Representatives from four major insurance companies weighed in on scanning, automakers’ influence on consumers’ choice of shops, and referring drivers to OEM-certified shops at the sixth annual MSO Symposium.
The half-day symposium was held in July during NACE Automechanika in Chicago. The event was open not only to multi-shop operators (MSOs), but also to larger single-location shops (those with annual sales in excess of $3 million).
Panel moderator Marcie Tieger of Symphony Advisors asked the insurers if they anticipate issuing a formal position on vehicle scanning. Sandee Lindorfer, auto line management director for Allstate, said her company is working on such a statement, though she did not provide a timeline for it.
“We evaluate each claim on a case-by-case basis. That has always been how we’ve approached claims settlements,” Lindorfer said. “We continue to look at pre-and post-scanning and continue to learn. We leverage all our partners here, as well as Tech-Cor, to give us feedback. And we engage with OEMs to better understand their position statements.”
Lindorfer said Allstate would like shops that conduct scans on vehicles that are part of Allstate claims to include that scan information with the claim file.
Russ Hoffbauer, property and casualty claims director for State Farm, also said scanning continues to be “a learning process,” and that the company makes its decisions on payment for scanning on a “case-by-case” basis relative to the “nature of the damage and what technology the vehicle has.”
“From our perspective, we’re kind of in the same place, just gathering more information,” said Chris Andreoli, corporate physical damage process director for Progressive’s network repairs.
How do they view OEM position statements and repair procedures in general?
“We don’t consider them gospel,” Hoffbauer said. “A lot of them are pretty vague.”
He said there are some position statements “we basically disagree with” and “have our own philosophy on,” such as OEM prohibitions on use of non-OEM parts or the repair of wheels.
“We try to study things. We try to talk to the OEMs [to get more information or specificity],” Hoffbauer said. “We have these ongoing conversations.”
“We’re aligned with Russ: It’s not gospel for us, too,” Lindorfer said. “I agree [that] sometimes they just don’t make sense. So we try to work with the OEMs when we come across those to see if we could do something to help communicate with them and elevate that particular situation that may just not seem to make sense to us, or even to repairers. Some statements make a lot of sense, and others we question and try to collaborate with the OEMs.”
As the automakers move toward using vehicle telematics to automatically be notified of collisions, are the insurers concerned about the potential influence automakers may have on getting drivers to OEM-certified shops rather than an insurers’ direct repair shop?
“First, I don't think it’s mutually exclusive because a lot of shops that are on our Select Service program are certified,” Hoffbauer pointed out. “I do think the OEMs have the technology advantage right now, having the technology in their automobiles. So we’re definitely working with them, talking to them, and trying to determine how this is going to work in the future and the steps that we all should take.”
He said it basically should come down to everyone involved---automakers, insurers and even shops--- letting customers know “where their car can be fixed [correctly].”
Andreoli, like all the insurers on the panel, noted that customer shop choice is a key philosophy at his company. He said one of the “cycle time” measurements his company tracks is the length of time between the accident and getting the vehicle to the shop, so if vehicle telematics helps “compress that timeframe,” that is a good thing.
Kyle Thompson, assistant vice president of claims for USAA, agreed that his company wants to work with automakers to “align our direct repair networks with the offerings that they would [provide] at the time of loss,” and get that “immediate notification that a vehicle has been damaged” in order to quickly start helping the driver. Without that currently, he said, there are delays in loss reporting, and vehicles may get towed multiple times prior to repairs.
“If we could collaborate with stakeholders to help that process happen seamlessly for the customer, [and] make that notice immediately so we can be there to help them as quickly as possible, that [would be] a real win for all the stakeholders,” Lindorfer agreed.
Tieger asked the panelists if a direct repair shop turns away an assignment, saying it is not equipped or trained to fix that particular vehicle, whether it would be viewed by the insurer “as not up to date” and thus jeopardize its status in the program.
“It’s actually quite the opposite. You shouldn’t look down on that. It points to strength in the relationship,” Andreoli said.
He said if it was happening frequently, his company might talk to that shop about getting OEM-certified to fix those vehicles, but he said he recognizes that that can be “an expensive proposition.”
“[If] someone is [saying the vehicle] really needs to go somewhere else, I’d be extremely disappointed if somebody in our organization looked down on that shop,” he said. “I think with tooling and training and everything else, the days when everybody can repair everything are getting further and further from the truth.”
So are the insurers set up to identify OEM-certified shops on their networks?
Hoffbauer said that’s not happening currently, but is something State Farm is studying.
“We do have conversations with the insured, and if they ask, we can recommend or try to provide advice, but we believe in customer choice, and they can go wherever they’d like to,” he said. “But we would prefer they make an informed decision based on facts.”
Similarly, Thompson said “capabilities-based assignments” are in the works at USAA.
“It does me no good at all to send a vehicle to a shop that isn’t properly equipped to handle the repair,” he said. “It just creates delays in the overall process, which isn’t good for the member.”
Lindorfer said Allstate has information available if a direct repair shop works on a particular type of vehicle, such as the aluminum Ford F-150, but the company’s systems will need to evolve before they can match that up with the customer’s vehicle at the first notice of loss.
“But our adjusters do try to tell them when they are writing the estimate that if they have a vehicle that needs a special type of repair, they need to inquire with their shop to ensure that they are able to repair that type of vehicle,” she said.
John Yoswick, a freelance writer based in Portland, OR, has been writing about the automotive industry since 1988, and is also the editor of the weekly CRASH Network (for a free 4-week trial subscription, visit CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.