Not long ago, I got a LinkedIn notification about a new Insurance Journal LinkedIn post entitled “Experienced an Auto Insurance Claim Lately?” The opening of the post said:
“If you’ve had an auto claim recently chances are you were offered a photo appraisal. This technology is proving a ‘game changer’ moving claim cycle times down from 5-8 days to only hours.”
In June, I had my first personal auto claim since 1968. Yep, 50 years without an auto claim. My insurer had an automated claim reporting system that I accessed via my phone. I essentially involved me transmitting photos of the damage from several angles.
I had an estimate for repairs the next day for $1,960.41 and a check 3 days later for that less my $250 deductible. The estimate said repairs should take 4-5 days.
The cost of the actual repairs? Over $5,000. The time to get the repairs completed? 32 days.
How often did I hear from the adjuster or the repair shop during those 32 days? Never. Not once. No updates on that 4-5 day repair period I was expecting. Until I started calling, then they figured out they could save time by having their approved repair shop update me weekly.
In addition, in my only phone conversation with the adjuster, he advised (as I knew) that my policy included up to 30 days temporary substitute car rental for up to $40 per day. As anyone who has read my articles or attended my seminars over the past 30+ years knows, I don’t rent vehicles without buying the loss damage waiver (LDW).
So, I asked the adjuster if I could use that $40 to cover the daily rental and the cost of the LDW if I could negotiate both within the $40 limit. I was told “No” because (1) my policy only covers the actual rental cost and (2) there’s no need to buy the LDW because my physical damage transfers to nonowned cars.
With regard to (2) above, clearly the adjuster hasn’t read this article. There are quite a few things my auto policy may not cover with regard to damage to a rental car, the most important to me being diminished value. You would think an insurance adjuster would know this, but I find that perhaps a majority of insurance professionals simply do not understand this.
With regard to (1) above, my policy really doesn’t say that at all. It just says I have up to $40 a day for “temporary transportation expenses.” Given, as explained in (1) above, that my policy doesn’t transfer perfectly to the rental car, I’d like to think that the LDW is a legitimate necessary expense and could potentially save the carrier from having to be involved in yet another claim for a mere pittance.
But, rather than debate the issue, given that my wife and I own three vehicles, I drove the one that still worked rather than renting a car, saving the insurer up to $1,200.
We hear often today from insurtech startups about the “customer experience” and how technology can move that experience from pain to near orgasmic pleasure. Reporting the claim was awesome…only minutes required. How do you think I feel about the rest of the experience?
What is your experience in dealing with these new means and methods? How accurate is the simple transfer of phone photos in determining actual repair costs and how long they will take? Feed free to comment in the Comments/Leave a Reply section below.
Bill Wilson
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Good Risk Management to have an extra car…but, were you acting as your own agent in this?
I’m not sure my agent was aware I had a wreck. I reported it directly to the insurer and never heard after the initial reporting from anyone. I initiated all of the subsequent contact.
My previous auto coverage contained rental vehicle coverage without a dollar limit. If your vehicle was involved in an accident you were provided a rental vehicle like your insured vehicle Mercedes to Mercedes Ford to Ford. They also had negotiated terms with the rental company that included the LDW. This carrier was sold several years ago and I am now back to dollar limit for rental vehicle coverage in an accident.
Boy that was some insurer!
My response to a reprint of this article on another web site:
https://agencychecklists.com/2018/08/21/insurop-ed-my-first-auto-claim-in-50-years-25292/
I didn’t exercise the rental car coverage…we have 3 cars between the 2 of us, so I was able to drive one of them. My point in that part of the discussion was that a professional claims person did not recognize that, while my physical damage coverage extends to a rental car, there are significant enough gaps to make the LDW a necessary (in my mind) purchase. Contrary to the adjuster’s assertion that my policy only pays for the actual rental cost, the policy doesn’t say that. It says it pays for “alternative transportation expenses” and doesn’t condition that coverage on such expenses being “necessary.”
I just read the August 2018 CIPR Newsletter of the NAIC which is titled “Rental Car Insurance Explained.” Their explanation is wrong on many counts, including the myth that, if you have physical damage coverage, it extends to the rental car with minimal gaps. Articles on the III (Insurance Information Institute) website contain equally inaccurate articles. There are several articles on my blog about this, including:
https://insurancecommentary.com/does-your-personal-auto-policy-cover-rental-cars-answer-no/
It’s bad enough that consumer publications have erroneous rental car insurance information, but even worse when our entire industry is rife with bad information written by people who don’t know what they’re talking about and who likely have never even read their own insurance policies.
Bill, Good article and you bring up some important points. I would mention that a visible damage estimate in a drive in claims center or an inspection by an adjuster at your home or work would have produced a similar outcome. The difference? You saved the time and effort of setting that appointment, driving to a claims office or interrupting your day to meet the adjuster. Customer contact and communication will be something that Insurance Carriers will need to balance as technology becomes more prevalent in the cliams handling process. The rest of the story is a symptom of the ongoing effort to get and keep talented and educated people in front line roles of insurance companies. I started in claims 25 years ago and many of the same challenges existed then as well.
I had a negative experience with this as well. I was offered the phone app which I took advantage of. I spent about an hour of my time getting decent photos due to lighting issues (only had the option of photo early morning or late afternoon). The result: images did not clearly show all the damage. The app was hard to figure out and I wouldn’t want to do it again. Insurer sent me estimate within a couple of day (BTW, I almost never could get him on the phone). I took the car to their approved shop. Onsite, the repair shop identified a lot more damage than was estimated. They took photos while I was there and they contacted the claims representative directly and got the approval for the additional funds.
I’d prefer to have a local claims rep come out and do the assessment should I ever need to file a claim again.
I didn’t really expect the claim to only be that amount, though it was much larger than I thought it would be. My main point was that the LinkedIn article implied that this “technology” was going to dramatically improve the process. The bottomline was that the expectations created in me as the insured were not fulfilled by anyone involved in the process. The issue wasn’t technology but rather communication and empathy.
Interesting article, I agree on so many levels. My sister recently had an accident – where her vehicle was totaled with no explanation as to the why- only front quarter panel damage- I suspect the frame was bent but again no explanation that it was totaled and when she requested her own garage to look at vehicle- insurance company said no. Not sure that is proper customer service. I realize people may be over-worked- but no one ever called her back – only sent emails and then days on end before receiving a response. I too agree with the optional transportation expense should cover up the limit purchased for everything – whether it be taxes, LDW, etc….