Online Claims – Today and Tomorrow

Until recently, there has only been one way to file a claim - make a call, talk to an agent, wait for approval  – and it could be an tiresome process. Today, however, in the age of technology, companies are looking to increase customer satisfaction and save money by offering online options when filing claims.

By giving dealers and customers the option to process a claim online, providers and administrators hope to deliver a better experience by streamlining what can be a tedious process. When a successful online method can be established, not only does it free customers from the time restrictions of operating during traditional business hours, it also reduces administrative time and lowers operating expense for the company - even if the customer only begins the process online.  And the ultimate goal of all providers is to deliver the best experience possible for the customer. To be able to do this while cutting administrative costs is giving everyone a reason to rethink the manual claims process.

The Challenges

One of the challenges providers and administrators face when implementing online claims is how to make the process easier and more efficient than the traditional method of picking up the phone and working with a representative.

Daniel Lievrouw, vice president of operations and IT, American Guardian Warranty Services, Inc., attributes this call center efficiency as one reason more dealers are not utilizing available online filing – “You can’t tell the dealer that they are going to save time, when they can call the 800 number and have the claim reported just as fast as they could type it. The only dealers who do use it are the ones who are already comfortable with the  technology because they are accustomed to using the online process with the manufacturer.”

George Krnich, vice president of claims and risk management, American Auto Guardian, Inc. (AAGI) says even with email, people don’t want to wait for a response.  If it isn’t instantaneous, the online process loses its advantage. “Our average speed to answer a call is 30 seconds and average call is under 3 minutes, so if we can’t make an online claim system faster and easier for the service writer, then they are just going to pick up the phone and call us… So we have to make it easier for them, or they aren’t going to utilize it.”

Lievrouw agreed, adding: If someone in the service lane simply can’t type well, but they know they can pick up the phone and in twenty to thirty seconds they can provide the information to someone on the other end of the phone, who can do all the typing for them and do it more quickly, then they would certainly choose to call, rather than use the online process.

Old habits tend to die hard. Overcoming human nature – the natural tendency to stick with what you know - seems to be another big challenge. Lievrouw explained that there isn’t anything preventing someone in the service lane from utilizing the ease and convenience of filing claims online, yet few dealers are utilizing this resource.  “Technology can’t be the excuse anymore. Five years ago, computers in the service lane were outdated and there was always a reason.  These days, dealers are spending money on the equipment, but people are so used to doing it the way that they’ve been doing it; it’s just habitual.”

Despite the number of dealers who are not yet taking advantage of online claims, Garret Lacour, CEO, RoadVantage, sees the industry moving rapidly towards paperless systems. “Increasing knowledge and comfort level is key to overcoming barriers to using new technology.”  Providing thorough training in the use of the technology is what Lacour sees as the means to getting more dealers onboard. To accomplish this, and to get users comfortable, they offer training through webinars, online tutorials, and printed materials guiding users step-by-step through the process.  Including the service drive in training is also a big component in getting everyone to embrace these offerings, says Lacour.  Not to mention the obvious benefits online claim reporting offers customers.

Another challenge providers and administrators face with online claims is the issue of privacy.  In order for a claim to be processed online, service writers need to access secure information.  They must have a means to securely look up information on the service contract  - to determine coverage, and to determine the contract has not expired. There have to be the proper safeguards in place so that protected customer information isn’t accidentally given out.  If a company is SSAE16 Type II certified, they are audited by an independent auditor on their methods of safeguarding customer information, as well as their claim adjudication policies and procedures. They must show that they meet strict requirements in this area. It is a labor intensive and time consuming process.

Krnich, whose company currently holds the SSAE16 certification, explains, “They dictate how you can adjudicate the claims. The problem is, we can’t have John Q. Public make up a name or some VIN number and have it populate the entire website with that information.”

Finding a way to integrate with the DMS, to prevent service writers from having to repopulate screen after screen with customer information, would be ideal, according to Krnich. It is something he says AAGI has been looking at for about a year. All parties would benefit if there was a way to have information pushed directly from the DMS and have it interact with our system to auto-populate a claim, he explained. You could then have an autoreply containing the approval number and an amount sent directly back to the customer. Currently, Krnich says, it is often easier for a service writer to pick up the phone, than to have to reenter all this information in a separate portal.

In the Future…

“As online claims become increasingly part of the status quo at dealerships, the industry is headed toward the one-step process, in which the service writer receives an instantaneous response with approval or adjudication status – so the service writer knows instantly what the next steps are. This one-step process will have a dramatic impact on customer service,” says Lacour, “The resulting benefits – quicker claims cycle times, faster payouts and the ability to check claims status without calling anyone – are tangible, and enable the service writer to focus on what’s most important: the customer experience.”

Customer preference will continue to play a part in the equation, as well.  There will always be people who simply prefer dealing with a person on the phone, regardless of how easy or efficient online claims become in the future.

For this reason, Krnich says,  “I don’t see [online claims] completely replacing the normal claim process, where you call in and talk to a rep, but it certainly has to be there as an option in the way to better serve our customers.”

Lacour, whose company is already using online claims for their complete line of ancillary products, says that despite the ease and convenience provided by online claims, they understand that change takes time. Their dealers know that they can still call or report claims through traditional channels – by picking up the phone. “While online service offers many benefits, it is still just one means to an end. At the end of the day, the most important aspect is the customer experience.”

While ancillary products may lend themselves more easily to the transition towards online claims, vehicle service contracts (VSC) are another story. With more complicated repairs, instantaneous approval may not be so easy to come by.  These larger, more involved claims are typically still handled in the same manner they have been dealt with for years.  So is the extent one offers online claims correlated with the type of products they offer?

Lievrouw, whose company provides both types of coverage, says they are definitely related. “It takes a technician to diagnose today’s new cars.  Its not like the old days where you’ve got a carburetor, eight spark plugs and a battery, and that’s it. Now everything is computer controlled.  The person in their garage can’t diagnose things like they could in the past. But when it comes to the appearance protection products, the customer can do that. They can tell you about a dent in the driver door, and describe that it is the size of a quarter.”  In fact, he says, they can do it so easily with the tools they provide, he doesn’t know why anyone wouldn’t use the technology.  “From a consumer’s standpoint, there is nothing more frustrating than calling an insurance company and waiting on hold.  If I can jump on my smart phone and file the claim then and there, and receive a response telling me someone is going to be here at a given date and time to fix a dent in my car, and even provide the repairman’s name – why would you not do that?”

So what does the future hold for claims processing? With most companies already offering some form of online claims processing to customers, online claims are sure to become more widespread as time passes.  Our experts agree that you can expect to see more offerings in the upcoming years, as companies are already targeting online claims as an area in which they want to move forward.  Companies only offering one type of claim online now will likely have many more areas under their belt in the next year or two, such as mechanical claims and GAP. Others, who are already fully immersed in online claims, hope to continue to improve speed and efficiency, and to increase user comfort with the entire process. This will be accomplished through training and by staying on top of the latest technology, in order to continue making the process as user friendly as possible.

Krnich describes the auto industry as a copy cat industry – once someone does something and others see the benefits, everyone else adapts to take similar advantage of the idea.  He thinks that once people see the benefits of providing online claims, many more will jump onboard.  “Basically, once you lay the tracks, I think everybody is going to be driving the train.”