Photo-estimating gains traction among insurers while shops are skeptical
Whether it’s for navigation, tracking the weather, or getting up-to-the-minute updates from social media on what your friends and family are having for dinner, it seems “there’s an app for that” for any number of activities on smartphones. To many shop owners and managers’ chagrin, more insurers have embraced applications used by their customers to quickly upload photos of their collision-damaged vehicles.
Shop staff report that the photo-estimate app dollar figures are often low, since not only do they reflect just the damage that can be seen, but the insured is unskilled in what damage to look for and skillfully photograph. And customers, lured by a quick direct-deposit check for a minor damage, may be tempted to never repair their vehicle.
But as was discussed in a recent webinar, “Photo Estimating: the Good, the Bad, and the Ugly,” hosted by Dave Luehr for his Elite Body Shop Academy with Bodyshop Booster CEO Ryan Taylor, the apps are increasing in popularity, with about 38 percent of insurers currently using them, and all companies are considering them.
So why are apps becoming popular with insurers? Insurance companies benefit in several areas, said Taylor, whose company offers photo-estimating apps designed for shops. Insurance companies make most of their money through investments, not from premiums. Because typical state laws require an insurer to put into escrow 10 times the amount of the estimate until the claim is closed, that is money that cannot be invested and earning profits. Traditional claims take 30 to 60 days to close, while a photo app can shave that time down to about 2.4 days, leaving that money available for investment, he said.
Another “pain point” for insurers is personal injury claims, and the quicker a claim is closed, the less likely a customer will file an injury claim. And once the claim is quickly paid through the app, customers often treat the repair more like a customer-pay repair, requiring fewer supplements (and money) from the insurance company. Insurer-paid repairs have a supplement rate of about 66 percent, while customer-pay repairs have a supplement rate of only 8 percent, he said.
Because of this, Taylor, who is the former owner of a chain of eight body shops, advised that shop owners use a script such as, “I’ve got your VIN, and I’ll use that to look up your vehicle info., but to save some time, did you by chance use an insurance estimate app to make a claim on this damage?”
Use photo apps to triage damage, qualify customers
“You can no longer accept a 10-minute curb-written estimate,” Luehr said. “You’ve got to focus on getting the waste out of your administration.”
Using a guided photo app such as the one from Bodyshop Booster to qualify a customer can eliminate “tire-kickers” and other time-wasters for a production-minded facility, such as cash-outs, rust repairs, and restorations, Taylor said.
He classifies collision repairs into three categories by the number of repair hours required: up to 12 hours, 12-28 hours, and 28 hours and up. The shop estimator can typically write estimates with great accuracy for minor repairs, but for the second and third categories, which make up 56 percent of repairs, the idea is to notify the customer that you suspect hidden damage and to ask to schedule a teardown and repair plan. Taylor said customers who’ve had an estimate done by photo app are more likely to follow through on bringing their vehicle to the shop. Bodyshop Booster’s research indicates customers will travel only five miles for an estimate, or 15 miles in a rural area.
“But the same customer will travel two to three times further for repairs than for estimates,” he said.
Taylor recommended that shops have a CSR contact a customer with an app estimate request within 10 minutes, and try to process the estimate and schedule an appointment within hours to “capture the keys.”
Chris Jones, owner of Precision Collision Center, with two locations in the Kansas City area, said he’s been using the Bodyshop Booster app for more than four-and-a-half years. He promotes the app on social media and his website, and customers use it as often as four or five times a week. He said Precision uses the app as a sales tool to get the customer to come in for a thorough estimate if the damage appears to be more than a minor door ding or scuff.
“If we receive a request through the app during normal business hours, we get on it and get something handled on it within an hour or two, either an estimate written or the customer contacted to schedule an estimate appointment,” he said. “Hopefully, that gets us to the customer before they get steered someplace else.”