12/18/2014

Write Your Own

How training empowers adjusters to conduct estimates on specialty auto claims.

By Bob Crowley , David C. McNutt

At 116 years old, car insurance has been around the block a few times. Standard auto claims estimating, processing, and settling has become just that—standard. Insurers have streamlined these processes with drive-in claims centers and stables of preferred repair shops.

But not all claims processes can be standardized with good results. Settling specialty automotive claims—e.g., those involving motorcycles, classic cars, and recreational vehicles (RVs)—can require a different process every time. In these cases, highly trained and knowledgeable adjusters make the claims process easier for customers and carriers, particularly when they are trained to approach a claim by writing their own estimates.

Alongside hands-on training, writing their own estimates gives adjusters the knowledge to work confidently with repair shops and avoid endless negotiations. Knowledgeable adjusters who respond quickly enough to write an estimate first can provide better outcomes for customers while building rapport with repair shops and ensuring carriers are paying out no more than necessary.

Fostering Proactive Work and Accurate Estimates

When adjusters are not properly trained to write their own estimates, they work reactively rather than proactively. From the get-go, the adjuster has relinquished control of a claim and may be fostering confusion. Clear communication between the shop and adjuster helps to prevent problems such as presenting the customer with two different estimates: one from the shop and one from the adjuster. When this happens, insureds are dragged into a negotiation process that they should never have to witness.

This also creates ample opportunity for an inaccurate estimate. We call these “specialty lines” for a reason; the coverage is often unique, which may impact the type of items that should be included in the estimate. For example, classic or collectible vehicles often have numerous alterations such as a special exterior paint job. To repair this type of vehicle properly requires unique handling and a shop that is experienced with custom painting. Having knowledgeable adjusters who recognize this on the front end and providing insurance coverage that is designed to provide payment for alterations will ensure that vehicles are repaired correctly the first time and to everyone’s satisfaction.

When a repair shop writes an estimate first, it usually functions from a poor understanding of everything that should be paid for in the loss. This leads to more opportunities for reopened claims and squabbles with shops, which, in turn, may make it difficult for the insured to get vehicle repairs completed, leading to customer dissatisfaction.

Essentially, parties involved in a claim must have the appropriate room to apply their expertise judiciously. The claims adjuster is the expert in making sure customers get the right indemnity payments, and the shop is the expert in repairing damaged vehicles. With properly trained adjusters, you will have careful application of an appropriate process. Both parties must work together to follow the best process for providing a positive customer service experience and getting the damaged vehicle back into working order.

Good Estimates Are Built on Deep Product Knowledge

Before gaining field experience, adjusters acquire experience and expertise through training. Well-trained adjusters write better estimates, which, in turn, provide a stable foundation for the claims process and allows it to move smoothly.

While new adjusters must learn to write estimates, nothing imparts authority in that process like ongoing, hands-on claims training—for example, a motorcycle claims training program that involves a complete rebuild of a bike where adjusters-in-training tear down a motorcycle—every last bolt—and put it back together. They are tested on their knowledge of motorcycle parts both before and after the rebuild. By the end of a week-long training session of this type, the participants’ knowledge about parts replacement will improve dramatically.

Parts knowledge is important for motorcycle and classic cars because many claims involve parts replacement. Adjusters also must understand operations, the process involved in replacing a part or making a repair. For example, a claims adjuster must know that replacing a fender includes removing lamps or other parts that are attached to the fender. An unskilled adjuster may pay twice on this type of claim.

Once a parts and process knowledge is established, adjusters then can be taught to itemize and separate labor from materials in estimates, which helps produce accurate indemnity payments. But they must know how to identify parts and understand processes before this is possible.

Familiarity with a product leads to confidence, which leads to more positive interactions with shops. Through training, adjusters are grounded in the knowledge of their product line and can help expedite claims as quickly as possible. They are well equipped to gather facts and information, which allows them to write an accurate estimate.

Everyone Wins When Adjusters Lead Estimates

So what does it look like when a knowledgeable adjuster leads the estimating process? For one, you see increased customer and carrier satisfaction. Estimates written by adjusters produce fewer surprises and fewer reopens, which means customers can move on with their lives. Plus, it positions the carrier to be proactive in delegating its resources to the claim for more efficient claims handling.

At the same time, claims are closed faster. Most policyholders do not have repair shops provide estimates at the time of the loss. With knowledgeable adjusters, accurate estimates can be quickly agreed upon by the repair shop and carrier, leading to a faster indemnity payment to the insured. This is true whether the claim is handled over the telephone with a shop estimate or in person. But when you have adjusters completing the inspection in person, it reduces the back and forth of phone calls and both parties can reach agreement on the scope of damages together. If the repair shop has a significant change, the policyholder already has most of an indemnity payment, which makes supplements easier.

Adjusters with the proper training have the knowledge to instill trust in shops and customers. But holding deep product knowledge particularly helps adjusters strengthen their relationships with shops. Shops respect adjusters who know and understand the products with which they work, and they can feel confident that the claim will be settled fairly.

A knowledgeable adjuster can build a good rapport with a shop and easily come to an agreement on scope and damage and, ultimately, finalize the estimate expediently. If an adjuster’s model is to actually go to a shop and finalize estimates, the shop begins to trust the adjuster to write his own estimates. This saves the shop from using its resources on an estimate and results in a fair payment. Plus, this positive working relationship helps to eliminate instances of fraud. Knowledgeable adjusters can recognize fraud and may be less likely to have occasion to do so, as a dishonest shop probably will not try to slip something by someone who knows the product.

Though we have been talking about the importance of adjusters leading claims, all this knowledge and confidence allows adjusters to determine when they do not need to show up in person to write their own estimates. After all, there are multiple ways to write an estimate. It can be done effectively over the telephone or Web by well-trained adjusters working from photos. If the process is speedier when there is already an estimate from a shop in hand, an experienced adjuster can execute it accurately and quickly.

What is most important in specialty claims is paying what’s fair, keeping customers out of the negotiation phase, and writing an accurate estimate. No matter the scenario, well-trained adjusters will know how to pick the right process to get this done. This means that they are not at the mercy of repair shops. Instead, they design claims processes that settle claims quickly and with a payment that the insured, carrier, and repair shop can all agree is fair.  



Bob Crowley is vice president of claims for Specialty Insurance Services Corporation, a claims management and training subsidiary of American Modern Insurance Group. He has been a CLM Fellow since 2014 and can be reached at BCrowley@amig.com, (800) 375-2075 ext. 5482, amig.com.

David C. McNutt is senior vice president of claims at Specialty Insurance Services Corporation, a claims management and training subsidiary of American Modern Insurance Group. He has been a CLM Fellow since 2014 and can be reached at (513) 947-5390 or dmcnutt@amig.com; www.siservices.com.

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