On October 17, 2001, Network Information Communications, Inc. announced the release of its Seven Levels of Repair and Diminished Value (SLR). While the document never really gained steam as a universal measurement of auto repair quality, it has, nonetheless, survived with the help of some visionaries as a tool capable of putting insurers, shops and consumers on the same page when discussing auto body repairs and expectations of quality at claimtime.

Before creation of the Seven Levels of Repair and Diminished Value, insurance companies and auto body repair shops could only claim a vehicle was "repaired" without defining what "repair" meant in relation to automobile damage reconstruction. Post repair inspections on hundreds of supposedly "repaired" cars and trucks still exhibiting evidence of accident damage, convinced NIC's founder Jim Lynas that the word "repair" was far too ambiguous to describe the complicated processes necessary to fully restore a car after an auto accident. The ambiguity in the word "repair" created an environment that allowed insurers to benefit handsomely by paying less money on claims. Shops, too, gained a financial windfall by passing on marginal work that took less time to complete in place of repairs to preloss condition that consumers are entitled to receive as a means of indemnification.

Hundreds of actual case studies compiled by WreckCheck post repair inspectors across the country have shown that when an insurance company adjuster underestimates a repair and the repair shop follows the estimate, poor quality repairs result. Insurance companies typically try to avoid direct liability for controlling auto body repairs, specifying the time, labor and materials and in some cases selecting the shop, by stating something like: "We have paid for the repair; if you have a quality issue, take it up with the shop." Insurance companies have also avoided defining commonly used terms such as "pre-loss condition," "like kind and quality," 'industry standard," and "reasonable and customary" in relation to automobile collision repair. Why? Because with more ambiguity comes even more savings.

The SLRs provide separation and clarification; they also help define these terms by providing a yardstick by which to measure automotive repairs and the level of insurance indemnification.

In the late 90's, court cases that focused on Inherent Diminished Value (a phrase defined by Wreck Check in 1995) were only marginally successful. Some of them failed, in part, because courts couldn't grasp differences between the word "repair" and the term "pre-loss condition" as used within the insurance contract. They just couldn't get the fact that repairs were being promised at one level in insurance contracts and delivered at a lesser level in the repair shop. NIC developed the Seven Levels of Repair and Diminished Value with the hope it would provide the standard by which insurance indemnification could finally be measured.

Shops and consumers have used the Seven Levels of Repair and Diminished Value with only moderate satisfaction in part because most shops didn't want the quality of their auto repair work to be graded. Despite the fact that the document can be used as a tool to better understand the level of indemnification insurers offer and, ultimately, the repair industry provides, most consumers don't even know it exists.

Consumers could send the Seven Levels of Repair and Diminished Value to a shop and ask that the shop to please state in writing which level of repair it intends to provide for the amount quoted on its estimate. Likewise, they may send the document to an insurer to inquire as to what level of indemnification was intended in its claims payment.

Shops, too, can benefit by using the Seven Levels of Repair and Diminished Value. For example, a shop may use the document as a tool to explain to consumers and insurance companies that the insurance estimate only allows for repairing the vehicle to Repair Level DV-3, while the shop's damage appraisal will provide a Repair Level DV-2. By matching a vehicle's condition to a specific level of repair as defined by this document, consumers can have proof that the insurer failed to provide the pre-loss repair promised by the insurance contract and the law. With the Seven Levels of Repair and Diminished Value, the insurance and repair industries can be specific when using the word "repair" because the word will have specific meaning as opposed to being vague and ambiguous.

Please note: the Seven Levels of Repair and Diminished Value do not set the amount of value loss for any category. Even if a vehicle does achieve Repair Level DV1, it may very well still suffer from an actual loss in market value.

For more information on the Seven Levels of Repair and Diminished Value as well as a complete copy of the document, visit the links below:

• Seven Levels of Repair and Diminished Value
  Network Information Communication / Oct 2001

content & design 2002-2008 David Williams and SafeCollisionRepairs.com

About Safe Collision Repairs

For more than ten years, David Williams of Wheelersburg, Ohio's Safe Collision Repairs has worked with consumers and attorneys in the tri-states of Ohio, Kentucky and West Virginia to expose unsafe auto repairs and maximize recovery on auto insurance claims. Some of the company's services include Post-Repair Inspections, Prepurchase Inspections, Auto Damage Assessments, Lemon Law Investigations, Expert Court Testimony and Diminished Value Calculations using an advanced version of Network Information Communication's WreckCheck program.

Inquiries can be directed to: Safe Collision Repairs David A. Williams Post Office Box 70 Wheelersburg, Ohio 45694 (740) 456-1111 (740) 355-4056

Disclaimer

The content expressed on this website and in the article above represents the opinions of David A. Williams. Williams is neither an attorney nor public insurance adjuster, but is an expert, consultant, and writer specializing in the field of automotive collision repair and valuations. The information provided herein is not intended to be a substitute for legal or insurance advice. Because collision repair is a continually evolving science, any text, materials or links found herein are provided without claim or guarantee to their accuracy or completeness.