One thing that collision repairers and insurance companies often butt heads over is estimating procedures. In New Jersey, however, many collision repairers are just banging their heads against the wall, thanks to clashes with Travelers Insurance company that have, thus far, been largely unresolved.
The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) has been at the forefront of the scuttle, and in an interview with ABRN, AASP/NJ Executive Director Charles Bryant discussed the communication – or lack thereof – with the insurance company.
“At some point in the later part of 2006, we contend that Travelers significantly altered its estimating policy in several markets, including New Jersey,” says Bryant. “The new policy resulted in non-payment or underpayment of several customary and required repair procedures.”
According to Bryant, AASP/NJ started receiving complaints from collision shops in September of last year. The complaints centered on Travelers not reimbursing, or not adequately reimbursing shops for materials and procedures necessary for complete and safe repairs. On some of the disputed items, Travelers acknowledged the need for the materials and procedures, but has contended that the items were fully reimbursed through the estimating program they were using, and therefore not required to be itemized and reimbursed separately.
Initially, it appeared to AASP/NJ that Travelers was inadvertently misinterpreting the Audatex estimating program and the proper application of the procedure pages within it. Over the past six months, AASP/NJ members cited many issues regarding Traveler’s application of the system’s procedures.
Issues such as the company’s handling of blending, primer usage, damaged salvage parts, flex additive and car cover repairs have been consistent among the members’ complaints. AASP/NJ contacted Audatex and they confirmed AASP/NJ’s interpretation of the program was correct, while Travelers’ interpretation was inaccurate.
“Travelers’ role as an insurer is to promptly pay for necessary repairs,” says Bryant. “It’s not within their right to arbitrarily decide which items to pay for and which items not to pay for. It’s not within their right to pay a $3 ‘allowance’ towards a repair item with a value of $20.”
AASP/NJ feels Travelers is operating under the assumption that the repair shops will perform operations regardless of whether Travelers under-pays or does not pay for these items.
“Left unchecked, what will prevent safety items from being left off estimates in the future,” asks Bryant. “Or even wheel alignments, non-reusable suspension hardware and tire balancing?”
AASP/NJ then began a series of conversations and e-mails with Travelers in an attempt to resolve the issue. Responses from Travelers varied, depending on the level of management AASP/NJ dealt with, according to Bryant. At lower levels, Travelers said the issue was a repair-side misinterpretation of how the Audatex database works. At higher management levels, Travelers said they are committed to fairly reimbursing all required repair operations, that there is no formal company policy driving the estimate items in dispute, and that the issue may be the result of a few inexperienced appraisers, and would therefore be best addressed at the local level.
AASP/NJ then learned that the issues weren’t limited to New Jersey. Thus, they joined with the Society of Collision Repair Specialists (SCRS) and the Washington Metropolitan Auto Body Association (WMABA) in an effort to resolve the issue with an even higher level of management within Travelers.
On March 20, representatives of Travelers, Audatex, AASP-NJ, SCRS and WAMBA participated in a conference call intended to air out and to attempt to resolve the issues.
Some of the items in dispute involved differing interpretations of the Audatex estimating platform; specifically, operations that are lumped into a 0.6-hour first panel refinish set-up value. Bryant says it was made clear to Audatex that a more detailed breakdown of the subcomponents within this value could go a long way towards resolving some of these issues. But, says Bryant, Audatex was apprehensive towards providing more detail or clarification.
Travelers also stood by all their previous statements, while repairers present on the call were frustrated and skeptical, according to Bryant.
“First, repairers across several markets in several states have described unfair claims handling practices that are essentially identical,” says Bryant. “This would seem to imply that these estimating practices might be driven at levels higher than individual appraisers or even local management levels. Second, some repairers are expressing frustration at being unable to fairly negotiate these disputed items, even when getting local management involved.”
Bryant said Travelers appeared to make a commitment during the call to reinforce their policies with local management and appraisers as to its claims handling. The collision repair associations involved intend to monitor this situation closely until it is fairly and fully resolved.
“The increasing trend on the part of some insurers substituting ‘allowances’ for actual costs, and of simply not paying for some repair materials and/or procedures, is disturbing, and, in simplest terms, possibly fraudulent,” says Bryant.
In an interview with ABRN, Gerry Manuel, Travelers vice president of product development auto, gave his company’s thoughts on the situation.
“The teleconference call with SCRS was so we could address their concerns and, at the same time, clarify our policy for them,” says Manuel. “Travelers considers additional reimbursement for items such as flex additive, weld thru primer, seam sealer and car covers on a case-by-case basis. If a repairer can validate that additional materials are required to properly repair the vehicle, Travelers’ representatives take that into consideration during the appraisal process. Travelers’ philosophy is simply to pay what we owe according to the policy to return a vehicle to its pre-loss condition.”
