Auto Insurance

Automobile Physical Damage Claims

A frequent inquiry MID receives is in regard to automobile physical damage claims. Consumers want to know what’s covered, how claims are handled and how measure of damage is determined. Additionally MID is often asked for guidance regarding issues which may arise between body shops and insurers.

Use the index below to go directly to a particular section on this page:


Types Of Claims

There are two types of claims that can be made under an automobile insurance policy: either a first-party claim or a third-party claim. First-party claims are claim filed by the policyholder, such as Uninsured Motorists (UM) coverage, medical payments and collision/comprehensive coverages. Third-party claims are claims where the policyholder is at fault, such as liability and property damage coverages. It is important to note that an insurance company has a greater duty to the claimant in third-party claims than in first-party claims.

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Steering

Under Mississippi law, an insurance company may not dictate to you where you must have your repairs made. An insurance company may recommend that repairs be made at a designated repair facility where they have a contractual relationship; however, payment of the claim may not be conditioned on the use of a particular repair facility. Also, an insurance company cannot refuse to pay a claim because the repairs were made at a particular repair facility.

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Measure of Damage

The damages that may be recovered under an automobile claim is defined in the policy and is often the actual cash value of the property immediately prior to the loss, or the amount necessary to properly repair the damage.

Most policies will provide for two (2) different manners for recovery by the policyholder:

  1. Insurance company pays for the loss; or,
  2. Insurance company repairs the vehicle.

Policyholders are encouraged to read the policy to clearly understand what the insurance company will pay under the policy. Any dispute regarding whether the insurance company has paid in accordance with the policy is a question of fact. A question of fact is to be determined by the finder of fact, which is either a jury or a judge.

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Amounts to be Paid

By law, the most an insurance company shall be required to pay for the repair of the vehicle or repair or replacement of the glass is the lowest amount that such vehicle or glass could be properly repaired or replaced by a contractor or repair shop within a reasonable geographical or trade area of the insured. Most insurance policies actually provide for greater payment than what is statutorily required in Mississippi by providing that the insurance company will pay the median or average amount to properly and reasonably repair or replace within the policyholder’s geographical or trade area.

In preparing an estimate, an insurance company will base the amount it will cost to properly repair the vehicle on the insurance company’s set hourly rate pursuant to policy terms. This estimate will be provided to the policyholder before repairs are made. The insurer’s hourly rate must conform to statutory law.

A policyholder may choose to have the repairs made at a repair facility that charges more than what the insurance company has agreed to pay. Insurance companies do not set repair facility hourly rates so there may be a difference between the two rates. In that instance, either the repair facility will agree to make the repairs for the amount in the insurance company’s estimate or the policyholder will have to pay for the difference.

Policyholders should be aware of and address any potential differences between the insurance company’s and the repair facility’s estimate before allowing the repair facility to begin to repair the vehicle.

If additional damage is discovered in the repair process, the insurer will inspect the vehicle before agreeing to the repairs. After it is determined these repairs are needed and covered under the policy, a supplemental check will be issued to the repair facility to cover these additional costs.

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AMP vs. Non-OEM

Mississippi law allows for the use of Aftermarket parts (AMP) and Non-original equipment manufactured aftermarket crash parts. AMP and Non-OEM parts may be authorized for use by the insurer and used by the repair facility in the manner authorized by Mississippi law for making repairs. AMP and Non-OEM parts are allowed to be used if they are used in conformance to statutory law, the provisions of the policy, and the parts properly and safely repair the vehicle.

AMP is commonly referred to as “used” parts. However, AMP may be new or used parts. AMP is defined by law as the replacement for any of the non-mechanical sheet metal or plastic parts which generally constitutes the exterior of a motor vehicle. As these are parts manufactured by the car manufacturer, there is no statutory requirement that the use of these parts be disclosed to the insured.

Non-OEM parts are aftermarket crash parts that are made by any manufacturer other than the original vehicle manufacture or his supplier. Some repair facilities may use the term “Competitive Parts” when referring to these types of parts. As Non-OEM parts are not made by the original manufacturer, there are certain statutory requirements that must be followed when using them:

  1. Each part must have either affixed or inscribed on it the logo, identification number or name of the manufacturer; and
  2. If an estimate is made by the insurer using non-OEM parts, the written estimate prepared by the insurer and repair facility shall clearly identify each part and include the disclosure statement provided by Mississippi Code.

A policyholder is not required to accept a non-OEM part as part of their repairs but may be required to make up the difference in price.

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Getting Assistance From The Mississippi Insurance Department (MID)

This information has been provided to give policyholders more information regarding their automobile insurance and any automobile claims they may have. While MID will provide any assistance it can in trying to resolve a matter for a policyholder, the Commissioner of Insurance does not have judicial authority and cannot issue a finding of fact or order a company to pay a claim.

If a policyholder has any questions regarding their claim or policy in general, please see the Request Assistance Page for information on how to contact us

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