Nevada Motor-Damage Payments and Appraiser Roles

Introduction

When a car is damaged and repaired, two practical questions come up. First, once the repair shop finishes and sends its bill, how quickly must the insurer pay, and whose name goes on the check? Second, when someone inspects the car and prices the damage, does that person need a special Nevada license?

Nevada answers both questions in its statutes. This lesson teaches each rule, shows it in a fictional case, changes one fact to see what changes, and then lets you try new cases on your own.

What You Will Be Able to Do

• Decide whether an insurer's payment to a repair shop counts as a "delay" under Nevada law.
• Identify who the insurer's check may be made out to.
• Decide when a damaged vehicle must be repaired instead of settled for cash, including the $300 boundary.
• Recognize who counts as a motor vehicle physical damage appraiser in Nevada.
• Decide whether an appraiser needs a license or is exempt, and name the bond and fine rules.

Before you start: This lesson builds on After a loss: notice, protection, proof and insurer response and Who needs which Nevada insurance license?.

Key Starting Terms

• Motor vehicle physical damage: damage to the vehicle itself, such as a crushed fender or broken windshield. It is not about injuries to people or about the driver's liability to others.
• Insurer: the insurance company that issued the policy.
• Insured: the person the policy protects. In this lesson, that is the vehicle's policyholder.
• Claim: the insured's request for the insurer to pay for a loss.

Rule 1: The 30-Day Payment Rule

The basic idea

Under NRS 686A.300, an insurer that covers motor vehicle damage must not delay payment after the repair shop sends its bill for finished work. Here, delay means something specific. It is the insurer's failure to issue payment within 30 days after the insurer receives the shop's statement of charges, for repairs that have been satisfactorily completed.

Each part of that rule needs a plain-English translation:

• Statement of charges: the shop's bill for the repair work. It is provided under a separate Nevada repair-shop statute, NRS 487.6893.
• Garage or licensed body shop: a garage, or a body shop that holds a license under Nevada's chapter 487. A body shop does auto body repair work.
• Previously authorized by the insured: the insured gave that shop permission to do the repairs before the bill arrived.
• Satisfactorily completed: the repair work is finished and done properly. A plan to repair is not enough.
• Check or draft: a check, or a draft. A draft is a written payment order that works much like a check.

Worked example

Marisol's car is damaged. Marisol authorizes Silver Mesa Body Works, a licensed body shop, to fix it. The shop finishes the repairs properly and sends its statement of charges. The insurer receives it, and the insurer issues a check to the shop 18 days later.

Here is the step-by-step reasoning:

1. Was the shop authorized by the insured beforehand? Yes. Marisol authorized it.
2. Were the repairs satisfactorily completed? Yes.
3. When did the 30 days start? On the insurer's receipt of the statement of charges.
4. Was payment issued within 30 days of that receipt? Yes, on day 18.

Result: this payment is not a delay under the statute.

Change one fact

Suppose the insurer issues the check 35 days after receiving the statement instead. Every other fact stays the same. Now the payment is outside the 30-day window, so it counts as a delay under the statute.

The tempting mistake

A common error is to start counting from the accident date or from the date of a repair estimate. An estimate is a shop's prediction of cost before the work is done. Neither date starts this clock. The statute counts from the insurer's receipt of the statement of charges for completed repairs. A clock that starts too early would make a timely payment look late.

What the rule does not decide

This rule governs timing (and, in Rule 2, who gets paid). It does not set how much the insurer owes. The policy terms decide the amount.

Take a fictional example with stated policy assumptions. The repair bill is $2,400, and Marisol's policy has a $500 deductible. A deductible is the part of a covered loss the insured bears. Assume the loss is covered and no other policy terms apply. Under those assumptions, the policy payment would be $2,400 − $500 = $1,900. The 30-day rule tells you when that payment must be issued. It does not produce the $1,900. For more on this kind of calculation, see Calculate deductibles, limits and coinsurance.

Checkpoint: Theo's insurer receives a repair estimate on the 1st of the month, before any work begins. The repairs are finished properly two weeks later, and the shop's statement of charges reaches the insurer the next day. From which event does the statute measure the 30 days?

Rule 2: Who the Check Is Made Out To

The payee is the person or business named on the check, the one entitled to cash it. Under NRS 686A.300, a timely payment must be made out to one of these:

• the garage or licensed body shop alone, or
• the insured and the garage or licensed body shop jointly. Jointly means both are named on the same check.

A check made out to the insured alone is not one of those options. It does not satisfy this payment rule.

Worked example and changed fact

On day 20, the insurer issues a check made out to "Marisol and Silver Mesa Body Works." Both the timing (within 30 days) and the payee (joint) fit the rule.

Now change only the payee. On day 20, the insurer issues the check to "Marisol" alone. The timing is fine, but the payee is not one the statute lists. Paying the right amount on time to the wrong payee does not meet this rule.

Checkpoint: On day 12 after receipt of the statement of charges for satisfactory completed repairs, an insurer issues a check payable only to the shop. Does that meet the rule's timing and payee requirements?

Rule 3: When the Car Must Actually Be Repaired

The basic idea

Sometimes someone besides the driver has a legal stake in the car. NRS 686A.300 says the vehicle must be repaired by a garage or licensed body shop if either of these is true:

• The vehicle is subject to a security interest. That means a lender or other creditor has a legal claim on the vehicle, such as a bank that financed the purchase and is still owed money.
• The legal owner is different from the registered owner. The legal owner is the party holding legal ownership of the vehicle. The registered owner is the party the vehicle is registered to. They can be two different parties.

Even then, there are two exceptions where repair is not required:

• (a) the insurer has declared the vehicle a total loss, meaning the insurer has decided to treat the vehicle as a complete loss rather than a repair job; or
• (b) the total repair charge shown on the statement of charges is $300 or less.

Worked example

Jordan's car still has a bank loan on it, so it is subject to a security interest. The statement of charges shows a total repair charge of $1,750. The insurer has not declared it a total loss.

1. Is there a security interest, or a split between legal owner and registered owner? Yes, a security interest.
2. Did the insurer declare a total loss? No.
3. Is the total charge $300 or less? No, it is $1,750.

Result: the vehicle must be repaired by a garage or licensed body shop.

Change one fact at a time

• Change the charge to exactly $300. The amount is $300 or less, so exception (b) applies and repair is not required by this rule.
• Change the charge to $301. It is no longer $300 or less, so exception (b) does not apply.
• Keep $1,750, but the insurer declares the vehicle a total loss. Exception (a) applies and repair is not required by this rule.
• Remove the loan entirely, so there is no security interest and legal and registered owner are the same. Rule 3's repair requirement is not triggered at all.

The tempting mistake

Many learners read "$300 or less" as "under $300" and wrongly exclude exactly $300. The statute's wording includes $300.

Settling Without Repair

A settlement without repair is an agreement in which the insurer and insured resolve the claim without the vehicle being fixed. For example, they might agree on a payment instead.

NRS 686A.300 states that, except as provided in Rule 3, nothing in this section prohibits the insurer and insured from settling a vehicle-damage claim without providing for repair. Read the two rules together:

• Rule 3 triggered and no exception applies: this section requires repair by a garage or licensed body shop.
• Rule 3 not triggered, or an exception applies: this section does not prohibit a settlement without repair.

This statute also does not decide the settlement amount. The policy and the parties' agreement address that.

Checkpoint: Priya leases a car. The title lists a leasing company as the legal owner, and Priya is the registered owner. The statement of charges shows $2,900, and the insurer has not declared a total loss. Priya and the insurer want to settle in cash without repairing the car. What does NRS 686A.300 say?

Who Is a Motor Vehicle Physical Damage Appraiser?

The basic idea

An appraiser, in ordinary terms, is someone who inspects damage and estimates its cost. Appraising is that inspecting and pricing work. Nevada law uses a narrower, defined term.

Under NRS 684B.010, a motor vehicle physical damage appraiser is any person, partnership, association or corporation that does all of the following:

• charges a separate fee, meaning a charge specifically for the appraisal work;
• practices as a business, meaning it does this work as a business activity rather than occasionally as a favor; and
• appraises damage to motor vehicles that are either insured under automobile physical damage policies or appraised on behalf of third-party claimants. A third-party claimant is someone other than the policyholder who makes a claim. One example is another driver whose car the insured damaged.

The definition depends on what the person does, not on a job title. Someone called an "appraiser" who does not meet these elements is not covered by the definition. Someone with a different title who does meet them is covered.

Worked example and changed fact

Rosa runs Rosa's Vehicle Damage Reviews. Insurers hire the business, and it charges a fee for each appraisal of damage to insured cars. It is a business, it charges a separate fee, and it appraises insured vehicle damage, so it fits the definition.

Now change one fact. Rosa looks at a neighbor's dented car one afternoon as a favor and charges nothing. There is no separate fee and no business practice, so this activity does not fit the definition.

The License Requirement

The basic rule

Under NRS 684B.020, no person may act as a motor vehicle physical damage appraiser for vehicle damage claims on behalf of an insurance company, or of a business organization engaged in adjusting or appraising motor vehicle claims, unless the person has done both of these:

1. secured a license from the Commissioner, Nevada's insurance regulator (see Nevada's Commissioner: authority, examinations and hearings), and
2. paid all applicable license fees.

Having one without the other is not enough.

Exemptions: who this section does not apply to

The license requirement in this section does not apply to:

• a licensed insurance adjuster. An adjuster is a separately licensed person who handles claims; see Who needs which Nevada insurance license?.
• an employee of any of the following:
• an authorized insurer, meaning an insurer authorized to do insurance business in Nevada (see Insurers: identity, domicile, authority and transactions);
• a motor club, an organization offering services to motorists;
• a motor vehicle dealer, a business that sells vehicles; or
• an automobile body repair shop.

Boundaries that change the answer

• A producer license is not on the list. A producer is a person licensed to sell insurance. Holding a producer license does not, by itself, make someone exempt from this appraiser license requirement.
• Employee is not the same as contractor. The exemption names employees. A person who works for an insurer under contract is not automatically an employee for this purpose.
• An exemption reaches only this section. Being exempt from NRS 684B.020 means this section's license requirement does not apply to the person. It does not excuse the person from other laws. For example, a licensed adjuster still needs that adjuster license.

Worked example and changed fact

Rosa's business, hired by insurers, must hold an appraiser license from the Commissioner and have paid the fees. None of the exemptions describes it.

Change one fact: Rosa takes a job as an employee of an authorized insurer and appraises claims for that employer. Rosa now fits the employee exemption, so this section's license requirement does not apply.

Checkpoint: Ken holds a Nevada producer license. Ken also runs a side business, for a separate fee, appraising damage to insured vehicles for an appraisal company. Ken is not an adjuster and is not an employee of any listed organization. Does the producer license exempt Ken?

The Bond, the Fine and a Historical Rule

The bond

A surety bond is a financial guarantee from a surety company, filed with the regulator on the licensee's behalf. Under NRS 684B.030:

• The applicant must file the bond with the Commissioner before the license is issued.
• The applicant must keep the bond in force for as long as the license is held.
• The bond must comply with NRS 679B.175.
• The bond must be in an amount determined by the Commissioner. The statute itself does not fix a dollar figure.
• A replacement bond must meet all the requirements for the initial bond.

The fine

An administrative fine is a money penalty imposed by the regulator. Under NRS 684B.020, a person who acts as an appraiser in Nevada without a license, and is not exempt, is subject to an administrative fine of not more than $1,000 for each violation. That figure is a maximum, not a set amount.

A historical qualification rule

The statute also provides that a person who was in business as a motor vehicle physical damage appraiser for 2 consecutive years immediately before January 1, 1972, is entitled to a license on application, without further qualification. Both conditions matter: the two years must be in a row, and they must end right before that date. Any two years of past experience do not qualify.

Checkpoint: An appraiser's bond is cancelled, and a replacement bond is filed. The replacement has a lower amount than the Commissioner required for the original. Does it satisfy NRS 684B.030?

Practice: Try These on Your Own

1. Insurer receives a statement of charges for satisfactorily completed repairs from a licensed body shop the insured had authorized. On day 29 after receipt, the insurer issues a check made out jointly to the insured and the shop. Is this a delay under NRS 686A.300?

2. Same facts, but the insurer issues a check on day 31 payable to the shop alone. Is this a delay?

3. A financed car (subject to a security interest) has a total repair charge of $300 on the statement of charges. No total loss has been declared. Must the car be repaired by a garage or licensed body shop under NRS 686A.300?

4. A car with no loan, whose legal and registered owner are the same person, has $4,000 of damage. The insured and insurer agree to settle without repair. Does NRS 686A.300 prohibit this?

5. Dana works on contract (not as an employee) for an authorized insurer, appraising vehicle damage as a business for a separate fee. Dana has no adjuster license. Is Dana exempt from NRS 684B.020?

6. Lee is an employee of a motor vehicle dealer and appraises vehicle damage for the dealer. Lee's job title is "Service Advisor." Does the license requirement in NRS 684B.020 apply to Lee?

What to Remember

• Payment timing: An insurer covering vehicle damage must issue a check or draft within 30 days after receiving the statement of charges for satisfactorily completed repairs from a garage or licensed body shop the insured authorized. Count from receipt of that statement, not from the accident or an estimate.
• Payee: The check goes to the shop alone or jointly to the insured and the shop, not to the insured alone.
• Required repair: If there is a security interest, or the legal owner differs from the registered owner, the vehicle must be repaired by a garage or licensed body shop, unless it is declared a total loss or the total charge is $300 or less. Otherwise, this section does not prohibit settling without repair.
• The statute sets timing and payee, not the amount. Policy terms determine what is owed.
• Appraiser: A person or business that, for a separate fee and as a business, appraises damage to insured vehicles or for third-party claimants. Job title alone does not decide this.
• License: Acting for an insurer or a claims-appraisal business requires a license from the Commissioner and paid fees. Exempt from this section: licensed adjusters, and employees of authorized insurers, motor clubs, dealers and body repair shops. A producer license is not an exemption, and a contractor is not automatically an employee.
• Bond: File it before the license is issued, keep it in force while licensed, in the amount the Commissioner determines. A replacement must meet all the initial requirements.
• Fine: Unlicensed, non-exempt appraising is subject to a fine of up to $1,000 per violation.

To keep practicing across topics, see Solve mixed cases and repair your weak spots.