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Blindsided: Blind Claim Audits

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Blind dates are a whole lot more fun – at least you get to meet the other party,” says a California shop owner about blind claims audits.

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Not familiar with the term “blind claim audit”? How about “desk review”?

A thorn by any other name still hurts just as badly – and, in this case, the thorn is in the side of collision repairers.

So just what is a blind claims audit?

Says one Connecticut shop manager: “It’s when someone tries to adjust your estimate without looking at the vehicle. They call and tell you they’ve run your estimate through their system and, amazingly, it has come out to be half of what you wrote. Ace Review is one company that does this. They promise insurers that they can reduce their claims costs.”

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And, if you don’t know how to deal with these auditors, they’ll make good on that promise. Besides the realized savings of auditors cutting estimates by 10 percent or more, insurance companies also benefit by these auditors assuming the traditional role of the insurance adjuster, allowing insurers to decrease the size of their claims department.

What’s frustrating for repairers is that, in some cases, the insurer has already sent someone to the shop to examine the vehicle and has secured an agreed price with the shop for the repairs.

Even more frustrating is that, as Charlie Barone writes in his cover story on pg. 58, repairers “are no longer reviewing the cost of repairs with an insurance professional who’s working within state regulations. … Regulations often forbid writing estimates based on telephone calls or photos, which would seem to outlaw blind claims audits.”

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The legality of these audits, however, isn’t quite so black and white, due to the gray cloud of smoke and mirrors surrounding the issue. Ask someone from one of these auditing companies about how they get around the laws, and you just might get an answer similar to what Barone got: Technically, these firms don’t adjust the loss. The inside insurance adjuster does.

Darn technicalities. But what’s good for the goose …

Keep in mind that technically (and legally), you’re not obligated to renegotiate with these auditors, a fact that Barone examines in his article and a fact that many shop owners are already using to their benefit.

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“My position is to not negotiate with these companies,” says a Montana shop owner. “I simply tell them that it’s our shop policy not to deal with third-party auditing services. I then call the vehicle owner and explain to him that he’s not obligated to accept any of the terms set forth by these firms because his policy doesn’t say anything about having to deal with outside services. My call also gives the owner a heads up about what’s going on so the insurance company doesn’t steer him to a more accommodating shop.”

Says an Ohio shop owner: “I got fed up and just started saying no. After that, I contact my customer and tell him that someone who hasn’t even seen his car wants to cut my estimate. This upsets him enough to contact his agent. End of story.”

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“I tell these reviewers to either accept my sheet as written or send out a staff appraiser to evaluate the vehicle,” says a Pennsylvania shop owner, adding that if shop owners “allow themselves to be taken in by these audits, the practice will become more
common.”

“From the insurance companies standpoint, it’s worth a shot to hire these auditors,” says a Delaware shop owner. “But if shops simply stop negotiating with these reviewers, they won’t have any work to do and we won’t have to deal with them anymore – because they’ll no longer be around.”

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Georgina K. Carson, Editor
[email protected]

Blind claims auditor (noun) A person contracted or employed by an insurance company who calls and attempts to renegotiate the bid for repair work without having seen the damaged vehicle. Synonyms: desk reviewer, estimate scrubber, estimate strainer. See also “annoying” and “resented.”

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