VSCAC 2012: Inspections, Claims and Parts

At this year’s Vehicle Service Contract Administrators Conference, I served as the moderator of “Claims, Cost Savings, Methods, Parts and Inspections,” a panel P&A Magazine convened to discuss the past, present and future of the complex relationship between claims administrators, inspection companies and parts providers.

The panel included L’Tonya Carr of Carr Appraisals, EFG Companies’ Alex Drasil, American Auto Guardian Inc.’s George Krnich, George Laurie of LKQ Corp., and Mitch Rand of C&K Auto Parts and Warranty Inspection Services.

We began by discussing how the industry has changed for each side of the equation over the past five years. Carr said it has become common for inspectors’ reports to include causes for internal engine conditions when they should stick to the facts, for example, “sludge due to lack of maintenance” rather than “sludge present.”

Krnich agreed that determining cause of failure can be a major sticking point, and will likely remain so, and Drasil added that it is often difficult to get inspectors to hone in on specifics when asked to do so. Laurie noted that one cause could be a lack of expertise: Automotive technology is advancing at the same time that many of the industry’s best techs are retiring.

Rand and Carr agreed, and Rand noted that the pressure to provide faster, better and easier-to-read reports is coming to bear at a time when automotive technology is becoming increasing harder to decipher. He said there are political and customer-service aspects to consider as well, saying the only times he has to contact Krnich and Drasil, for example, are the times when dealers insert themselves in the equation.

Drasil reminded the crowd that, when an inspector is working in the field, the level of customer service he exhibits reflects upon the claims side as well as the inspection company. To that end, each of the panelists agreed, to some extent, that some sort of inspector certification program could be a positive development for the industry.

That led to a question from an audience member: “How does an inspector remain independent?” Carr, Rand and Laurie each tackled the question, agreeing that independence remains an important, if “very difficult,” goal, in Rand’s words. Laurie said that the time when individuals had to be licensed in each state in which they worked, often as “independent liability adjusters,” had passed. Carr said that left today’s inspectors to work under their own guidelines to remain unbiased.