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Drop the Gun and Step Away from the Adjuster

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Believe it or not, there are seasoned appraisers in the industry who aren’t the enemy — and who aren’t happy with insurers’ penny-pinching policies that disregard quality and fair profit


In my September Editor’s Notes, I wrote about an appraiser named Pat, who has some interesting views regarding the industry. You see, Pat is on the side of shop owners.

"Yea, right," some of you are probably saying. "This Pat is probably no different than the rest of ’em — in cohoots with the insurance companies to cheat me out of every stinkin’ penny."

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Wrong. Pat would like to see shop owners and appraisers work together to bring some relief to the industry. The question is, are you open minded enough to listen? — GK

 

As Georgina so kindly indicated in her September Editor’s Notes, I’m an appraiser for a major insurance company — and have been for quite a few years.

I know you’re apprehensive. I do hope Georgina has put your minds somewhat at ease, but I expect there are those die-hards out there who’d never believe an appraiser or adjuster could be "on their side." I also understand that you have good reason.

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Please allow me to clarify …

If you’re the type of shop owner who decides not to R&I the moldings or straightens the quarter panel the appraiser hesitantly allowed to replace, I am not on your side. It’s those kinds of things that prevent forward movement in the industry and perpetuate the status quo. On the other hand, if you’re the type of shop owner who’s looking for a fair figure to repair cars properly, I am, most certainly, "on your side." That should be the common goal of the shop and the insurance company, and that’s what I try to accomplish in writing a damage appraisal. (And yes, that means all procedures needed, including car cover, wet sand and buff, color tint, blend, etc.)

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Unfortunately, the current trends don’t favor this approach. Corporate America — in this case, the insurance companies — is focusing on cost reduction and increased net profit, which means several things as it relates to insurance claims operations:

Reducing cost per claim — While shop owners and managers are shaking their heads and saying, "Why don’t the insurance companies just write a little fairer? I only need another 3 or 4 percent to make it, and that’s peanuts to those huge companies," insurance execs are looking to squeeze a 1 percent across-the-board reduction in their total cost per claims. Think of it this way, if an insurance company pays out an average of $800 million a year in claims nationwide, a 1 percent reduction means $8 million. And you’re waiting for them to give up three or four times that — $24 to $36 million. Not in our lifetimes!

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Staffing levels: Get more from those who know less — Increasing productivity while decreasing overhead is the name of the game. And the objective seems to be to get more for less from their claims personnel. Familiar concept?

Another is the staff itself. As we all can probably agree, the current trend is moving away from seasoned, experienced appraisers. With entry-level appraisers, insurance companies not only reduce salary, but put people in the field who know just what the company has taught them — and they write estimates just the way the company trained them to.

The combination of these elements puts the "veteran" appraisers in a difficult position. We’re accustomed to having quite a bit of latitude in putting our expertise and experience to good use when adjusting claims — the objective being to arrive at a fair figure. This has dwindled with cost-reduction initiatives and company guidelines.

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It can be incredibly frustrating. As a general rule, we came to work in this capacity because of our technical knowledge and expertise in the repair industry. We strive to maintain that level, but it seems the company would prefer mindless robots programmed with the latest company guidelines (insurance "ditto" heads?).

Quite a while ago, we recognized labor-rate increases weren’t keeping pace and that operating a collision repair business involved more and more investment in equipment, training and overhead. So we did the "funny times" thing to compensate. (I hope we all agree that funny times have outlived their usefulness. Now they call it fraud.) Funny times did what we intended for them to do but, at the same time, we perpetuated the problems rather than addressing them. We all bear some blame in having gotten us into this mess, which brings us to the current question: How do we get ourselves out of it?

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Writer Pat has worked in the autobody repair industry for more than 20 years, holding positions ranging from tech to manager. Pat is now a senior appraiser for a major insurance company.

*Name has been changed to protect Pat from retribution.

What Can be Done?
Do you have any suggestions for working together to solve the industry’s problems with insurance companies? If so, get those ideas to Georgina Kajganic by fax (330-670-0874) or e-mail ([email protected]), and she’ll forward them to Pat. Pat may use your suggestions in an upcoming article. Note: Please include your name, title, shop name, phone number and e-mail address (if applicable) so Pat can reach you!

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