EXECUTIVE DIRECTOR’S MESSAGE

Talk about a Backfire!

by CHARLES BRYANT

Can anyone imagine what it would be like if an insurance company were to process claims without sending an appraiser to a collision shop or to people’s homes to inspect a damaged vehicle when a claim is reported? Can anyone imagine the cost savings to an insurer by eliminating the process of sending either a staff appraiser or an independent appraiser out to inspect a damaged vehicle, record the damage and prepare an estimate, then negotiate an agreement on the cost of the repair with a collision shop that will perform the repairs? When considering such a system or the cost savings derived from eliminating the process of a staff appraiser physically going out to inspect a damaged vehicle to prepare an estimate, one would have to consider quite a few related costs, such as, a staff appraiser’s salary, their vehicle, gasoline, tolls, the camera - and I could go on and on, but I think you get the point. Eliminating the use of an independent appraiser would also result in a great amount of money saved. Well, that is exactly what happened recently: Insurance companies suddenly eliminated both staff appraisers and independent appraisers who would normally go out and inspect damaged vehicles, take pictures, prepare estimates and negotiate an agreement with collision shops on the cost of repair. This was all done on the premise that such changes would result in expediting the repair process and getting people back into their repaired vehicle much, much faster. Unfortunately, eliminating the appraiser, be it staff or independent, has actually had an opposite effect. Automotive collision and comprehensive claims are backed up in the collision shops and are actually taking three or four times longer - and sometimes more - to get to the process of determining the cost so that the collision shop can complete the repairs and get the customer back in their repaired automobile.

Based on actual calls to the hotline, insurance companies are preparing photo-based estimates for a fraction of the actual repair cost, which would’ve been determined correctly had a qualified appraiser been dispatched to inspect the damage, prepare an estimate and negotiate an agreement with the repair shop.

Again, this was all done on the premise that eliminating the appraiser and performing the inspection via photos would save time and expedite the repair process. Once again, I repeat, the elimination of the appraiser and the creation of preparing estimates based on photos has caused and continues to cause major delays in the repair process; it is costing consumers thousands of extra dollars in rental charges because of the process delays resulting from the photo estimating process.

On top of the delayed repairs, the use of photo estimating in lieu of a physical inspection sometimes impacts total losses; in some cases, it takes weeks to determine that the damaged vehicle should be considered a total loss! In turn, this can result in storage charges reaching into the thousands of dollars. This shift from personal inspection to the photo estimating process came about all of a sudden. Insurers obviously failed to consider the impact it might have on the claim settlement process - or intentionally ignored the effect this process might have on consumers who are paying dearly for auto insurance and are at the mercy of their insurance provider when their vehicle is damaged by another driver. The question is:

What are we going to do about it?

I would be the first to admit that eliminating the physical inspection of the vehicle and replacing it with photo estimating would be a fabulous step in the right direction IF that process worked the way everyone seemed to think that it would, in reality, we’re not at the point where artificial intelligence has been developed enough to take over the process of appraisers physically inspecting the vehicle and preparing a damage estimate. Maybe photo estimating will work sometime in the future, but that time is NOT now! Period. So, what are we going to do about it now? I would welcome any suggestions from AASP/NJ members (or anyone for that matter) who might have a suggestion or would like to discuss this major issue that the collision industry and consumers are now faced with. I can be reached on the AASP/NJ hotline at (732) 922-8909.