Five steps to help your shop handle insurer issues

(Photo courtesy of Allstate) Prepare to adapt to insurer staffing changes, even temporary ones, that could delay claim processing. Use previous claims, when necessary, to push for a speedy resolution.

Step 1. Put insurance SOPs in place. You already should have SOPs for other areas of your operations. Maintaining SOPS aimed at insurers just makes sense.

Bruce Halcro, owner of Capital Collision Center in Helena, Montana, and a board member of the Society of Collision Repairers (SCRS), notes that his shop follows a strict set of procedures that both mitigate conflicts with insurers and guarantees his shop is compensated for work. No work proceeds without insurer approval and without an agreed upon price for any supplements.

Further, Halcro doesn’t release vehicles to customers until all insurer issues have been hammered out. “You’re going to have a tough time getting paid once the car is gone,” he says.

Santa Rosa, Calif.-based G&C Auto Body utilizes a set of SOPs incorporating web-based training. CEO and part owner Shawn Crozat says the training includes shops KPIs and simplified insurer parts lists (where necessary). More important, it allows staff members to assist estimators.

“Using the web training, an employee needing to create a CCC estimate for Allstate should be able to do so with no trouble,” he says.

Note, however, SOPs can vary widely in certain markets. Amber Alley, manager of Barsotti’s Body and Fender Service in San Rafael, Calif. and also an SCRS board member, says her market includes so many auto insurers that maintaining SOPs can be nearly impossible.

Step 2: Learn to adapt. In these cases, Alley stresses that shops need to be able to adapt and juggle the requests of numerous insurers and adjustors.

Complicating this approach is the fact that adjusters and their supervisors can change—either by taking new roles in an insurance company or through attrition. More common, the insurance employees you’re used to dealing with can be out of the office on leave or vacation. Alley says replacements staffs can operate decidedly differently, meaning shops might need to pivot again to reach solutions.

(Photo Courtesy of G&C Auto Body) Many, perhaps most, customers don’t distinguish between the insurer and shop when it comes to repair responsibility. Customer satisfaction provides common ground where the two parties can work together for a great experience that benefits both them and the customer.

While continually transforming your business approach to deal with insurers can be onerous, keep two factors in mind. One, virtually all businesses need to be flexible to cope with changing markets. Adaptation is always going to be part of any operational philosophy.

Two, insurers need to adapt as well. Halcro notes that DRPs are set up as national programs. As such, they can conflict with local laws and regulations and don’t reflect the realities of every marketplace. This can be especially true in markets like his, Montana.

Halcro says adjusters there must find their own paths to administer repair programs that operate legally and offer benefits to shops—otherwise a DRP is essentially useless. His shop works with insurers to enable the DRP to work for everyone involved.

Step 3: Build positive relations.  This kind of cooperation can go a long way in keeping shops successful. Even if your shop wants no part of DRPs and takes an adversarial view of the insurance industry, you can--and should—build professional relationships where possible.

This can mean becoming familiar with insurer employees, communicating your understanding of their situation and needs, and looking for common ground when necessary to help one another.

It doesn’t, however, translate into compromising at every turn. You need to draw a line in the sand in areas that you believe violate your sense of fair play, along with ethical and profession behavior. This includes taking a hard stance against adjusters using unprincipled tactics, including outright intimidation, to force shops to do business their way.

The view from the other side

When ABRN began contacting large insurers for input on how they could work more effectively with shops, most declined or provided a general statement. Clint Marlow, an Allstate Claims Department Director and Cahir of the Collision Industry Conference Insurer relations committee, offered to sit down and give his perspective on where the industry is headed. Trends in the industry: Marlow: “Our industry really hasn’t changed very much. We’ve automated the books. Most have adopted electronic parts ordering. The operating model really hasn’t changed. Shops need to start rethinking this model. Customers are rethinking vehicle ownership. People aren’t getting their licenses at 16 like they used to. Self-driving cars are being used. We need to be concerned with whether people are going to look at vehicle ownership and believe it’s too much of a burden. All of us [ shops and insurers] need to spend part of our day rethinking the model to pass along a healthy industry. We need to spend an hour a week thinking about how we’re going to address these areas and other areas like staffing. What if young people don’t want to work on cars because they want to be in IT. We need to star working on these issues together to keep vehicle ownership desirable and the repair industry vibrant. I just don’t see a lot of people thinking 5-10 year down the road. And I can’t imagine a world where we’re doing things the same way in 5-10 years.” Where should shops be looking to improve? Marlow: “Customer communication. There’s not just one way. Shops should look at different approaches to communicating with customers based on what they want. Some prefer emails. Others want a call. Others don’t want called every day. All of us need to be looking at customer communication channels. As far as equipment and other issues, no one knows a shop’s capacity better than the shop itself. Not all shops are going to be able to afford the same equipment and things like certifications. Shops need to look at referral partners. Referring a customer, say to an Audi Certified shop, isn’t necessarily letting go of that customer. They need to look at costs and what they can afford to do. We refer business all the time. Shops need to consider doing so as well.” What can shops do to more efficiently handle customer issues? Marlow: “Customers really don’t distinguish between the shop and the insurer. Fair or not, they see this as one big process. Communication and transparency is the key. We both have to make them happy. We need to look as we’re speaking as one. It’s not a great customer experience when a shop tells a customer, ‘We’d like to give you something better than this recycled door, but the insurer won’t let me.’ In these cases, all three parties should discuss this and look at getting a new replacement door if that’s the best answer and makes the customer happy. We [shops and insurers] should look for ways to come together and speak with the same voice 99 percent of the time.” What is the current state of shop-insurer relations? Marlow: “Things have gotten better than they were in the 80’s when relations probably were at their lowest. Why have they changed? I think a lot of shops and insurers have realized we’re working in the same ecosystem. Shops enjoy having someone to guarantee payment. We see the importance of competition to keep costs down so repairs are affordable. Recyclers are important. The aftermarket is important. We have to work together to survive. To do that it’s important for each of us to be healthy. There are areas where we can come together—finding inefficiencies, collaborating where we can, working together to improve the customer experience. We really have to look again at what’s happening with vehicle ownership. People’s ideas are changing, and we have to do what we can to keep ownership attractive or things could change pretty quickly for everyone. The good thing is some of us are starting to talk about it, and there’s still time to act.”

Crozat, for example, maintains a list of adjusters who are banned from his properties. He also notes that shops can take more positive steps, in certain circumstances. to handle unreasonable adjusters. “Sometimes you’re dealing with someone who is new, just got out of training, and is fired up about the job,” he says. “That’s when we’ll give a supervisor a call and ask them to step in. That usually solves it.”

Again, search for common ground. There’s a good possibility the insurer also frowns on this behavior and doesn’t want to be represented in such a manner.

Step 4. Document the right way. Looking for more common ground? Document repairs thoroughly and accurately.

Adjusters and other insurance employees can’t pay when they don’t have sufficient evidence for work. Build that proof with repair documentation, especially photos, created throughout the repair process.

Alley says her business begins taking photos before the vehicle even enters the shop. Crozat notes both his techs and painters have access to a software program that allows them to take photos. His shop also utilizes a procedure that requires photos at specific points. For example, after the body work is complete, all vehicles are photographed before they’re “touched” by the paint department.

(Photo courtesy of Allstate) Finding common ground with adjusters and supervisors can go a long way to resolve issues today and down the road.

Going beyond the immediate repair, proper documentation is an invaluable negotiating tool. When Alley’s business deals with adjusters questioning compensation for a repair, she’s supports her position using documentation from previous work. “We’ll show it to them and say, ‘You paid for it before,’” she explains.

Step 5. Get in front of customer issues. Documentation and common ground, along with education, also play into one more insurer relations area, customer satisfaction. Like it or not, shops find themselves being mediators in customer/insurer conflicts. Your ability to rectify these can play a big part in your CSI scores and business referrals.

The best place to start is at the beginning—during first contact with customers. From there, prepare to respond to any inquiries.

Halcro says his shop heads off potential issues through customer education. “Let them know what to expect. Give them documentation,” he says.

If questions arise over controversial issues such as parts sourcing. Crozat recommends explaining why that choice was made. “For aftermarket parts, you can point out some of the benefits, “he says. “I’ll let customers know that most OEM parts come with a three-year warranty, but the aftermarket version from Keystone is covered for life.”

“You can then move on to how that part cuts the cost of repairs and keeps rates down,” Crozat adds.

More common questions can revolve around whether vehicle damage existed pre-collision. Crozat says the point to raise here is that the customer may just not have noticed until the accident occurred. If you believe it was pre-accident, don’t hesitate saying so and explain why. Should the customer raise a valid point, take it up with the insurer. In the event the damage isn’t determined to be accident related, offer your services for a customer-pay job.

If the customer persists, offer to set up a resolution session with the insurer. “When necessary, we’ll bring the customer in and get the adjuster on a conference call,” says Halcro.

Industry Update

What is the current state of the collision repair industry when it comes to insurer/shop relations? It all depends on whom you ask. Some repairers note that relations might have been at their worst during the 1980’s when it wasn’t odd to find shops posting signs declaring the insurers they refused to do business with. The 1990’s were marked by a steady stream of high profile lawsuits and state legislation aimed at insurer steering, parts usage and insurer ownership of shops. Since the new millennium, the public acrimony between insurers and shops arguably has quieted. “It seems things might have gotten better,” says Bruce Halcro. “You don’t hear about all the fighting quite as much.” But that mean conflicts don’t remain between the parties. In some ways, relations might as poor as ever. Barsotti’s Body and Fender Service in San Rafael, Calif. doesn’t belong to any DRPs. Manager Amber Alley says that even though the shop strives to do business its own way (for example, by setting labor rates it believes is fair) it still is subject to DRP controls.  “It’s almost like the industry is all part of one big DRP,” she says. “If one of the big DRPs in our area suddenly decides it isn’t going to pay for a certain service, they demand the same thing from us. Eventually, all the other DRPs fall into line and adopt the same rule.” “We get pushed to do what they want but don’t get any of the benefits because they don’t direct business to us,” Alley says. She also notes that insurers are pressing shops in new areas to pick up costs that they once paid. For example, she says insurers are having fewer adjusters come out to shops, relying instead on damage analysis performed by repairers. While that may appear to be positive news for shops, since insurers are ceding back a significant part of the repair process to them, it’s actually a part of a larger movement by insurers to shift costs back to shops. Alley says shops increasingly are having to handle the bulk of the administrative work that was once shared with insurers. That costs money. “We have to hire on additional people to do this work. That cuts into revenues,” she says. At the opposite end of this spectrum is G&C Auto Body CEO Shawn Crozat. His 11-location business works with a number of DRPs. Crozat sees his shop’s goal as working in the best interest of his insurance partners and customers, which says are the same. Crozat also points to examples of insurers working in the best interest of customers. “Every once in a while, an insurer will find a mistake one of our estimators makes,” he says. “Often we overlooked some damage that needed to be repaired.” Crozat believes, from his experience, that relations have warmed between shops and insurers since he joined the industry 18 years ago. Namely, he says insurers have begun understanding the benefit of maintaining stable relationships with shops and keeping shops financially healthy. “They see the value of managing people,” Crozat explains. “It’s not always all about costs.” And the debate continues.

Final thoughts

Ultimately, how you handle insurers has a great deal to do with your view on the insurance industry.  Some repairers thrive working in an environment where insurers hold tremendous powers. Others see them as simply another part of their business environment. Still others regard them as little more than nuisances.

The fact remains that insurers aren’t going anywhere. Having a business strategy that allows you to navigate these sometimes calm, sometimes rocky waters only makes sense for everyone.

(Photo Courtesy of G&C Auto Body) Begin repair documentation before a vehicle enters your shop and continue throughout the repair, making sure to photograph the vehicle at specific points and for any supplement work. Detailed documentation help you enable insurers to make timely payments.