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Tuesday, 06 April 2021 23:24

Fast Advances in Technology Adding to Friction Between Insurers and Repairers

Written by Jim Sams, Claims Journal
Waseem Tarashibi points out an ADAS sensor on the front bumper of a BMW at his shop, CollisionTech, in El Cajon, CA. He said such details can be easily overlooked if collision repairers don’t follow manufacturers’ protocols. Waseem Tarashibi points out an ADAS sensor on the front bumper of a BMW at his shop, CollisionTech, in El Cajon, CA. He said such details can be easily overlooked if collision repairers don’t follow manufacturers’ protocols. Photo by Jim Sams

Index

...the second half the year after the Bureau of Labor Statistics increased the consumer price index for used vehicles by 11 points.

 

Because today’s cars last longer and vehicles are older, on average, than they used to be, the full impact of ADAS on claim frequency has not been fully felt. Gotsch said fewer than 20% of registered vehicles are equipped with the ADAS systems that have been shown to have the most efficacy in reducing claim counts, such as blind-spot monitoring, front and rear automatic emergency braking and forward collision warning.

 

Gotsch said the growing use of technology in vehicles forces repair shops to invest in tools and training that are specific to individual manufacturers. She said repairers are having to make decisions about where they should specialize.

 

Insurers pay for 89% of collision repair costs, according to CCC. Increasingly, repairs are being done through direct repair programs. Gotsch said DRPs made up 41.9% of repairable appraisals during the first 10 months of 2020, up from 37.4% in 2018.

 

An increasing number of direct repair program appraisals are conducted by national multi-shop organizations (MSOs) and fewer are being conducted by independent shops. Gotsch said MSOs conducted 37.6% of appraisals in 2020, up from 5.8% in 2000. The share of appraisals conducted by independent shops declined to 51.3% from 85.3% during that period.

 

“The large MSO’s, franchises and dealership groups in many cases are growing their number of locations and the markets they serve, and subsequently are seeing their share of the market grow,” she said.

 

General Motors is betting the growing popularity of electric vehicles will not be a fad. On Jan. 28, America’s largest car builder announced it plans to become carbon neutral by 2040 and eliminate tailpipe emissions from new light-duty vehicles by 2035.

 

“Our plans are an all-electric future and we’re moving very aggressively on that front,” said John Eck, collision manager for General Motors, during a January webinar sponsored by the Collision Industry Electronic Commerce Association (CIECA.)

 

That’s a long voyage. According to the U.S. Department of Energy, 1.44 million plug-in electric vehicles were sold in the U.S. from 2010 through 2019. Even if all of those vehicles are still on the road, that represents...


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