defined in 21 Del.C. §101.

2.1 Each appraiser, while engaged in appraisal duties, shall carry the license issued to him by the Insurance Department and shall display it, upon request, to an owner whose vehicle is being inspected, to the repair shop representative involved or to any authorized representative of the Insurance Department.

3.1 The appraiser shall exchange a legible copy of his appraisal with that of the repair shop selected to make the repairs and also furnish a copy to the owner of the vehicle. This appraisal shall contain the name of the insurance company ordering it, if any, the insurance file number, the number of the appraiser's license and the proper identification number of the vehicle being inspected. All unrelated or old damage should be clearly indicated on the appraisal which shall include an itemized listing of all damages, specifying those parts to be replaced or repaired. Because an appraiser is charged with a high degree of regard for the public safety, the operational safety of the vehicle shall be paramount in considering the specification of new parts. This consideration is vitally important where the parts involved pertain to the drive train, steering gear, suspension units, brake system or tires.

4.1 No appraiser shall secure or use repair estimates that have been obtained by the use of photographs, telephone calls or in any manner other than a personal inspection. An appraiser may prepare an appraisal or a repair estimate on a motor vehicle that has been damaged as a result of a covered loss either from the appraiser’s personal inspection of the vehicle or from photographs, videos, or electronically transmitted digital imagery of the motor vehicle; provided, however, that no insurer may require an owner of a motor vehicle to submit photographs, videos, or electronically transmitted digital imagery as a condition of an appraisal. If the owner of a motor vehicle is not satisfied with an appraisal based upon photographs, videos, or electronically transmitted digital imagery of the motor vehicle, the owner of the motor vehicle may require an insurer to obtain an appraisal based on a personal inspection.

5.1 No appraiser shall require that repairs be made in a specified repair shop.

6.1 Every appraiser shall promptly reinspect damaged vehicles prior to the repairs in question when supplementary allowances are requested by repair shops and the amount or extent of damages is in dispute.

7.1 Every appraiser shall:

7.1.1 Conduct himself in such a manner as to inspire public confidence by fair and honorable dealings;

7.1.2 approach the appraisal of damaged property without prejudice against, or favoritism toward, any party involved in order to make fair and impartial appraisals;

7.1.3 disregard any efforts on the part of others to influence his judgment in the interest of the parties involved;

7.1.4 prepare an independent appraisal of damage;

7.1.5 inspect a vehicle within six working days of assignment to the appraiser unless intervening circumstances (i.e., catastrophe, death, failure of the parties to cooperate) render such inspection impossible.

8.1 No appraiser shall:

8.1.1 Receive directly or indirectly any gratuity or other consideration in connection with his appraisal services from any person except his employer or, if self‑employed, his customer;

8.1.2 Traffic in automobile salvage if such salvage is obtained in any way as a result of appraisal services rendered by him for his own benefit.

This proposed amended regulation shall become effective 10 days after being published as a final regulation.