Thursday, 23 August 2012 22:13

Sale of Estimate Data Isn’t New and Shops Don’t Own That Data

Written by insurance insider

Have you sold your soul to the devil? I’m here to tell you that if you have a computerized estimating system, and you electronically communicate with an insurance company, you have.

You signed away your rights when you executed the contract to pay the information providers a monthly subscription fee.

 

What does that mean to your business? Estimating data generated by your shop for a direct repair program and electronically sent to that insurance carrier is now useable by the information provider.  Of course it’s an instant revenue stream for that company as well. Every day thousands of new estimates are added to their extensive data library.

Think this is shocking? How could they do this? Is this legal? News flash: This has been going on for more than 20 years. The collision repair industry, now worrying about data mining and privacy, is just a little slow getting to the party. But welcome to the party. You are the guests of honor. Just sign on the dotted line.

Former U.S. President Franklin Delano Roosevelt famously stated, “The only thing we have to fear is fear itself.” He wanted to spur optimism in the American public. So: What do you fear?

I actually think Roosevelt was right and it’s fear itself. Most shops aren’t worried about the information providers selling confidential information such as their customer’s name, address or phone number. Most reputable vendors have contractual language stating that that’s protected information. Aside from that, in today’s litigious society, people are always seeking opportunities to sue and cash in. It’s just not worth taking the risk.

So what is being sold? The estimating data itself. Why? It’s data that insurance companies rely upon to make decisions, identify trends, manage their business and in some instances, establish market guidelines. This data is critical to managing the insurance business and has significant monetary value.

So, you may ask, if the information providers are making money on estimate data from my shop, why isn’t someone paying me? It’s a reasonable question.

Personally, I think if shops were paid for the use of the data, the persistent question of “Who owns the data?” would disappear. The fear would be reduced to squabbling over the table scraps the information providers left behind.

Remember Cuba Gooding Jr. repeatedly shouting, “Show me the money” in the movie Jerry Maguire? So, to our esteemed information providers reading this article: Show the shops the money and you will quickly hear “Where do I sign?”

Given that this practice has been going on for over two decades, why hasn’t it been established who owns the data? I’ve read many articles on the subject, none of which answers the question. Unfortunately, I won’t be able to provide an answer either. Until there is a precedent set with case law on this matter, it will be a subject to debate.

I am, however, going to venture a guess and tell you that you don’t own the data, and to think otherwise is delusional. You wrote an estimate on behalf of the insurance company. Here’s what you do own on that estimate.At the top of the estimate is the name of your business. You legally own the rights to the name of your company. That’s it.

Does the estimate data belong to the vehicle owner? Absolutely not. The vehicle owner owns the right to their confidential information on the estimate (insurance policy number, address and phone number). Shops should be protecting the customer’s data (and themselves) by having an agreement in place with their vendors to ensure data is not shared without their written consent.

Does the information provider own the estimating data? In a word, ‘no.’ They don’t own anything other than the rights to aggregate the data contained in the estimate specific to the actual repair of the vehicle. That’s data that you signed over to the devil when you signed your agreement with that company.

Does the insurance company own it? In my not-so-humble view, ‘yes’ we do. Out of all the potential parties, the carrier is the most logical owner. By virtue of our direct repair program contracts, we have an agreement with a vendor (body shop) to produce an estimate to repair the vehicle. You agreed to participate in the direct repair program. You agreed to create an estimate and upload it. In return, you are referred to our policyholders as an option. We directly or indirectly paid for the service.

In other words, we own it.

 

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