Insurance Actions (40)
PCI Says Auto Body Legislation will be Priority for 2012
Written by staffThe Property Casualty Insurers Association of America’s (PCI) said auto body legislation would be one of its key priorities for 2012. PCI said it anticipates the major auto body repair and glass issues for 2012 will involve aftermarket parts, labor rates, steering and estimating systems. To help control costs and promote customer service, PCI said it will oppose legislative efforts that would restrict insurers’ ability to make recommendations or suggestions to consumers on individual repair facilities or that would impede insurers’ ability to manage the claim repair process and control costs on behalf of consumers.
“PCI is committed to advancing a pro- consumer agenda that supports healthy, competitive insurance markets across the nation,” said Paul Blume, senior vice president of state government relations for PCI.
“In these tough economic times consumers are best served by measures that address the cost drivers of insurance and provide individuals with choices. Our agenda will also help modernize state regulatory environments and improve insurance marketplaces.”
In addition to auto body legislation, other priorities include protecting and promoting the viability of a competitive private insurance market, curbing fraud and abuse in several no- fault auto insurance systems, addressing auto body repair and coastal property insurance issues, as well as advancing cost containment measures in state workers compensation systems. In addition, PCI anticipates credit-based insurance scoring and tort reform to once again be legislative issues during 2012.
PCI said it made significant progress at the state, federal, and international levels last year on many issues, despite facing an anemic economy, increasing political and regulatory pressures, and historic natural disasters. Looking forward to 2012, PCI said it anticipates facing many of these issues again, with the additional challenge of advancing its advocacy agenda during a watershed presidential election year.
Study Shows Total Losses Rate Less Satisfaction than Repairs
Written by staffAuto insurance claimants who incur a total vehicle loss are notably less satisfied with the claims experience than claimants who incur a repairable vehicle claim, a new study by J.D. Power reports. Satisfaction averages 811 on a 1,000-point scale among claimants with a total loss — 42 points lower than among those whose vehicle is repaired, according to the J.D. Power 2011 U.S. Auto Claims Satisfaction Study released Oct 27.
Auto-Owners Insurance scored 890 in overall claimant satisfaction, ranking the highest among all insurance companies for the fourth consecutive year. The following insurance companies round out the top five:
• State Farm: 878 overall claimant satisfaction score
• Amica Mutual: 865 overall claimant satisfaction score
• American Family: 862 overall claimant satisfaction score
• The Hartford: 858 overall claimant satisfaction score
The following insurance companies comprise the five ranked lowest regarding claimant satisfaction:
• Farmers: 804 overall claimant satisfaction score
• Esurance: 800 overall claimant satisfaction score
• Encompass: 789 overall claimant satisfaction score
• Commerce: 772 overall claimant satisfaction score
• 21st Century: 771 overall claimant satisfaction score
This gap is largely due to a lack of satisfaction with the settlement among total loss claimants, with approximately one-half of these claimants citing the settlement they received wasn’t enough to replace their totaled vehicle with a similar make/model vehicle.
“Auto claims resulting in a total loss tend to be more complex, compared with vehicle repair claims, because in addition to filing a claim, claimants also have to purchase a replacement vehicle,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “Ongoing communication and managing expectations are key throughout the entire claims process, as total loss claims take 18.2 days, on average, for claimants to receive payment, compared with just 12.5 days for the return of a repaired vehicle.”
The Society of Collision Repair Specialists (SCRS) is conducting a survey of 13 major insurance companies to determine their use of aftermarket replacement parts.
The survey was sent last week to Allstate, American Family, Farmers, GEICO, Liberty Mutual, Mercury Insurance, Met Life Auto and Home, Nationwide, Progressive, State Farm, The Hartford, Travelers and USAA, according to Aaron Schulenburg, executive director of SCRS. He said the survey was “an effort to bring further transparency to our understanding of carrier’s approaches to use of aftermarket replacement parts.” The survey was motivated by input from SCRS members and ongoing discussions stemming from aftermarket replacement parts, Schulenburg said.
“We are finding that members in different parts of the country are submitting conflicting reports about the policies of some major national insurance companies. In other words, we are hearing that in some cases field level practices may vary from official corporate policy on parts use. In some cases, an insurer may have a policy for use of only certified parts, but when a certified part is unavailable, the shop is instructed to simply select a non-certified part by the field adjuster,” Schulenburg said.
“It is also possible that, in those cases, some shops may assume that a non-certified part is what the carrier wants them to do, and may not realize that the insurer would prefer an OEM replacement part if the only available alternative is a non-certified part,” he continued. “Knowing what specific corporate policies exist, provides for a better, more transparent, understanding of the approach taken in settling a vehicle owners claim. “In the interest of transparency, and with an issue as important as aftermarket parts in structural repair, the SCRS board of directors felt that it would be worth our efforts to conduct this study, and share the results with the industry.”
To see the insurer survey, CLICK HERE
Coccaro Case Takes a Wide Turn as NY Supreme Court Decides Consumers Can Sue Insurers for Steering Damages
Written by staffThe ongoing Greg Coccaro v. Progressive case (formally North State Autobahn, Inc. v Progressive Ins. Group) has taken a wide turn in a NY Supreme Court decision very similar to a recent California Supreme Court ruling (see coverage in Autobody News HERE.) Essentially both the NY (North State) and CA (Hughes) [See Autobody News' coverage of Hughes HERE.] decisions allow the respective State insurance codes, which prevent private parties from suing insurers for steering related damages, to be trumped by overlapping general business law, under which an insurer can, theoretically at present, be sued for steering-related damages.
North State's original case against Progressive had included several causes of action against the insurer, including steering, tortious interference, and injurious falsehood. The first claim, a violation of the state's anti-steering law, had been previously dismissed because New York (and also California) does not provide for a private right of action for such violations. Those violations are actionable only by a state or government agency such as the Attorney General or Department of Insurance.
The June 24, 2011 decision by NY Supreme Court Justice Gerald E. Loehr, in Westchester County, found that North State's claim against Progressive, which is predicated on derogatory statements about North State to its customers in order to steer them toward Progressive's DRP facilities, are not merely "disguised" claims of steering as Progressive argued. Progressive had filed a motion to dismiss the remaining claims against it including alleged violations of the General Business law. They argued that North State's argument was merely a disguised steering claim.
Basically the judge found that, although misrepresentations uttered in connection with a private, business-to-business dispute does not turn the matter into a general business law violation, practices by insurance companies involving routine, widespread marketing and communication with insureds, impacting the public at large, may support a cause of action under NY's general business law, section 349.
Class Action Lawsuit Filed Against Insurers Alleging Control of CAPA
Written by StaffIn an amended class action complaint filed in July in federal court in California against State Farm, Allstate, GEICO and others, the plaintiffs describe the Certified Automotive Parts Association (CAPA) as an insurer-controlled tool designed to help the defendants compete unfairly against insurers using genuinely high-quality parts in repairs.
It alleges the "consumer group" represented on CAPA's board (Advocates for Highway and Auto Safety) is also insurer-funded. It quotes a State Farm executive as having said at a CAPA meeting that if "the parts were high quality, a public relations campaign would not be necessary."
Without saying when this occurred, the lawsuit (originally filed in 2006) says that "CAPA itself decided to lower its standards," and quotes an internal CAPA memo by Karen Fierst (who left CAPA in 1998) saying the change was done in such a way "to avoid calling attention to this detail."
The suit seeks damages for "at least several hundred thousand" members of the class that it says have been harmed by the defendants' unfair competition and restraint of trade.
Allstate Announces ‘Process Changes’ Designed to Improve Network Cycle Time
Written by StaffBack on July 11, Allstate Insurance Company announced to its DRP participants that shops will be required to honor completion dates or assume all related costs, expedite estimate and upload completion times, and extend their hours of operation, when necessary, for the convenience of Allstate customers.
Now Allstate’s customer service initiative for 2011 has been expanded. The new program requirements were introduced to shops in a series of cycle time web conferences held recently. Those unable to view the web conferences are encouraged by the company to contact their local performance managers.
Allstate is making “several key process changes” within its Good Hands Repair Network that the company says are designed to positively impact customer service and cycle time. The announcement comes in the form of a video released by the company featuring Tracy Tramm, Allstate Claim Service Manager for the Good Hands® Repair Network.
In the video directed at the DRP shops, Tramm says “As you know, reducing auto cycle time is a key component in improving customer satisfaction for Allstate and your facility... as you continue to deliver priority service to our mutual customers.
“It goes without saying, that the quicker you reach out to the customer, the sooner they know, they’re in our good hands. I also want to remind you of four key messages and process changes to the network program in early 2011.
“Compliance with these items remains a core requirement for your participation in Allstate’s direct repair program.
“First and foremost, your shop will give priority service to Allstate customers having their vehicles repaired by you. Estimates must be completed and uploaded within 24 hours of your receipt of the vehicle. Third, your facility will be required to commit to a guaranteed completion date for all vehicles repaired under the Network program. Your shop will be responsible for any and all costs caused by a failure to meet the guaranteed completion date.
And finally, at the customer’s reasonable request, your shop will provide extended hours of operation. Contact your local performance manager to answer questions. You are why it works. Thank you.”
The video can be viewed at www.autobodynews.com by searching this story under the “Insurer Actions and Announcements” section.
SCRS releases Details of Farmers Insurance DRP COD agreement
Written by SCRSSCRS Outlines New DRP Agreement Guidelines
Recently, some of the industry trade publications have already reported on the concern voiced from repair facilities across the country over intrusive elements of Farmers Insurance new COD agreement. The Society of Collision Repair Specialists (SCRS) reviewed the content, and believe that it is in the best interest of the industry to make the agreement available for public review.
Insurance carriers have continued to increase pressure over repair shops to obtain the quickest/cheapest repair, while interjecting themselves further into the oversight and management of repair businesses. The industry is often disadvantaged by restriction of communication from participants of these programs, and it is important for the industry to rely on factual review of documents, rather than anecdotal musings. If we wish for business conditions to improve, it is important that our industry finds the voice to express our concerns openly and honestly without fear of being transparent.
To that purpose, SCRS has highlighted some areas of interest below. All recipients of this communication are notified that the materials presented are not to be construed as direction or suggestion, and is intended simply to better inform individuals acting within their own judgment, making sound business decisions, without agreement to take concerted action.
Please note that in these excerpts, "Exchange" refers to Farmers Insurance, and "Vendor" refers to the DRP repair facility:
5.2 DISPUTED AMOUNTS. If Exchange in good faith disputes any portion of a Vender invoice ("Disputed Amount"), Exchange will timely pay Vendor for the undisputed amounts of that invoice. Unless otherwise specified by federal or state laws, statutes, codes, rules, or regulations, within thirty (30) days of receipt of an invoice from Vendor on which a Disputed Amount appears, Exchange will (i) notify Vendor in writing of the specific items in dispute; and (ii) describe in detail Exchange's reason for disputing each such item. Within thirty (30) days of Vendor's receipt of such notice, the Parties agree to negotiate in good faith to reach settlement on any items that are the subject of such dispute. Vendor will not terminate this agreement on the basis of an alleged breach involving Exchanges failure to pay a Disputed Amount unless the Disputed Amount exceeds fifteen percent (15%) of the total amount payable under this Agreement or the sum of twenty five thousand dollars ($25,000.00), whichever amount is greater.
(SCRS Note: DRP facilities would seemingly have agreed that the carrier can dispute their charges 30 days after they are invoiced, and the repair facility can't terminate their agreement based on a breach of contract if they fail to pay unless it is a $25k short-pay.)
11.4 Vendor shall ensure that its General Liability, Workers' Compensation, Garage Liability, Coverage for Garage Operations, and Physical Damage insurance policies allow Vendor to waive its rights of recovery prior to a loss and that the carriers furnishing such insurance policies shall be required to waive all rights of subrogation against Exchange, its officers, agents, employees, and other vendors and subcontractors. To the extent permitted by law, Vendor shall look solely to its insurers and not to Exchange's insurers for loss or damage arising from work performed for Exchange.
(SCRS Note: How many business carriers will allow their clients to waive their rights in this manner through this agreement? Will a collision repair business still have coverage if they sign this? How many of the shops have taken the time to forward this provision to their carriers to ask if they approve of their unilateral waiver of rights to subrogate against the carrier in question? What if a staff re-inspector injures themselves on the shop property due to their own negligence? It appears plain and simple; the liability falls on the shop for their repair approach and choices.)
12. MOST FAVORED CUSTOMER. During the term of this Agreement, if Vendor enters into a written contractual relationship with an insurance company or organization pursuant to which (a) Vendor provides services substantially similar to those provided to Exchange, and (b) Vendor provides pricing or other commercial terms that are more favorable than the pricing or commercial terms being provided to Exchange for work performed by Vendor, then Vendor shall offer to Exchange in writing, within thirty (30) days of Vendor entering into such agreement, the same or better pricing and/or commercial terms to Exchange. On a quarterly basis, Vendor shall provide a written certification executed by an officer of Vendor of Vendor's compliance with this Most Favored Customer provision.
(SCRS Note: "Most Favored" pricing language is currently being challenged in the healthcare industry. Is it interesting that the repair industry is constantly asked to be "competitive" and those same parties now want the industry to guarantee pricing given to another party, which by virtue is not competition.)
16. SUBCONTRACTING
16.1 (ii) Sublet repairs reflecting a retail price within the local market should be written without a mark-up. Sublet items reflecting a wholesale price may be considered for a mark-up not to exceed 25% of the sublet charge. All invoice mark-ups combined may not exceed $200 for the entire repair.
17. INSPECTION OF BOOKS AND RECORDS. Vendor agrees to maintain and preserve its books and records in accordance with generally accepted assounting procedures ("GAAP") for a period of three (3) years or for a longer period if required by applicable law or regulation. Any time prior to the termination of this Agreement and for a period of two (2) years thereafter, Exchange shall have the right to inspect and audit such portions of the Vendor's books and records as is necessary for purposes of verifying amounts payable to Vendor or its authorized subcontractors and to verify compliance with the terms and conditions of this Agreement. Vendor agrees to make such books and records available for inspection by Exchange, its designee, or any insurance regulatory authority immediately upon request.
(SCRS Note: Are business owners, willing to open internal accounting books to a party outside of the business? There are concerns voiced regularly throughout the industry regarding data that is shared through electronic mechanisms. Now this program appears to require businesses to open up all their books, P&L statements and proprietary business information to another party.)
27. BACKGROUND CHECKS.
27.2 In no event will Vendor in the performance of this Agreement use the services of an individual who has been convicted of a felony, including but not limited to any convictions involving dishonesty, a breach of trust or moral turpitude.
(SCRS Note: Language in this section is similar to requirements in other programs, requiring complete background checks, and no shop can employ individuals who have ever been convicted of a felony; in some states that may mean a DUI. How many of businesses hire good, decent employees - from detailers, technicians to office staff - who may have made mistakes in the past, but have earned their employers trust and respect for the work they do today? Is it necessary to allow another party to interject who is employed in a privately run business? Is the requirement reciprocal to the representatives who will interface with repair facilities in the field?)
There is lots of information in this agreement. SCRS' decision to release a link to this document is in no way to be construed as legal or ethical advice or opinion; however, it is our hope that the industry finds the information useful in making educated business decisions, and discusses the material responsibly.
The complete agreement can be found by clicking here.
About SCRS: Through its direct members and 38 affiliate associations, SCRS is comprised of 6,000 collision repair businesses and 58,500 specialized professionals who work with consumers and insurance companies to repair collision-damaged vehicles. Additional information about SCRS including other news releases is available at the SCRS Web site: www.scrs.com. You can e-mail SCRS at the following address:
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State Farm to Close Field Offices, Consolidate to Save Costs
Written by staffState Farm said May 9 that it plans to close 10 field offices in Illinois and 14 more in Indiana and Michigan, the insurer's latest cost-cutting move and one expected to save $8 million over five years.
The consolidation could displace hundreds of employees, but none based in the Twin Cities. The Illinois Operations Center in Bloomington will remain open and State Farm's corporate headquarters is not affected.
There are 1,300 employees in the 24 offices, which mainly handle auto and home claims, and State Farm's goal is to retain everyone, said spokeswoman Missy Lundberg. She said some claim representatives will stay put and work from home, but others, particularly in more administrative roles, will be given the option of relocating to one of six remaining Great Lakes Zone offices -- two each in Illinois, Indiana and Michigan.
full story HERE
Nationwide Insurance Offers Key Insurance Information for Policyholders Affected by Tornadoes
Written by NationwideNationwide Insurance claims representatives continue to assist customers in Alabama in response to tornadoes that affected the state last week. Policyholders with storm damage should call the Nationwide claims hotline at 1-800-421-3535.
Nationwide has received more than 1,500 claims in Alabama since April 27, in varying degrees of severity.
As policyholders are able to access their homes and neighborhoods after the storms, homeowners can do several things to protect their property:
- Make temporary repairs safely to prevent further interior damage or loss. Holes in roofs and broken windows should be covered with plastic or plywood and the property should be secured to prevent theft or vandalism
- Create an itemized list of the home’s damaged or destroyed contents. Retain damaged items to allow for proper evaluation.
Policyholders should also know:
- Homeowners insurance generally provides protection against the most common perils, including fire, theft, wind and liability.
- For auto insurance, a comprehensive policy generally provides for losses due to a catastrophic storm, including rain, hail and wind.
- Personal possessions within a car are not covered by an auto policy. A homeowners or renters policy typically provides coverage for personal property.
- Although our policyholders are free to choose any contractor or body shop they wish, Nationwide claims representatives and agents are great sources of information when a policyholder is selecting a contractor to make repairs to a home or an auto body shop to have their vehicle repaired.
The Nationwide Catastrophe Team, a group of experienced professionals who understand the complex claims that happen in a catastrophe, are on the ground, getting to customers as quickly as possible. This team will work 12-hour-days, seven days-a-week until all policyholders’ needs have been addressed.
'Confessions of an Auto Claims Adjuster' by Edmunds.com
Written by edmunds.comWhen you want to get a little more for your car, you can't be nice. The adjuster knows what he can do, he's done it a hundred times before and he won't hesitate to do it again to close that file. But to you, the individual, it's a brand-new thing. And it's money in your pocket.
After my friends get in a car accident, they come to me to ask how to deal with the claims adjuster. Recently, I helped a friend who had totaled her Mini Cooper and she got $1,500 more than what the insurance company first offered her.
You have to know the business and understand the role of the auto claims adjuster and then you can negotiate effectively on your own behalf. It's not that the insurance companies are trying to cheat their clients. Actually, they want you to be happy. But they are in a hurry, with lots of open cases, and don't have the time or inclination to thoroughly research your case.
Read the rest of the article HERE
State Farm Announces Revised Electronic Parts Ordering for its DRPs
Written by staffState Farm Insurance has already experimented with electronic parts ordering in a few states and has language in its select service agreements (with DRP shops) enabling requiring the computerized parts orders. Now the company says it wants to "reduce the amount of time and effort needed to search for, source and order all part types," and "to give suppliers a better view of the process, and access to complete parts orders." In a video Click here the Insurer's Gregg McDonald describes a new review tool to allow shops and vendors to provide feedback on the parts ordering experience. "Supplier choice and decisions regarding which parts are best suited for the individual repair will remain in your hands," McDonald tells Select Service shops in the video.
