National General: 'Recommended,' 'collision,' inspections among concepts that 'jam up' insurers

Three concepts “jam up” insurers over bills for collision work, a National General claims executive told the Collision Industry Conference a week ago.
Two are questions of semantics, Industry Relations Committee Co-Chairman Jonathan Chase explained during an discussion of ADAS and trust in the virtual CIC Jan. 20. The third involved the necessity of inspection procedures, he said.
The discussion gives shops — and OEMs — a sense of areas that might require additional consumer and insurer education to prevent headaches for that repairer and consumer.
For after the day, the store must still follow OEM repair procedures or risk liability, and the customer is the one actually on the hook for the shop’s bill. An insurer’s hesitation to reimburse the client for several operations doesn’t alter these realities.
‘Collision’
The first issue: “What is a collision?” said Chase, the National General director of claims process and centralized service. If airbags deploy, an automobile needs a scan, he said. But if a motorist hits a rubbish bin and scuffs the bumper nowhere near a sensor, Chase’s staff finds it hard to know why a scan is necessary, he said.
He said he felt insurers would have to use automakers and information providers to figure out how to “define collision within the spectrum of all accidents.”
Some OEMs may have already helped out the industry on this front. For example, Subaru in 2021 managed to get clear in a position statement that a collision meant “damage that exceeds minor outer body panel cosmetic distortion” — a clarification lauded by Collision Hub at another recent CIC. Honda has carried an identical definition in a scanning position statement for a long time. Other automakers may have provided similar clarifications in positions or any other OEM repair instructions; you’ll need to check.
‘Recommended’
Another problem for insurers involves “recommended versus required operations,” Chase said.
“We all know when it’s required, its pretty much slam-dunk,” he continued. “We have to pay it off. It’s not optional. Let’s go get it done.”
But if an operation is “recommended” — particularly on the lower-severity claim — “people ask lots of questions about that stuff,” he explained.
“And they’re not looking to get from it,” he continued. They want to make sure the information justifying it might be “valid,” he said.
Defining “recommended” would be something he thought insurers and shops will have to work with OEMs on, he said.
We asked Jan. 20 why the term “recommended” was a problem. Why wouldn’t a recommendation from the company that built the vehicle and tested the repair procedures be followed?
“I believe that’s a great call-out for you to be skeptical of … on nastier hits” like one by having an airbag deployment, he explained. “If it’s recommended, we ought to get it done.”
He said the struggle was whether this put on every accident. Would the trash can hit resulting in a 0.5-hour dent require a steering column inspection. “I believe that people would question why we pay it off,” he explained.
Chase said he told staff “when spent insurance money the way you would your personal,” a great decision would ensue. “I would like these to ask: Can you want this for the car?”
He said sometimes, this might lead to them asking, “‘Do I really need this?'”
Insurers need to comprehend what is behind the spirit of an OEM recommendation and work with an OEM to know whether it applies to every vehicle strike or simply instances of a “significant impact,” based on Chase.
Then, the issue becomes, “Exactly what does significant mean?” based on Chase.
A need exists for definitions, he explained.
Collision industry experts have described the term “recommended” as synonymous with “required.”
“Those aren't 'recommendations,’” then-I-CAR industry technical relations director Jason Bartanen said of OEM procedures in 2021. “Those are service specifications.”
Collision Advice CEO Mike Anderson observed in 2021 the term “recommended” might reflect the culture of some Asian OEMs.
To say something was required could be considered “demeaning” and “rude”; you would defer towards the “politest” method of saying something, based on Anderson. For example, in Japan, a recommendation by one's boss or father will be a command, he explained then.
Erica Eversman, a lawyer specializing in collision repair, in 2021 warned shops the concept that an OEM “recommendation” is just a suggestion is incorrect.
“Consider it a requirement whether they've used that word or not,” Eversman said throughout an August 2021 “Repair University Live.”
OEMs refer to it as a recommendation for “legal reasons,” Eversman said then. In a May 2021 interview with us, she explained that it is due to the Magnusson-Moss Warranty Act; calling them requirements would force the OEMs into various warranty obligations underneath the law.
But for a shop's purposes, “you can pretty much equate that with a standard,” she said then.
“When you read it – you should read that as 'requirement,’” she said.
Inspections
Finally, there’s dependent on inspections. Chase said National General had recently seen a substantial rise in shops performing inspections.
As he put it: If someone hit that rubbish bin, were all those inspections required? How would it's documented? “What do we need to take a look at?”
Chase said the notion of “‘Do no harm to a car'” is yet another stumbling block. The fewer things altered throughout a repair “is generally for that better,” he said, calling this a “bias I have.”
In an instance of the trash can-driveway impact, he explained his staff would ponder whether removing seats and inspecting the steering column would be the right move for the vehicle. They’d ask if it was in the spirit of what the OEM would like to see happen, he explained.
He said this is something which needs collaboration on what documentation would smooth the process between shops and insurers.
Shops and insurers interested in inspections and circumstances triggering them have a new chance to get answers for one OEM. Subaru covered the topic of inspections inside a virtual Society of Collision Repair Specialists OEM Collision Repair Technology Summit course released in November 2021. That video class and more than twelve other classes from the virtual Repairer Driven Education series will be readily available for replay through Aug. 31, 2021.