Current Estimating Systems – Following the Money

I have not written for over a year but I had been thinking about getting back at it for many months. The very serious COVID-19 pandemic and shutdown has affected everyone, but we are starting to see attention being paid to the business of repairing cars.

This morning in RDN, John Huetter has an article about SCRS and Audatex feather, prime and block that then went on to discuss other issues with Audatex.

I had drafted most of the following last week for an internal discussion, but when I saw John’s article I realized that it was topical and relevant.

Money has a lot to do with almost everything.

An account rep for an estimating platform will sell very few (maybe zero) programs to repair facilities based on the virtues of his program. He will sell many copies of that program if it has been accepted and mandated by an insurance company. In fact he will, with very little effort, be able to sell a mediocre program to a repair facility if he has first convinced an insurance company to use that program.

The money is between the insurance company and the estimating platform company and it would be naïve to think that as the seller in the relationship the estimating company does not pay close attention to what the insurance company wants. 

There is an example from motorcycle training that the total traction demand on a front tire cannot exceed 100%. If 80% is being used for braking only 20% is left for cornering; if 100% is needed for braking there had best not be a corner in the equation. Following this analogy if the estimating company puts 80% of its energy into making a sale to the insurance company they have only 20% left for the repair facilities. As the sale to the insurance company will guarantee the sale to the repair facility 80% may be a low number. With the sale to the insurance company the amount of effort left for the repair facility is acceptable as that operator will have little choice about buying the program.

The repair side has to know that the program has been influenced by a group that would rather pay less than more. This means that the program will pay for the minimum required to get an acceptable repair. In many jurisdictions outside regulation is minimal so the rules of repair are effectively set by the buyer of that repair.

What does this mean for where we are now and the theme of this site, which is correct repairs? Proper repairs can be done, and they will be paid for, but the repairer who wants to do these proper repairs and get paid for them will have to present facts in a very clear and honest way. This takes time and for most of the industry it will be easier and more profitable to follow the procedures as presented, do what they are asked to do and get on with the next repair.

Movement will not come from the overall mass of the industry insisting on a better result, but from some number of progressive operators who have the knowledge and are willing to put in the effort to expand the circle of what is needed.  These operators will not be thanked for most of their work, but they will move procedures first to the accepted category and then to the expected. At that point they may see a monetary return, as they will be ready to do the expected, with proper equipment, staff and company culture while others are scrambling to catch up.