Since insurance companies began utilizing cell phone apps for photo estimating a few years ago, it has become a topic of great concern among many collision repair professionals.
Although insurers claim that photo estimating is more convenient for consumers, collision repair industry leaders have predicted that the short-term convenience may be negated by additional time required for supplements, as well as the potential for consumers to receive less money for diminished value than they’re owed. Now that they've been involved with this process for some time, shops in Texas are finally speaking out about how photo estimating impacts the repair process and the consumer experience.
Chad Kiffe, General Manager for Berli's Body & Fine Auto Finishes, says, "Photo apps allow the consumer to start their claim faster without the need to go to a shop for an estimate. This is a big plus for consumers when considering the value of their time, but photos very rarely show the extent of damages due to numerous reasons, resulting in poor estimates. This causes unnecessary delays since most photo estimates are so far off that repairs cannot begin until the insurance company comes out on a supplement."
“The major benefit to photo claims is that the consumer is in control of starting their claim, which makes them feel empowered, but that is where the convenience ends,” agrees Eric McKenzie, Director of Body Shop Operations for Park Place Dealerships. “The major drawback is that these estimates are being written significantly lower than they should be, and we are seeing estimates that are nowhere close to what they should be. For the consumer who elects not to repair their vehicle, they are being grossly underpaid for the money that is rightfully theirs from a claim, but when the vehicles do make it to a repair shop, it is adding significantly more time to the repair planning and supplemental processes.”
Weighing in, Burl Richards, owner of Burl's Collision Center, adds, "The estimates are grossly unrealistic---sometimes, only one-tenth of the actual cost to make the repair! In theory, it would be a great way to save time if the shop could call in a supplement, get approval that day and continue with the repair, but it seems to put much more administrative burden and time on the shop, straining our relationship with the insurers, plus the insurer's initial estimate is basically worthless, so we have to start from point A."
Richards believes that photo estimating only benefits the insurers, as they save money on hiring estimators and other associated costs. Kiffe agrees that photo estimating makes financial sense for insurance companies, but he points out that it also causes unnecessary friction between the shop and the insurance carrier.
"The estimate is so far off that it's really slowing down the process," Kiffe said.
Kiffe cites examples of these inaccurate estimates: The shop wrote a $5,500 estimate on a keyed vehicle, but when they submitted photos as requested, the insurer returned a $265 estimate. When a customer brought in their Honda Fit that was hit by a Hummer H3, the insurance company provided a $1,000 estimate for which four hours of repair time was accounted. Berli's Body and Fine Auto Finishes’ supplement countered with a $6,800 cost for repairs needed to replace the lift gate and rear body panel.
Although supplements are a normal part of the process, insurance companies are often taking days or weeks to respond, preventing the shop from moving forward or taking additional work. The Honda Fit was brought to the shop on Sept. 20, and a supplement was submitted two days later, but it took until Sept. 29 for the insurance company to approve the supplement, finally allowing the shop to move forward with repairs.
Kiffe also worries about how photo estimating, designed to be convenient, actually negatively impacts the customer.
"Our customers have been irritated about the poorly written estimates and concerned that the insurance company will pay for the repairs,” Kiffe said. “Customers lose trust in the insurance company when they see the final repair cost, which is sometimes 10 times the original estimate. Customers who unknowingly take their vehicles to an average repair shop don’t always receive a quality repair. Many shops may not supplement everything needed for fear that they will upset the insurance company. Some shops may not ask for more or will settle for the cheap estimate and cut corners thinking they are helping the customer, but in fact, they are exposing the customer to poor quality repairs."
While Kiffe's customers found photo estimating to be convenient at first, the lack of financial fairness often causes them to question their insurers’ motives and grow frustrated with the delays associated with supplement approval.
"Additionally, many customers may choose not to repair their vehicle. When this happens, the insurance company that was supposed to protect them and cover them has now cheated them," Kiffe notes.