The ultimate goal of the entire mechanical claims process is to quickly authorize covered repairs in a manner that is fair to the consumer, the repair facility, as well as the underwriters. All parties involved must work together to ensure that at the end of the process, the contract holder is completely satisfied, and is glad they purchased the vehicle service contract.
It has been more than 20 years since I started my career as a mechanical claims adjuster. As an adjuster, I have adjudicated every claim as if it were being done on my mother’s car. I wanted to make sure that the vehicle was fixed correctly the first time, and I didn’t want to see her taken advantage of through unfair pricing or unnecessary repairs. Most importantly, I wanted for her to be treated politely, professionally and with the utmost courtesy. I believe this is the manner in which all customers should be treated.
Measuring Effectiveness and Increasing Efficiency
In order to improve, first you must be able to determine the current state of your operations. Jeff Robinson, operations manager, Alpha Warranty Services offered several solid indicators that can be examined to measure a claim center’s effectiveness.
Accuracy – their attention to detail, and use of claim audits
Efficiency – the presence of a call center manager who closely monitors all operations and holds everyone accountable
Feedback – from customers and dealers
He recommends a strong focus on efficiency. He meets regularly with his team to discuss strategies for speeding up the claims process. Robinson promotes a policy he refers to as “one and done.” He explained, “We want to finish and authorize a claim during that first call with the warranty company. Claims are generally paid within an hour. Adjustors are held accountable for this both individually and as a group for meeting their goals.”
Frank Pfister, national claims manager, AUL, mentioned a common frustration during the claims process is the amount of time a vehicle stays in the shop, tying up a lift while waiting for an inspector to arrive or for a part to be shipped. “The inspection process typically takes 24-48 hours – most often 24 hours. It is important to know when to ask for an inspection. We train that we aren’t just inspecting vehicles to get the person off the phone. We want to make sure that they are doing an inspection for a reason.”
With some garages having only one or two hoists, or even less than one hoist per tech, inspection companies have to find a way to shorten the time frame from when we ask for an inspection, to when the inspector arrives. Everyone agreed that though inspections are a necessary evil; they should be used judiciously and be promptly scheduled.
Sometimes, thinking outside the box can prevent a situation from being unnecessarily held up. In unusual circumstances requiring more than two days for an inspection, Robinson experienced success moving the process along by requesting photos directly from the technician to confirm a failure.
Technology Integration and Parts Sourcing
Our industry needs technology integration that allows the adjustor to focus on the caller’s problem instead of hassling with the technology so we can stream line the claims processes. An example of this would be DMS integration. If a service department’s systems could talk to the administrator’s system, it would be a huge and beneficial step towards streamlining the process.
To improve efficiency, Pfister requests a quote for parts at the same time that he requests an inspection. Having a system that is integrated with vendors, allows for a request for a parts quote to occur at the beginning of a claim, rather than later. Doing this can help by shaving time off of the entire process.
Specializing in small parts, such as steering rack and pinions and AC compressors, Kevin Peltzer, senior account executive, Meridian Auto Parts works with more than 70 different administrators. He reports that more than a dozen of these administrators strictly communicate electronically, whether it be through email, text or through a chat portal. He has one customer who only sends forms via email – to which Peltzer’s team then replies with a quote. The forms and quote are then processed through the administrators company’s system and they then adjudicate the claim.
Providing multiple avenues for claims submission can be a real advantage. Pfister says, “We are testing a system with multiple repair facilities, that allows the repair shop to start a claim online. It gives them the freedom to go outside and help a customer and then come back to the claim. Because it gives them the freedom to go back and forth, it’s very efficient.”
The Makings of a Skilled Adjustor
In the past, most service writers seemed to be technically knowledgeable and were able to ask all the right questions. Today however, that is no longer the norm. There are many service writers with a minimal understanding of how a car engine works mechanically. No matter how you look at it, finding a mechanically skilled person with the best communication skills, or someone with a background as a service advisor, who also has good technical skills is not easy.
Robinson works with varying levels of adjustors, most of them ASE certified. However, he says the best adjustor can be a person who is a quick, logical thinker – someone who can talk to the technician and then successfully convey the information to the customer.
Mark Rau, vice president of operations, American Financial & Automotive Services, says the two elements that make up a good service writer are staying technically relevant and having good people skills. “Usually you’ve either got someone who is highly technical and you’ve got to spend time training them on their soft skills/people skills or, if they were a former service writer, they likely have great people skills but have some voids in their technical skills. You have to have both types of training to stay technically relevant. Whether it is a dedicated trainer or a supervisor whose job is to sit and coach – using the technology available to review calls is a great strategy to improve how they sound on the phone to customers.”
Developing good communication and a rapport with the person on the phone goes a long way, Rau added. “If the customer doesn’t get adequate, detailed information about why something isn’t covered, you are going to end up getting more phone calls. You need well balanced adjustors who can understand the coverage, the contract and the mechanical aspect, and can then clearly explain the specific details to the customer.”
On occasion, the service advisor calling in a diagnosis might not know the answer to your questions, so they seem like they are guessing, or telling you what they think you want to hear. When this happens, Pfister recommends speaking directly to the technicians to get the necessary information. “Proper diagnosis is very important. Adjustors must be trained to ask the right questions before we order the parts.”
Peltzer added that for parts companies, as well as for claims adjustors – there must be training that prepares adjustors to know the right questions to ask. “Ensuring those questions are open ended so the service advisor doesn’t just tell you what you want to hear is also important.”
When hiring adjustors, each individual’s skill set and professional background needs to be accounted for. Rau suggests tailoring interview questions based on each candidate’s resume. “Ask a master tech the people-skill type of questions and direct more of the mechanical questions to a former service advisor. Tailor the questions to cover each person’s weaknesses. Getting a recommendation from someone who worked with them in the past is also helpful.”
Communication and The Language of Claims
The way a contract is worded, how it is conveyed to the customer at they time they purchase the service contract, and their understanding of it, can’t be ignored.
Robinson explained the importance and obligation of the selling dealer to sell the contract accurately, and to communicate effectively with the customer. “If the customer thinks they have bumper to bumper coverage, then we are left to clean up the mess later. When a claim is denied, more than 90% of the time, the reason was because the failed part was not covered. Educating customers up front is critical!” Robinson also suggests having a specific customer service team in place that is trained to deal with customers when a claim is denied.
Pfister says any adjustor can run with a claim but it really comes down to the language used in the contract. “The contract states what is and is not covered. It is a level of trust with dealers and we base coverage off their diagnosis. We try to take the contract language and use it with the contract holder – that is what it’s there for. As long as you can communicate the contract language, usually you can walk away okay.”
By leaving notes in the system, any adjustor can follow through with a claim. This is particularly useful on larger claims that require more follow up calls. “All our adjustors follow each other and work together as a team,” says Pfister, “We have 24 employees with a large variety of mechanical backgrounds. The larger claims have the most eyes on them. By the time those large claims are adjudicated, three to four people have looked at them.”
A broad range of communication means is available to warranty companies today. Peltzer says he sees it all - from email to the old fashioned standard of picking up the phone. “Some companies will call us for a quote, put us on hold to ask the price from the garage, and will then come back to us to buy the part. Some even put the technician on the phone to see if they can match our price.”
Another important use of language is that which the mechanic uses to convey things to the customer. Robinson suggests for adjustors to assist the mechanic with how they can explain things to the customer.
Lack of communication with outside parts providers can result in unnecessary time to process the claim. Peltzer has experienced this as a result of an incomplete diagnosis or being given an inaccurate parts number or engine coding. Peltzer offered an air conditioner (AC) repair to illustrate. “AC plays a fairly large role in claims, especially during the hot summer months. You’ve got a repair facility that, according to the administrator, claims an AC compressor is only leaking, but when you talk to the service advisor, they say its locked up and has shed debris throughout the system. How can the claims adjustor ask the right questions without emptying the reserves?”
Claims advisors need to be properly trained and equipped/empowered to ensure that repairs are done properly the first time. Managing the communication between all parties to achieve this is foundational in achieving an overall effective and efficient operation.
Warranty companies have a duty to the underwriter to ensure the cost is reasonable and a duty to the customer to ensure the repairs are taken care of properly. It’s not the adjustors job to find out why a dealership has too high of a loss ratio. That needs to be left for risk management personnel to determine. We can’t adjudicate a customer’s claim any differently because that dealer’s loss ratios are too high.
A wise man once told me this: “The consumer purchases a piece of paper with words on it. Our promises, our professionalism, actions, words and commitment to customer service are what make that paper valuable. As VSC administrators, we must strive to show value in our products every day and treat our customers with the level of professionalism and courtesy that they deserve.” Maintaining a strong focus on our customers as well as maximizing efficiency and effectiveness in the claims process will bring successful and profitable operations for many years to come. When we can give the repair facility an unforgettable positive experience while satisfying all of the contract holder’s needs, we have truly reached the ultimate goal of the claims process.
