If your auto body shop’s business model depends on income from total loss storage, you might desire to reconsider, an accident industry expert and a telematics provider recently suggested.
Technology allowing insurers to classify and redirect totals up front could stop what Collision Advice CEO Mike Anderson referred to as an income stream for collision repairers.
“As we see artificial intelligence enter into our industry, you’re gonna see less total losses end up in your shop,” he told an Oct. 29, 2021, Collision Advice-CRASH Network webinar.
It’s possible for artificial intelligence to recognize an overall total loss now by analyzing photos or drawing upon on telematics data generated by the crash circumstances themselves. Cambridge Mobile Telematics insurance Vice President Ryan McMahon, whose company are operating in the second space, told us Dec. 8, 2021, these two methods could be combined as well.
Anderson told the webinar that lots of non-direct repair program facilities draw a substantial portion of their profitability from total loss storage fees. He recalled talking to one facility who made $200,000 kept in storage charges each year. “That’s pure profit,” he explained.
At a DRP facility, totals really are a “hindrance,” Anderson said. They halt production, you “don’t get paid that much” for teardown, and also the DRP contract probably requires storage fees to be waived, he explained.
But in a non-DRP auto repair shop, “you most likely love total losses,” he explained.
For some insurance company, “it’s gonna save me money” to use AI and catch totals immediately, according to Anderson. Sending total losses to body shops first boosts the expense of losing by generating tow, teardown and storage charges. Additionally, it erodes the opportunity to recoup the loss if your vehicle is disassembled and for that reason commands a cheaper price . at salvage, he explained.
If a body shop depends on total loss storage for gross profit, “you best start considering how you’re gonna replace that,” Anderson said.
McMahon agreed, noting within our interview Dec. 8, 2021, when one’s business was based on storage, “you might want to reconsider.”
CCC has said that 20.2 percent of noncomprehensive appraisals between Oct. 1, 2021, and Sept. 30, 2021, involved nondriveable vehicles, and 21.2 percent wound up being totals.
COVID-19 has probably skewed these proportions upward by reduction of congestion and letting all of us drive faster and crash harder. However, CCC data for the same amount of time in 2021 still saw 19.6 % of vehicles flagged nondriveable and 19.6 percent of vehicles deemed totals.
We asked McMahon if Cambridge Mobile Telematics what food was in the stage where it might assess the likelihood of a vehicle being nondriveable or a total based on telematics data.
“It is,” he said.
Cambridge Mobile Telematics can collect driving data using a policyholder’s smartphone sensors alone or by having an “App+Tag” setup that also affixes a sensory device to the vehicle too.
CMT can predict delta-V, point of impact and amount of severity. McMahon said his company may also determine a rollover based upon the physics of the crash, also it can make use of an iPhone barometer’s air pressure measurements to find out if airbags have blown.
“We can tell non-driveable immediately,” McMahon said, describing basing such a conclusion around the fact the automobile hadn’t created a certain point or hadn’t moved in 10 minutes. If the vehicle didn’t proceed on its trip, it had been “certainly area of the story” relayed through the data, he said.
However, McMahon said insurers were generally required to convert a CMT severity score right into a prediction of a total, for the carrier may be the one with the make, model and year information necessary to assess if the vehicle was worth fixing.
“We don’t have the information ourselves,” he said. Sometimes it does, but mostly those facts are using the insurer, he said.
For newer cars, such a determination is “a bit more tricky,” but CMT’s physics data combined with the insurer’s specific vehicle information allows carriers to construct out toolsets to calculate totals.
And while CMT has got the technology to calculate total losses based on telematics, there’s still a matter of “tuning it” to individual insurers, based on McMahon. They all have its very own threshold of repairability. There’s not a universal standard, he explained.
McMahon didn’t see photo AI total loss prediction as a threat to telematics AI total loss prediction. Instead, he described the market as offering a “great opportunity to combine the two.” Telematics data coupled with photos “makes it even smarter.”
“It’s just information,” McMahon said of both methods. A former property damage adjuster himself, McMahon described collecting multiple types of information and evaluating them against the policy because the job of insurance.
