Insurance Fraud

Comment

Comment by Bob Smith on April 23, 2010 at 9:14am

Wouldn’t you know it, just as I post a comment on fraud, I get a call from a source in the Midwest that they had a conversation with an adjuster who said “His supervisor told him from now of if a repair is not scheduled they are not to write any r&i's or blends”.
Now this is what I was talking about before. Many will claim “not our company policy”, “isolated instance” or my favorite “rogue adjuster, we can’t watch everyone all the time”. Give us a break; this adjuster got the idea from his supervisor and his supervisor from somewhere else, either intentionally or unintentionally.
The repair industry is held to a standard where they are not allowed any “rogue” employee mess ups so why are the insurers not?
Ok, I see my friends in the insurance industry running down the road with the rope and boards but they, just as we have to, face up to the fact that there are instances where the adjuster is carrying out company policy while mahogany row is trying to maintain plausible deniability .
This really puts the kabosh on the good that some companies are trying to do. Yes, insurance industry after spending many years on your side, I will defend you where needed, but those whose policies of operation may differ from what they speak have to face up to the reality that there is no defense for “short sheeting”. It is called unfair claims practice…the statement the appraiser made is blatant unfair claims practice. In his expertise, he knows the items are needed and he is taking advantage of a consumer who in all likelihood has no idea that these items are needed in the repair.
What compounds the matter is if a shop goes along with it they become involved in the same conspiracy whether they are DRP or not for that company. It also puts the shop in a position of lying to their customer first and technically committing a fraudulent act. Look at the definition of fraud, you can find it listed on various industry web sites or straight from a legal web site. The one biggie in this scenario was intent.
Back to my friends in the insurance industry running with the rope [hope its good quality nylon]I will stand beside you on the fact that not all companies take an approach like this and try to be fair on the preparation of estimates and what they pay for. From time to time, we may disagree on items but that is the nature of the beast…these bumps get worked out…its part of being in the industry.
You as a business person must make the final decision how you handle these matters but remember according to the PCI spokesperson “The repairer is the final authority on the parts and labor it takes to fix the vehicle”.
Repairer this means the reason you do something is not the important thing…it is that you do it…or not, you are the one responsible.

Comment by Bob Smith on April 21, 2010 at 11:08am

Well the age old question of “fraud” has been brought up in connection with catastrophes. The video that Collision Hub has posted refers only to homeowners, but it could just as well be auto.
While we would have to admit what is depicted does happen, what we don’t see is what happens from the insurer side.
We would have to stipulate that many consumers and even some repairers do try to take advantage of the situation of a catastrophe. But it seems very strange no one takes a look at the things done by insurers and their selected field appraisers in preparing damage appraisals for repairs to vehicles. I am limiting my comments to vehicles from the standpoint that is where I have spent way too many years.
A high percentage of the estimates seen by repairers are only a fraction of what the repairs should actually be. It is a given that everyone, no matter who it is, will miss an estimate item now and then. So what do we do when there is a pattern and practice developed that the estimates prepared by appraisers (they may be insurer or repairer acting on behalf of an insurer) are considerably (you pick the percentage) short of the actual damage. Is the consumer not entitled to be compensated for his loss fairly? Not a figure put out there for settlement purposes only hoping that “maybe they won’t get it repaired”. This was a statement once made to me by a company supervisor in instructing our company what they expected on their estimates of damage. Doesn't it say in the policy they are entitled to a reasonable amount to complete repairs?
From being in the industry for so long and devoting much time to the issue of fraud in the industry, I think it is only fair that we mention that there are improprieties committed by the insurer and those that work on their behalf in catastrophes that are just as bad as what is depicted in the video lest everyone thinks fraud is only committed against the insurer.
As in any industry, both sides have their bad apples, and they are not always what are thought of as the bottom feeders. The consumer deserves to have the contract of insurance honored without consideration of whether he fixes his vehicle or not. Fortunately, many insurers and repairers feel this is so and act appropriately, but and it is a big but and all too often seen, this often does not happen.
It is up to those repairers and insurers that believe in acting fairly to do so and help weed out those who would use their expertise (which could be unfair claims practice) to take away something from the less knowledgeable consumer that they have paid for and have a right to.