PDF: download | view
MASSACHUSETTS
MANDATORY
PRE‑INSURANCE
INSPECTION
OF PRIVATE PASSENGER
MOTOR VEHICLES
 211
CMR: DIVISION OF INSURANCE
211 CMR 94.00:Â
SECTION
94.01:
Authority
94.02:
Scope and Purpose
94.03:
Definitions
94.04:
Mandatory Inspection Requirements
94.05:
Exemptions to Inspection Requirement
94.06:
Waiver of Inspections
94.07:
Deferral of Inspections
94.08: Standards
.and Procedures for Inspections
94.09:
Standards for Suspension of Physical Damage Coverage
94.10: Inspection
Services
94.11:
Conflicts of Interest
94.12:
Enforcement
94.13:
Records and Audits
94.14:
Forms
94.15:
Severability
94.01:
Authority
211
CMR 94.00 is issued pursuant to the authority granted the
Commissioner of Insurance by M.G.L. c. 175, § 113S.Â
94.02:Â Scope
and Purpose
The purpose of 211 CMR 94.02 is to establish standards and procedures
for the inspections of certain used cars prior to the issuance
by insurers of physical damage insurance coverages. 211 CMR
94.00 applies to all private passenger motor vehicles insured
in the Commonwealth unless specifically exempted or waived
under 211 CMR 94.00
94.03:
Definitions
As
used in 211 CMR 94.00, the following words will have the
meanings indicated:
Applicant means
the named insured, as defined in the Standard Massachusetts
Motor Vehicle Insurance Policy or an applicant for a motor
vehicle liability policy or bond.
Authorized
Representative means any person or legal entity,
other than the applicant, authorized by an insurer to
conduct
pre‑insurance inspections pursuant to 211 CMR 94.00
and may include an employee of the insurer, or a producer
or inspection service.
Book
of Business means all motor vehicle insurance written
by one producer with one insurer.
Certificate
of Mailing means a notice by regular mail with a certificate
of mailing endorsed by the United States Postal Service.
Commissioner means
the Commissioner of Insurance appointed under the provisions
of M.G.L. c. 26; § 6, or his or her designee.
Division means
the Division of Insurance within the Department of Banking
and Insurance.
Existing
Customer means an applicant for a motor vehicle liability
policy or bond who has been insured for three years or
longer, without interruption, under a motor vehicle liability
policy or policies which include(s) physical damage coverage,
issued by the insurer to which the application is submitted.
An existing customer shall include any applicant involuntarily
transferred to another insurer due to the applicant's original
insurer's withdrawal from the Commonwealth, if the applicant
otherwise qualifies under 211 CMR 94.00.
Inspection Service means any person or legal entity, other
than the applicant, designed and operated to perform inspections
required by 211 CMR 94.00 and which is approved by the insurer.
In determining whether to approve an inspection service an
insurer may take into consideration the service's professionalism,
efficiency and cost effectiveness.
Insurer means
any insurance company authorized to write motor vehicle insurance
in the Commonwealth.
Motor
Vehicle Liability Policy or Bond means an insurance
policy or bond as defined in M.G.L. c. 90, §§ 34A, 340,
and M.G.L. c. 175
Nonowned Motor Vehicle means a private passenger motor vehicle
in the possession of the applicant or being operated by the
applicant which is neither owned by nor furnished for the
regular use of either the applicant or any relative (as defined
in the policy) other than a temporary substitute motor vehicle,
as defined in 211 CMR 94.03: Temporary Substitute Motor
Vehicle.
Physical Damage Coverage means
the optional coverages in a motor vehicle liability policy
or bond for collision or
limited collision and/or fine and theft or so‑called
comprehensive coverages as defined in M.G.L. c. 90, § 34(0)
and M.G.L. c. 175, § 1130.
Private Passenger Motor Vehicle means
any owned or leased four‑wheeled motor vehicles including, but not limited
to, sedans, coupes, hatchbacks, station wagons, jeep‑type
vehicles, pick‑up trucks, panel trucks, delivery
sedans and vans, except vehicles which have a gross weight
in excess
of 8,000 lbs.
Producer means
an agent or broker licensed pursuant to M.G.L. c. 175, §§ 163
or 166, to write property and casualty insurance in the
Commonwealth, including a representative
producer as defined by the rules for the Commonwealth Automobile
Reinsurers established pursuant to M.G.L. c. 175, § 113H.
Temporary Substitute Motor Vehicle means any private passenger
motor vehicle not owned by the applicant, which is used by
the applicant, with the permission of the owner, as a temporary
substitute due to breakdown, repair, servicing, loss or destruction
of the applicant's own motor vehicle.
94.04:
Mandatory Inspection Requirements
(1) No motor vehicle liability policy or endorsement insuring a
private passenger motor vehicle for physical damage coverage,
shall be issued or renewed in the Commonwealth unless the
insurer has inspected the motor vehicle in accordance with
211 CMR 94.00.
(2) Physical damage coverage shall not be effective on an additional
or replacement motor vehicle under an existing policy, unless
otherwise exempted, until the insurer has inspected the motor
vehicle in accordance with 211 CMR 94.00.
94.05:
Exemptions to Inspection Requirement
(1)
The requirement of an inspection shall not apply to the following
     (a)
a new, unused motor vehicle from a franchised automobile
dealership
where the insurer is provided with either. a copy of the
bill of sale which contains a full description of the motor
vehicle including all options and accessories; or a copy
of the RMV Form 1 provided by the Registry of Motor Vehicles,
which establishes the transfer of ownership from the dealer
to the customer and a copy of the window sticker or the
dealer invoice showing the itemized options and equipment
in addition
to the total retail price of the vehicle. The physical
damage coverage on such new, unused motor vehicle shall
not be suspended
during the term of the policy due to the applicant's failure
to provide the required documents. Payment of a claim,
however, shall be conditioned upon the receipt by the
insurer of such
documents and no physical damage loss occurring after the
effective date of the coverage shall be payable until the
documents are provided to the insurer. If the above documents
are not submitted by the applicant at least 60 days prior
to the applicant's annual renewal date, the insurer, upon
renewal of the physical damage coverage, must require an
inspection as set forth in 211 CMR 94.00;
(b) the applicant is an existing customer;
(c) the motor vehicle is already insured
for such physical damage coverages with the insurer by the
applicant;
(d) an inspection is waived by the insurer
pursuant to 211 CMR 94.06; (e) a temporary substitute motor
vehicle;
(f) a motor vehicle which is leased for
less than six months, provided the insurer receives the lease
or rental agreement containing a description of the leased
motor vehicle including its condition. Payment of a physical
damage claim shall be conditioned upon receipt of the lease
or rental agreement;
(g)Â when
requiring an inspection would cause a serious hardship
to the insurer or the applicant
and such hardship is documented in the applicant's policy
record; or
(h) when the insurer has no inspection
facility or authorized representative either in the city
or town in which the motor vehicle is principally garaged
or within five miles of said city or town.
(2) An insurer shall indicate in the applicant's
policy record the reason a vehicle is being exempted from
the inspection requirement under 211 CMR 94.00.
(3) An insurer may require an inspection
of a motor vehicle otherwise exempt pursuant to 211 CMR 94.05(1)
provided that the decision to inspect such motor vehicle
is reasonable and supported by objective facts. The decision
to require such an inspection shall not be based on the age,
race, sex, or marital status of the applicant or the customary
operators of the vehicle, the principal place of garaging,
or the fact that the policy has been ceded to the residual
market mechanism. A written record of the reasons for requiring
an inspection, pursuant to 211 CMR 94.05(3) shall be placed
in the applicant's policy record.
94.06: Waiver of Inspection
(1) An insurer may waive an inspection
under any of the following circumstances:
(a) for policies issued or renewed during
calendar year 2002, all 1992 and older model year vehicles.
For policies issued or renewed during each calendar year
thereafter, the applicable model year shall be moved forward
by one year. For example: in 2002 an insurer must inspect
1993 and newer model year vehicles and in 2003 an insurer
must inspect 1994 and newer model year vehicles. An insurer
may elect to inspect specified vehicles included within this
waiver. Such exceptions to this optional waiver must be based
on underwriting criteria uniformly applied;
(b) where a nonowned motor vehicle is
insured under a policy providing physical damage coverage
issued by an insurer which has inspected such motor vehicle
in accordance with the provisions of 211 CMR 94.00;
(c)
where the insured motor vehicle is insured under a commercially‑rated
policy which insures a fleet of five or more motor vehicles
owned by the same
person or legal entity;
(d) when a producer is transferring a
book of business from one insurer to one or more insurers;
or
(e) when an individual applicant's coverage
is being transferred by an independent insurance agent to
a new insurer and said agent provides the new insurer with
a copy of the inspection report completed on behalf of the
previous insurer, provided the independent agent represents
both insurers, and the insured vehicle was physically inspected
by the previous insurer. However, if the new insurer does
not receive a copy of the inspection report 60 days prior
to the first annual renewal date, the insurer must, upon
renewal of the physical damage insurance, require an inspection
as set forth in 211 CMR 94.00; or
(f)Â When the motor vehicle is insured
for physical damage on the applicant's expiring Massachusetts
Automobile Insurance Policy, or when a copy of a prior Pre‑insurance
Inspection is provided; or
(g) When the applicant has been the customer
of the producer for at least three years under a Massachusetts
Automobile Insurance Policy which included physical damage
coverage.
(2) Any decision to waive or not to waive
an inspection pursuant to 211 CMR 94.00, shall not be based
on the age, race, sex, or marital status of the applicant
or the customary operators of the vehicle, the principal
place of garaging, or the fact that a policy has been ceded
to the residual market mechanism
94.06: continued
(1) An insurer shall indicate in the applicant's
policy record the reason a waiver has been granted.
94.07: Deferral of Inspection
(1)
An insurer may defer an inspection for ten calendar days
(not including legal holidays and Sundays)
following the effective date of coverage or the date on
which the insurer or the producer of record mailed the Notice
of
Mandatory Pre‑insurance Inspection Requirement (Form
B) whichever is later on new business and on additional
or replacement vehicles to an existing policy, if an inspection
at the time of the request for coverage would create a
serious
inconvenience for the applicant.
(2)(a) When an inspection is deferred
pursuant to 211 CMR 94.07(1) or (4), an insurer, through
its producer, shall either.
1.  immediately
obtain the prescribed acknowledgment (Form D) signed by the
applicant
if the applicant has applied for coverage in person; or
2.  immediately
confirm physical damage coverage and remind the applicant
of the inspection
requirement on a prescribed notice letter (Form B) if the
applicant has applied for coverage either by mail or by
phone.
(b) In addition to the notice requirements
of 211 CMR 94.07(2)(a), the insurer, through its producer,
shall furnish the applicant, at the time coverage is effected,
with a list of inspection sites where the inspection can
be conducted. The list of inspection sites may be provided
in writing, through a toll free number or by electronic access,
as convenient for the applicant. The location of an inspection
site or sites and the consequences of the applicant's failure
to obtain a timely inspection shall be furnished immediately
to the applicant either in person, if the applicant has applied
for coverage in person, or by telephone, if the applicant
has applied for coverage by phone. Documentation of such
notice, including the name of the person giving the notice
must be contained in the applicant's policy record.
(3)
Producers must use the prescribed NOTICE OF MANDATORY
PRE‑INSURANCE INSPECTION REQUIREMENT
letter (Form B) or the prescribed ACKNOWLEDGMENT OF REQUIREMENT
FOR PRE‑INSURANCE INSPECTION letter (Form D) (see 211
CMR 94.14) and immediately send a copy to the insurer. A
copy of the confirmation letter addressed to the applicant,
and Certificate of Mailing thereof, or the completed acknowledgment
letter shall be retained by the producer in the applicant's
policy record. In the case of a so‑called courtesy
transfer, the producer confirming coverage shall be responsible
for the immediate notification to the applicant pursuant
to 211 CMR 94.07(2)(a)1., unless the application for coverage
is submitted by a person other than the applicant. In such
cases, the producer of record shall remain responsible
for notification pursuant to 211 CMR 94.07(2)(a)2. and
94.07(2)(b).
The producer confirming coverage shall immediately forward
a copy of the acknowledgment (Form D) to the producer of
record who shall then be responsible for forwarding a copy
to the insurer as required by 211 CMR 94.07(3).
(4)
If the insurer is required, pursuant M.G.L c. 175, § 113H, to provide physical damage coverage at the option
of the applicant, it shall provide, upon an applicant's request
for such physical damage coverage, immediate coverage and
may defer the inspection for the ten calendar days (not including
legal holidays and Sundays) following the effective date
of coverage or the date on which the insurer or the producer
of record mailed the Notice of Mandatory PreÂinsurance
Inspection Requirement (Form B) whichever is later.
(5) Any decision to defer or not to defer
an inspection pursuant to 211 CMR 94.00 shall not be based
on the age, race, sex, or marital status of the applicant
or the customary operators of the vehicle, the principal
place of garaging, or the fact that a policy has been ceded
to the residual market mechanism.
94.08: Standards and Procedures for
Inspections
(1) Inspections required or permitted
pursuant to 211 CMR 94.00 shall be made by a designated authorized
representative of the insurer at a time and place reasonably
convenient to the applicant. A reasonably convenient time
shall include, in addition to customary business hours, sufficient
early morning, evening and weekend hours. A reasonably convenient
place shall not be more than five miles from the city or
town where the motor vehicle is principally garaged.
(2)(a) Any inspection authorization forms
issued by the insurer to the applicant, for presentation
to the authorized representative, shall not contain the Vehicle
Identification Number (VIN) of the vehicle to be inspected.
(b) The inspection shall:
1.
be recorded on the prescribed MOTOR VEHICLE PRE‑INSURANCE
INSPECTION REPORT (Form A) (See 211 CMR 94.14);
2.  include
two color photographs of the motor vehicle, taken as
directed on. the inspection
report, which shall be attached to the report
3.
include a close‑up color photograph
(using a special camera attachment if necessary) showing
the Vehicle Identification Number (VIN) located on the
Environmental Protection Agency/Federal Certification
Label (EPA) sticker
affixed to the driver's side doorjamb. The photograph must
be of sufficient clarity that the information contained
on the EPA sticker and the VIN is legible. If the EPA
sticker
is damaged, faded, missing or otherwise not legible, a
photograph of the EPA sticker or of the area of the doorjamb
where the
sticker is normally located, is still required.
(c) The authorized representative may
take additional photographs showing any damaged areas, which
shall also be attached to the report. .
(d) The original report and photographs
shall be immediately sent to the insurer who shall retain
the report and photographs in the applicant's policy record
for three years from the date of the inspection, except as
provided by 211 CMR 94.08(6)(d). The authorized representative
shall also provide a copy of the report, without photographs,
to the applicant at the time of the inspection.
(3)
The insurer shall maintain an up‑to‑date
list of all authorized representatives and inspection sites
performing inspections for the insurer. The list must include
the names, addresses and business phone numbers of all
authorized representatives and the insurer shall make
such list accessible
to the Division upon request.
(4)
There shall be no charge either directly or indirectly
to the applicant in connection with an inspection,
except that such charge maybe considered in accordance
with M.G.L. c.175, § 113B
or other applicable laws.
(5) The competency and trustworthiness
of the authorized representative in the conduct of the inspections
provided for in 211 CMR 94.08 shall be the responsibility
of the insurer.
(6) An insurer shall utilize authorized
representatives who shall:
(a)Â verify
the accuracy, completeness and signature of the inspector
for each inspection report
in writing;
(b) maintain a control system on such
inspection reports including the use of sequentially numbered
reports;
(c) retain and supply to an insurer, upon
request, a copy of any inspection report which was completed
within three years of the date of inspection.
(d) provide an optional service, on an
additional fee basis, to insurers whereby the original inspection
reports and photographs are retained by the authorized representative
who shall maintain such original inspection reports and photographs
in a manner so as to facilitate rapid retrieval for a period
of at least three years from the date of inspection. A copy
of the inspection report shall be provided to the insurer.
The authorized representative shall, upon the request of
94.08: continued
the insurer, mail or deliver the original
inspection report and photographs to the insurer within two
business days of such request.
(7)(a) The inspection report and photographs
shall be used by the insurer to document previous damage,
prior condition, options and mileage of the motor vehicle
on physical damage claims whenever.
1. the appraisal indicates prior damage;
2.  the
vehicle is a total loss or unrecovered theft; or
3. the damage exceeds 51,000.
(b) A copy of the inspection report and
photographs must be utilized, and trade a part of the insurer's
claim file, in the settlement of all total loss claims. The
inspection report must be made a part of the claim file regardless
of whether or not the payment is reduced based on the information
contained therein. Such inspection report must come from
the applicant's policy record.
94.09: Standards for Suspension of
Physical Damage Coverages
(1)
If the inspection is not conducted prior to the expiration
of the ten calendar days deferral
period specified in 211 CMR 94.07(1), motor vehicle physical
damage coverage on the motor vehicle shall be suspended
at 12:01 A.M. of the day following the tenth calendar day,
and
such suspension shall continue until the inspection is
effected. The insurer must inspect the motor vehicle and
reinstate
physical damage coverage (effective at the time of the
inspection) if the applicant thereafter requests an inspection.
The applicant's
ability to reinstate the physical damage coverage upon
inspection, however, shall lapse if the insurer has already
made a proÂrata
premium adjustment pursuant to 211 CMR 94.09(2). Thereafter
a reinstatement shall only be effective upon inspection
and payment by the applicant to the insurer of the adjusted
premium
for the physical damage coverage in full or in accordance
with the insurer's normal payment plan, at the insurer's
option.
(2)
Whenever physical damage coverage is suspended, the insurer
shall, between the 21" and
30th calendar day after the effective date of the coverage
or the date on which the insurer or the producer of record
mailed the Notice of Mandatory Pre‑insurance Inspection
Requirement (Form B) whichever is later, mail to the applicant,
the producer of record, and any lienholders a prescribed
NOTICE OF SUSPENSION OF PHYSICAL DAMAGE COVERAGE (Form C)
(see 211 CMR 94.14). The insurer shall complete a certificate
of mailing of the suspension to the applicant and shall retain
the certificate and a copy of the suspension in the applicant's
policy record Whenever there is a suspension of physical
damage coverage for more than ten days, the insurer shall
make a pro‑rata premium adjustment (return premium
or credit) which shall be mailed to the applicant no later
than 45 days after the effective date of the suspension.
(3)
If the motor vehicle is not inspected pursuant to 211
CMR 94.00 due to the fault of the insurer,
or if its producer fails to give the verbal or telephone
notice required by 211 CMR 94.07(2) or mail or deliver
the NOTICE OF MANDATORY PRE‑INSURANCE INSPECTION REQUIREMENT
(Form a) or obtain the ACKNOWLEDGMENT OF REQUIREMENTS FOR
PRE‑INSURANCE INSPECTION (Form D) as set forth in 211
CMR 94.07(2) and the insurer or the producer of record has
failed to issue the Mandatory Pre‑insurance Inspection
Requirement (Form B), physical damage coverage on the motor
vehicle shall not lapse. The failure of the insurer to act
promptly does not relieve it of its obligation to inspect.
In the event that the producer of record fails to properly
communicate to the applicant the Mandatory Pre‑insurance
Inspection Requirement (Form B) or an Acknowledgment of Requirement
for Pre‑insurance Inspection (Form D), the insurer
or the producer of record must issue the Mandatory PreÂinsurance
Inspection Requirement (Form B) and the applicant has ten
calendar days to comply. An insurer's failure, however,
to comply with the provisions of 211 CMR 94.09(2) does
not restore
physical damage coverage, but shall subject the insurer
to a penalty pursuant to 211 CMR 94.12.
94.10:Â Inspection Services
(1) Inspection services shall maintain
a record of the name, address and signature of all persons
authorized by such inspection service to perform inspections,
prior to that person performing any inspections pursuant
to this regulation. Such record shall be made available to
the Division upon request.
(2) An inspection service must be approved
by the insurer for which it will be conducting inspections.
In determining whether to approve an inspection service an
insurer may take into consideration the service's professionalism,
efficiency and cost effectiveness.
94.11:Â Conflicts of
Interest
An authorized representative shall not
be deemed trustworthy if there exists any conflict of interest
which may prevent him or her from conducting a thorough and
accurate inspection. It shall be a conflict of interest for
an authorized representative to accept, in connection with
an inspection, anything of value from any source other than
the insurer.
94.12: Enforcement
(1) A violation of any provision of 211
CMR 94.00 by an insurer shall be deemed a violation under
the statute or regulation under which such insurer is licensed
and shall be sufficient grounds, after hearing, for the imposition
of fines as prescribed in the licensing statute or regulation.
Any such violation shall be considered an unfair and deceptive
act or practice in violation of M.G.L. c. 176D.
(2) A violation of any provision of 211
CMR 94.00 by an authorized representative shall be deemed
a violation under the statute or regulation under which such
authorized representative is licensed and shall be sufficient
grounds, after hearing, for the suspension or revocation
of such license and for the imposition of fines as prescribed
in the licensing statute or regulation. Any such violation
shall also be considered an unfair and deceptive act or practice
in violation of M.G.L. c. 176D.
(3) The competency and trustworthiness
of all authorized representatives in the conduct of the inspections
provided by 211 CMR 94.00 shall be the responsibility of
the insurer.
(4) Nothing contained in 211 CMR 94.00
shall be deemed to preclude the applicant, the Commissioner
or the Attorney General from pursuing any other remedy or
penalty provided by law for a violation of 211 CMR 94.00,
including any remedy provided under M.G.L. c. 93A or M.G.L.
c. 176D.
94.13:Â Records and Audits
(1) Insurers shall maintain records as
to the costs and savings related to 211 CMR 94.00 and shall
make such records available to the Division upon request.
(2) Insurers shall be responsible for
the monthly auditing of inspection reports received from
their authorized representatives and shall provide such authorized
representatives, excluding producers, with monthly status
reports indicating the total number of reports received including
the number of incomplete or incorrect reports received.
94.14: Forms
Sample
forms for Motor Vehicle Pre‑insurance
Inspection Report (Form A), Notice of Mandatory Pre‑insurance
Inspection Requirement (Form B), Notice of Suspension of
Physical Damage Coverage (Form C) and Acknowledgment of Requirement
for Pre‑insurance Inspection (Form D) as referred
to in 211 CMR 94.00 are available from:
        Division
of Insurance ‑ Legal Section
One South Station
Boston,
MA 02110
94.15: Severability
If any section or portion of a section
of 211 CMR 94.00 or its application to any person, entity
or circumstance is held invalid by any court, the remainder
of 211 CMR 94.00 or the applicability of such provision to
other persons, entities or circumstances shall not be effected
thereby.
REGULATORY AUTHORITY
211
CMR 94.00: M.G.L. c. 175, § 113S.
Â