In response your question, Tom, I have this to say this: This is a trend that’s here to stay, so be prepared to see more of these novices coming into your shop. The sad thing is that the leading insurers are establishing this trend and having success with it, so other competing insurers are sure to copy it.
These wet-behind-the-ears damage appraisers are looked at as clueless by industry veterans with training and experience, and their average sheets are substantially lower than those of the older, more experienced veterans with more technical knowledge. What’s more, their salaries are as low as their estimates, which makes the deal that much sweeter for the insurance companies.
Knowledge? What Knowledge?
The typical career path of an insurance adjuster used to be one that routed a man though the body shops’ floors and offices. Many collision repair industry employees would get tired of fighting the fight every day and join the opposition for the benefits, long-term security and better working conditions. Today, however, a lot of insurance companies are growing their own, so to speak. And in that process, emphasizing a thorough understanding of the ins and outs of the collision repair process is not necessarily part of the program.
The model that insurers are copying comes from the company whose remarkable growth in terms of market share has leapfrogged them over their competitors. Yes, the company whose estimators are out driving white SUVs – Progressive. The typical resume of one of its front-line claims people often features a stint at the desks of one of the leading replacement rental car providers, a vocation that doesn’t require knowledge of collision repair, sectioning guidelines or structural damage analysis.
A classic example of how this works can be found in the case of Greg Coccaro and North State Custom in New York. For those who haven’t been following the case, a Progressive insured took her Mercedes to Coccaro’s shop for repairs. The appraiser for the woman’s insurance company wrote approximately $6,000 for the repair, but the final bill came to over $34,000.
This is a perfect example of what’s happening in the claims business. Insurance companies don’t care if their front-line people are experienced, trained or even have the slightest clue about what it takes to properly repair a collision-damaged car. They’re all about the money and, to some extent, customer service. But I’m sorry to report that customer service is measured not by the level of collision repair knowledge their claims people have but instead is based on things like response time and appearance. At least for some companies, those attributes are what pass for professionalism in the insurance claims world.
I contacted Progressive for its position on this issue. Not surprisingly, the company declined to comment on the matter. Nevertheless, it’s clearly the worst offender with respect to having novices out on the street. To understand what makes them tick, I visited their Web site for more information. It says the following:
At Progressive, we take our core values seriously, and we implement them in everything we do. Here, you’ll find a culture that embraces risk taking, innovation and diversity – and one that rewards you for being a part of the team.
The site goes on to say, “As part of our claims team, you’ll receive some of the most intensive training in the industry and be provided with state-of-the-art technology to respond and settle claims quickly.”
While I get the part about settling claims quickly, one is left wondering about the “most intensive training in the industry” part. I would suspect their people are indoctrinated with a more-than-healthy dose of skepticism with respect to body shop people and their opinions (read: estimates).
A Guess At Best
I called Tony Lombardozzi, president of the Coalition for Collision Repair Excellence (CCRE), to ask what he thought about the poor skill sets of insurance appraisers. His response was, “Who cares?”
“First of all, insurance companies do not repair cars. They’re not in the repair business. So their estimates serve no purpose in the repair of the automobile,” Lombardozzi said. “It’s only a guess, so who cares if Nick – the new kid who sold shoes last week – knows how to put an estimate together?”
Recently, a woman from State Farm came into Lombardozzi’s shop and, after spending two hours there, admitted to him that she was merely a trainee and was somewhat lost in the process. In fact, she didn’t even know what the fan shroud was on the car she was estimating. What this shows is, for one, the practice is catching on, and two, even the industry leader is taking its cues from downstream in the market.
More Coming
As our economic meltdown deepens and consumers’ disposable cash is reduced even more, we can expect to see the rate of underwritten claims increase as people cash out of auto claims. Once the short sheets are no longer subject to the scrutiny of a qualified collision repair professional, they’ll flourish like ants at a picnic.
This is body shops’ cue to take control over the repair process and to embrace their role in the billing process. It’s a matter of common sense, as well as the survival of your businesses. A
Writer Charlie Barone has been working in and around the body shop business for the past 35 years, having owned and managed several collision repair shops. He’s an ASE Master Certified technician and a licensed damage appraiser, and has been writing technical, management and opinion pieces since 1993. Barone can be reached via e-mail at [email protected].
