“THE NEED FOR ON-SITE INSPECTIONS IN SUPPORT OF AUTOMOTIVE EXTENDED SERVICE PLAN CLAIMS ADMINISTRATION” Tom Powers Direc - PowerPoint PPT Presentation

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“THE NEED FOR ON-SITE INSPECTIONS IN SUPPORT OF AUTOMOTIVE EXTENDED SERVICE PLAN CLAIMS ADMINISTRATION” Tom Powers Direc PowerPoint Presentation
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“THE NEED FOR ON-SITE INSPECTIONS IN SUPPORT OF AUTOMOTIVE EXTENDED SERVICE PLAN CLAIMS ADMINISTRATION” Tom Powers Direc

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“THE NEED FOR ON-SITE INSPECTIONS IN SUPPORT OF AUTOMOTIVE EXTENDED SERVICE PLAN CLAIMS ADMINISTRATION” Tom Powers Direc

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  1. “THE NEED FOR ON-SITE INSPECTIONS IN SUPPORT OF AUTOMOTIVE EXTENDED SERVICE PLAN CLAIMS ADMINISTRATION” Tom Powers Director, Business Development Magoo’s Automotive Consultants, Inc.

  2. Purpose, Presenter, Magoo’s • Purpose: To highlight the “why?” and “how?” of vehicle inspections in support of auto warranty claims administration • Presenter: Tom Powers Director, Business Development • Magoo’s Automotive Consultants • 17 years in the vehicle inspections business • Tens of thousands mechanical inspections • A network of 4,000 skilled inspectors across the US, parts of Canada and other territories

  3. Auto Warranty Industry $9 Bil. / Year 3rd-Party $2 Bil. OEM $7 Bil. Automobile Warranties & Extended Service Contracts The Automotive OEM Warranty & Extended Service Contract Industry Source: SEC Filings, Warranty Week

  4. OEM Administrators • OEM warranty administrators have advantages – • Leverage through ongoing relationships • More established fees / service norms • Repair facility network (dealerships)

  5. 3rd-Party Administrators • TPAs are at a disadvantage – • Little leverage • Many one-off transactions • Across-the-board rates / service norms • Repair facilities that are motivated to maximize their repair revenue • Higher risk, greater potential for fraud, higher probability of inflated repair orders

  6. Needed: An Honest Broker • TPAs need objective, 3rd-party inspections conducted by highly qualified mechanics • Most adjusters are NOT mechanics! • Most decisions need to be made immediately – people are waiting! • Every claim represents a potential angry customer and/or legal liability • In a perfect world, each adjuster could meet with all parties involved to reach a fair and mutually agreeable conclusion • In a perfect world …

  7. ESP Administration:Orchestrating The Players • Car/Policy owner • Policy Seller • Administrator (Seller or TPA) • Repair facility • Insurer/underwriter • Inspection Provider

  8. This Is Not “Voodoo!” The inspection/validation process is about identifying factual evidence and documenting the “cause and effect” the facts reveal

  9. The Service – Fact Analysis • Mechanics report on-site to verify facts -- “cause of failure” and “extent of damage” • A written report with - digital photos … documenting the observed facts and the supporting expert opinion • Inspectors often call in “live” from the field, then secure, written reports are made available online within 24 hours

  10. The Product – Field Reports

  11. “Deny, Deny, Deny” Why not simply deny claims and put the burden of proof on the consumer? • Negative press • Bad news travels fast – especially via the net • State Depts. of Insurance: fines/sanctions • Litigation

  12. Denial Companies … • They come and they go … • Mostly they go! • Sound business practices and repeatable standards lead to longevity and a solid reputation in the ESP administration industry

  13. Best Practices • Establish Inspection Guidelines/Standards • Standardized Claims Validation Process • Utilize an unimpeachable 3rd-party Inspection Service Without a total commitment to claims validation integrity, the process breaks down!

  14. Inspection “Triggers” • Dollar amount ($1,000 +) • Suspect Claimants (numerous claims) • Unknown/suspect repair shops • Suspect administrators (internal fraud) • Random testing for quality control

  15. Why We Inspect –In their own words … • Quantifiable Savings - $400 for each $100 spent on inspections • “Soft Savings” – reduced litigation, fewer customer disputes • Supports the ability to make quick decisions – customers are waiting! • Builds a knowledge and experience base for handling future claims and designing new warranty products

  16. Inspection ServicesFor Other Industries • Quick lubes • Insurance companies (garage policies) • Lease return / financial institutions • Consumers-to-Consumer (via Carfax) • Manufacturers • Home warranty inspections, etc. We provide eyes, ears, expertise, and a digital camera -- on site!

  17. Right For Your Industry? • What’s the value of the average claim? • Owned, leveraged, known or unknown repair facilities? • High potential for inflated repair estimates? • Is the warranty highly prized in your product’s/service’s value proposition? • Do claims administrators need to make “on-the-spot” decisions over the phone?

  18. What’s Around the Bend? • Live cams/reports via hi-speed wireless • GPS confirmation of locations • RF Tags • The sky’s the limit!

  19. Q&A