Hoping to standardize insurance claims processes

Just as collision repair technicians must learn the variations among vehicles — different fasteners, different materials, different structures — their managers and co-workers in the shop office are dealing with many variations in insurance claims processing procedures.

About 30% of collision repair claims are handled through insurance direct repair programs (DRP). But the differences among DRP requirements can be frustrating for shop estimators and office staff.

For instance, insurer “A” requires a mailed copy of the estimate that a shop also sent to them electronically; insurer “B” doesn't. One insurer requires the shop to keep detailed documentation about contact with the car owner; another doesn't. Some want certain types of photos before and during the process; others have different photo requirements.

“Each insurance company has their own set of standards and processes they want you to follow,” says Bruce Hoecker, body shop manager at Riley Chevrolet in Jefferson City, MO. “You get eight or nine DRPs, and it all becomes hard to remember, and they don't always have the guidelines spelled out.”

About the time you think you finally have mastered how the main four or five insurers you deal with want you to do things, one or more of them changes what they want, says Ted Stein, manager of the Drew Ford-Volkswagen body shop in La Mesa, CA.

“We spend a lot of time just trying to make sure we all know the different steps you have to follow for different insurance companies,” he says.

Mr. Stein addressed this issue, in part, by having each of his estimators become “specialists” in one DRP and handle those jobs. Each also becomes familiar with at least one other program to help out when that program's primary estimator is on vacation or otherwise indisposed.

“But my assistant manager and I get the pleasure of learning all of them,” he says.

Participants at the Collision Industry Conference (CIC) — a quarterly gathering, held in various locations around the country, and open to any shop, insurer or industry vendor — see the inefficiencies these variations cause and hope to do something about it.

Tom Moreland, co-chairman of the CIC Operations Committee, says his committee is developing a chart that summarizes each insurer's administrative processes and requirements for its direct repair shops. For each insurer DRP, for example, the chart will indicate:

The chart will be the first step in analyzing similarities and differences in the processes, in trying to determine some of the costs associated with those differences, and in trying to convince insurers that everyone would benefit from use of more standardized procedures.

Getting the information about insurer administrative processes and requirements hasn't been as easy as the committee thought it would be.

“All of the insurers we initially contacted about it said they're not willing to share the details because, in all fairness to them, they feel that the way their programs are set up and administered, in total, become differential advantages,” Moreland says.

But committee members believe insurers will get more involved as the committee demonstrates that the effort is designed to reduce costs for everyone.

“Our intent, once we have enough data, is to say, ‘There are really only three ways we're performing this type of function, and there's strong support for this one way being the most efficient and the one used the most,’” Moreland says. “Then the argument could be made to insurers not using that process that maybe they ought to try it that way. It'd be a lot easier on the shops and a lot more efficient.”

Moreland's committee is working in tandem with the CIC Insurance Committee. That panel is compiling a summary of which of the top 25 insurance companies require their direct repair shops to use a particular estimating system. The committee is working to demonstrate the potential cost-savings of eliminating steps in the claims process that seem inefficient.

Both committees hope to have drafts of their work completed early in 2002, and shop managers Stein and Hoecker say any move toward even some standardization of DRP processes will be helpful.

“There was a time when a service writer could be cradle-to-grave on a car: greet the customer, write the estimate, dispatch the work, get the parts coming, close the paperwork and do final delivery and follow-up with the customer,” Stein says.

He adds, “With DRPs, we've had to add an enormous amount of staff. We now have an administrative person for every two writers to help with the phone follow-up, to document the files, etc. Eliminating some of the differences in the programs could really help streamline things.”

For more information on the CIC committees' efforts, check the CIC website (www.ciclink.com). CIC's next general meeting will be held March 7 and 8 in Nashville, TN.