As insurance carriers look to expand their relationships with favored repairers and DRPs, while simultaneously reducing the amount of real estate they have to operate, carriers have increasingly turned to collision shops to help provide drive-in/drive-through estimating services for their customers.
For vehicles that have been damaged but are still safe to drive, many carriers operate their own drive-in claim centers where appraisers can conduct inspections and prepare repair estimates on site. Many smaller carriers can't afford to operate these types of facilities, however, and even larger insurance companies have begun to move away from owning and staffing claim centers.
Most insurer/repairer collaborations, however, aren't that integrated. In most cases, the insurance company rents office and floor space for estimating activities on a set schedule. And as more insurance companies look to reduce field expenses, we could see even more of these drive-in services pop up at collision shops.
"I think it’s a trend we'll see more of down the line," says Darrell Amberson, vice president of operations at LaMettry's Auto Body, a Minneapolis-based MSO, which operates drive-in estimating services at some of its locations.
For example, Collisiontec, a shop in Clearwater, Fla., now provides drive-in service for Nationwide. According to co-owner Dan Cooley, the shop previously had a similar relationship with Geico.
The Nationwide partnership has only been in place a few months, but plans for such a service have been in the works for a while. Collisiontec recently opened a brand new 15,000-square-foot facility earlier this year that includes extra office space intended for adjusters. "The adjusters have somewhere to work when they come in, with their own desk and Internet Connection. Nationwide can do inspections in the parking lot outside, or we have a covered area in the lot when the weather is bad," Cooley says. ""They can also pull right inside the shop."
At LaMettry's, State Farm now provides drive-in services at two locations. According to Amberson, the carrier has an indoor estimating area, dedicated parking spots, and signage within the shop. They pay a small fee to LaMettry's for the space. "They have staff on site, and we get quite a few customers coming through for the State Farm estimates," Amberson says. "They operate there two half-days a week in a specific area."
State Farm has been at LaMettry's for roughly a year and a half.
While both Collisiontec and LaMettry's are currently working with just a single insurer, more than one carrier can operate a drive-in at a shop. The shop simply has to coordinate which insurance company has drive-in hours on which days. "If you have a carrier that uses the lot Tuesday and Thursday, you can rent space to someone else on the off days," Amberson says. "We've worked with smaller carriers that can't afford to have their own estimating offices. You don't charge very much for it, but you aren't giving them something for free."
Collisiontec, in fact, designed its new offices to house adjusters from multiple carriers. "Our plan was to have space for drive-in services," Cooley says. "Even when they come in to do supplements, they have somewhere to work."
Carriers save, shops gain
For the insurance carrier, the benefits of these arrangements come through being able to provide a convenient location for customers at a relatively low cost. "We have a specific geographic area that is accessible from major thoroughfares," Amberson says.
In the case of State Farm, the company's ongoing restructuring has resulted in the consolidation of facilities. Amberson says the company is looking to DRP partners to help provide claim center coverage in areas where they have reduced their real estate footprint.
Cooley says Collisiontec's performance in Nationwide's DRP program led to the drive-in connection. "We're a higher quality shop, and they know are reputation via the DRP program and our CSI rankings," Cooley says. "When we built this facility, we had are eye on how the industry is trending. The insurance companies want this type of facility, and they want customers to be confident that they are in good hands. The days of the smaller mom and pop shops that don't have this kind of space are going by the wayside."
The benefits for the shop come from enhancing the relationship with the insurance company, and through gaining some incremental business via the customers coming in for estimates.
"Obviously you hope to snag some of the claims and turn them into a job," Cooley says. "You aren't going to get every one of them, but if your personnel make them feel comfortable when they walk in the door, that helps. They know the estimator is there writing estimates in that shop for a reason, so that's a built-in recommendation."
"There are a certain number of those customers you can capture if you have a good relationship with the estimator," Amberson says. "In the first few weeks we had State Farm here, we got roughly one fourth of those customers to get their repairs done at our shops. We're not giving them a sales pitch, but often we could answer questions for them and that would lead to them making an appointment."
At Collisiontec, Cooley says Nationwide's volume is very low right now. "Its' a slow time of the season in Florida right now, and most of the insurance company's claims are off drastically right now." He cautions that shops should expect to only capture a portion of the claims business coming through the drive-in process.
For vehicles that come in through the drive-in and wind up selecting LaMettry's for repairs, the claims process can be somewhat condensed. "If we find additional damage on a vehicle, for example, if this was a non-DRP scenario they would send someone out to write it up, and we'd have to wait until they got here to look at it before they would issue the supplemental check," Amberson says. "In a DRP scenario with State Farm, we communicate the supplement to them, but we can take the photos and usually get approval over the phone. It eliminates some steps."
According to both Amberson and Cooley, the only downside is some additional traffic and congestion associated with providing space in the lot and the shop for the drive-in service. "Obviously you are putting effort into it, and they are using parking spaces and office space," Cooley says. "The return is not necessarily as high as you might expect, so you have to have reasonable expectations."
Amberson says that he expects more carriers to partner with shops on drive-ins. "Many insurance carries want to put more cars through their DRP process, and a lot of them are doing what they can to reduce their own overhead," Amberson says. "State Farm treated this as if they were awarding it to us. They have been looking for shops that perform at a certain level based on their scoring system, and shops with a higher ranking were more likely to be considered."
Amberson adds that LaMettry's hopes to add drive-in services at additional locations in the future. Cooley is looking for similar opportunities as well.
"We just moved into the facility in January," Cooley says. "We'd like to get more insurers in here, but we're waiting to see who else might be interested."
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