Tuesday, May 28, 2013

Cheap Auto Insurance Continued, The Claim Game

     Thank you for calling Wreck Repair Report's claim center hotline, for Spanish oprima el numero uno.  For those of you who have had to suffer through the automobile claims reporting process, I feel your pain.  With everything that is thrown at us in a given day, things like work, school, offspring, sleep, overly involved neighbors, most of us do not have the luxury of scheduling an unplanned car accident into our calendars.  Whether your unfortunate incident results from a distracted text happy tween. Or perhaps a disgruntled shopper wielding a sharp key in the parking lot, chances are, submitting an auto insurance claim is an unwelcome addition to your daily schedule.  It is fair to say that most people do not anxiously await the day when they finally get their chance to submit an auto insurance claim.  That being said, let me enlighten you with how your hard earned cash is translated to service from a claims process perspective.
      Just like many other things in life, with auto insurance, you get what you pay for.  Think about it this way, let's say you need a new hose for your backyard, so you go to a hardware store to get one.  Once there, you discover that there are over twenty choices to choose from, ranging from $12.00 to $85.00.  Being that you are not likely a garden hose expert, you choose a hose for $15.00, and head home.  After hooking up your new hose to the faucet and turning on the water, it begins to flow as expected.  However, there is a small leak at the connection point, the hose kinks itself easier than you would prefer, and attaching various watering nozzles requires a decent amount of time, energy, and frustration. Depending on what type of person you are, you either deal with the added inconvenience and keep the hose, you exchange it for the same hose as yours seems defective, or you return it and buy a hose four times the price of much higher quality.
claims insurance automobile representative
      You know what they say, hindsight is 20/20. Learning this lesson with a new garden hose doesn't set you back much, other than wasted time and gas.  Shopping for and choosing an auto insurance carrier is quite similar to the hose situation described earlier. However, there is much more at stake should you have to learn the lesson the hard way, to include time and money spent, procedures you must perform, and how much you are valued as an insured customer.  Again, it all depends on what type of person you are, and what type of value you place on quality, performance, and customer appreciation.  I don't want you to learn your lesson the hard way, so let me help you avoid the hindsight headache, by helping you develop foresight based upon your personal preferences.

 Involved Customers Who Expect High Levels of Service & Appreciation

     If you are this type of customer, you most likely expect and demand the highest quality services and products, that assure you of the value of your investment.  Furthermore, you most likely expect a certain amount of respect and appreciation as a customer, where your desires and preferences are accounted for, and held in high esteem by your insurance carrier.  Any amount of involvement desired throughout a vehicle related incident, and subsequent claims processes, is welcomed and encouraged. If you find yourself in this customer category, there are a few things you should keep in mind.  As my experience involves higher end vehicles with high book values, most of the customers I interact with fall within this category.  Regardless of whether you own a Honda or a Bentley, you owe it to yourself to do what you can to protect the value of your investment.
     Before pulling the trigger and purchasing an auto insurance policy, there are some questions you should ask first, whether through consumer reviews or an actual insurance agent.  Questions such as: ---  -What Direct Repair Facilities do you use? 
-Are any of these repair facilities recommended, authorized, or certified by the dealers of my vehicle?
-Are only factory OEM parts used, or what is your policy for aftermarket/reconditioned parts?
-Are there adjusters that you employ locally, and what is the procedure for vehicle inspection?
-What is my expected wait time to schedule an inspection with an adjuster?
-How are claims submitted, with a live person over the phone, or electronically via the internet?
-Will my opinions and concerns be accounted for during the repair process?
-How often is betterment applied during vehicle repairs?

     I am sure that some, if not all, of the insurance jargon used in these questions may be unfamiliar to you. So let me break it down for you.

Direct Repair Facilities (DRPs)

     First and foremost, there is something that you must understand about these facilities.  Regardless of the catchy name that is used by a given insurance company (Pro-Shop, Preferred Shop, Shop of Excellence, Etc.), these shops are more often than not a classic bait and switch.  As you may have gleaned from some of my other posts, auto insurance companies are more concerned with price than they are with quality.  This is the general rule, it is not the exception.  The contractual agreement that is signified by most DRPs and an insurance carrier involves a given repair shop accepting lower hourly and supply rates, in exchange for the insurance company to funnel them more work.  In addition, these facilities agree to more frequent inclusion of aftermarket and reconditioned parts, as well as lowered repair and refinish times.  In other words, these facilities have a contract to advocate for a contracted insurance company, instead of advocating for their customers.  They often repair parts and panels that should be replaced, they spot paint and open panel blend, and ultimately agree to use replacement parts that are of a lower quality and standard than original manufacturer parts.  DRPs are set up to minimize the bottom line of their contracted insurance carrier, they are not set up to protect the value of your automobile investment.  The exception to this rule is found within automobile insurers that typically insure higher end vehicles, collectibles, and antiques. As these insurance companies charge higher premiums, as the value of the automobiles they insure depends upon a flawless and indistinguishable repair.  I cannot tell you how many times we have been asked to rectify the mistakes of these facilities, often requiring more time and expense than was incurred from the original damage.  

Dealer Recommends & Repair Guarantees

      You should view your car as an investment.  While automobiles depreciate more than other investments, it is always wise to bolster the value of your vehicle by ensuring a proper repair.  While it may seem inconvenient, it is definitely worth the time to call local dealerships to see who comes highly recommended.  Many insurance carriers use the promise of a guarantee to steer you toward their DRPs.  However, any reputable auto body repair facility should have guarantees to match, if not exceed those promised if you only go to Pro-Shop A or B.  In fact, any reputable facility should always have their customers' best interests in the forefront of their minds.  After all, it only makes sense that they should be working for you right?  REGARDLESS OF WHAT IS SAID TO YOU BY ANY INSURANCE COMPANY, YOU ULTIMATELY HAVE THE RIGHT TO HAVE YOUR VEHICLE REPAIRED AT A SHOP OF YOUR CHOOSING.  WHILE THEY MAY ATTEMPT TO STEER YOU TO A DRP, THEY CANNOT FORCE YOU TO TAKE YOUR CAR THERE.  THIS PRACTICE IS IN ALL WAYS ILLEGAL, AND HAS BEEN SO FOR NEARLY A DECADE.

Adjusters & Claim Submission

      Regardless of what type of customer you consider yourself to be, pay attention to this section, as it applies to everyone.  There are a wide variety of processes applied by automobile insurance carriers when it comes to damage adjusters and claim submission.  For instance, many companies employ their own damage appraisal adjusters (State Farm, Farmers, Progressive, Geico, American Family Ins, Allied/Nationwide, Etc.). Whether they set up an appointment to meet you at home or work, direct you to a drive in facility to meet an adjuster, or schedule an inspection once your car has been dropped off for repairs.  These adjusters work directly for a given auto insurance carrier and are subject to a supervisor, who then in turn has a supervisor.  These adjusters often have their hands tied, as they can literally be scolded and punished for not writing best case scenario estimates of damage.  However, they are often the ones with whom you make direct contact, and are quite responsive to customer requests and demands.  Also, many auto insurance carriers have greatly cut down their number of company adjusters, meaning that they are overworked, overbooked, and have less time for initial inspections and re-inspections.  If you prefer heavy involvement throughout the entire process, these adjusters serve as a company representative, and will be quite open to your calls and questions.
      Companies that are not local, or are often smaller in scale, will employ Independant Damage Adjusters (IAs) to appraise the damage to your vehicle.  These adjusters are not direct employees or representatives of a given insurance company, but are rather contracted employees.  They are subject to many of the same rules and expectations of company adjusters, however, they have a certain degree of latitude in their decision making.  While IAs will often write similar initial estimates as company adjusters, they can be more flexible, as they cannot ultimately be fired.  At the very worst, they may not be used as a contracted employee as often.  That being said, they are often quite busy, take a longer time to issue payment, and can be considerably more difficult to contact.  If you prefer less in person involvement, but still like the idea of possible contact, this is something to keep in mind.
      The last category of damage adjusters and claims submission processes, is the electronically oriented auto insurance carriers.  Let it be known, that over the last two years, I personally have seen a huge movement towards these types of systems across the industry.  Some auto insurance companies that have typically focused upon these types of processes will sound familiar to you (Esurance, Ameriprise, and Mutual of Enumclaw for example).  Auto insurance carriers relying upon the electronic claims submission often communicate via email, require extensive photo and invoice documentation, and do not require as much use of in-person adjusters.  These auto insurance companies will either use a third party system for claims and document upload, or will have a system in house.  For those of you who are more electronically savvy, or prefer to communicate electronically, these insurance companies may be more your style.  There is very little to no in person involvement, and most if not all correspondence is done from your computer, smartphone, or tablet.  It would be wise to ask your prospective repair facility whether or not they are electronically literate, because some of these systems require more than a basic understanding of computer processes.  As an aside, just last week I spoke to a third party claims processing representative, that said that most auto insurance companies are beginning to move toward this 21st century option.

How Can Betterment Be a Bad Thing for Customers???

      Really though, how can a work that has better in it be a bad thing for me as a customer?? If you are asking this question, then you've fallen for another bait and switch, sorry.  Whether intended or not, betterment does not represent the "bettering" of a customer because auto insurance carriers just care so much.  Sorry to break your heart, but betterment is actually quite the opposite.  Betterment basically stands for the amount (usually given in percentage) that will be charged directly to the insured or claimant for a given replacement part.  For instance, an adjuster may decide that your damaged tire was so used up, that they will expect you the customer to pay anywhere from 15%-50% of the cost of the replacement part.  Whether you are the insured, or the claimant, you are expected to split the cost with the insurance company.  Even if the accident was not your fault.  This may not be a big deal on your scuffed Geo Metro Rim.  However, if you drive a newer Porsche 911, your cost could be $1400.00 on just one wheel alone.  So you would be quite wise to ask a prospective auto insurance carrier what their policies on betterment are, because with you deductible these can quickly add up.  From my personal experience in the industry, it is unfortunately the larger insurance companies charging higher betterment percentages (Farmers, Progressive, Geico, Midcentury,  Etc.). I apologize if this article was too long for your taste, but you have got to remember, I am only trying to help you look out for yourself.  Happy hunting.