by Steve Krieps
Supplement: a part added to or issued as a continuation of a book or periodical to correct errors or make additions. – Merriam-Webster Dictionary
In the course of appraisal reviews, repair planning and the other services I am involved in, the one thing that seems strange is today’s supplement process.
It seems as though what was intended for a few missed items here and there has morphed into a tool to drag things out. To say it creates confusion and distrust is an understatement. One moment, you are providing a consumer an “estimate,” which is asinine by definition; the next, you are explaining how you missed $4,000 in additional damages. While you read that and think “No, that’s not what happened at all,” take a moment and think about how the consumer views what happened, not what you feel. And how does this save premium dollars if you’re an insurer?
Insurance appraisers (at times, in today’s environment) seem to be incredibly understaffed and under-trained and have created a claims process in which you write only what you can see…and then “we can just handle it with a supplement.” To a consumer it seems like no big deal, and at times, it almost makes sense. They hear, “Let’s just get the claim going. Go to any shop you like, and we will take care of everything after they show us any additional damages.” Sounds easy enough, right? (Additionally, when you send in a “supplement,” how are you documenting the process from initial estimate to supplement one or two, three, four and five.)
The 2023 Crash Course Report from CCC showed the highest supplement rates in recent years, with five percent of all repairable appraisals including four or more supplements; supplement as a percentage of total repair cost is hitting 40 percent. So, as an industry, are we really so bad at our job that we can only capture 60 percent of the actual damages in our initial “estimates?” The data would suggest yes; however, as I type this, I’m yelling yes – while knowing that, in some cases, what happens is a shop takes a car in, disassembles it, spends eight to 16 hours going through everything, photo documenting and researching procedures to put together a full repair plan to submit to an insurer on behalf of a policyholder or claimant. A rational mind would believe that, if that’s done, it would be one and done as it were. Right? Wrong! You explain everything to the vehicle owner, they understand and ask you to submit to the insurers on their behalf – which you do, sending them copies. After four to five days go by, what you get back is 15 to 20 percent more than what the insurer originally wrote, but all the other missing stuff is nowhere to be found. Not denied, not mentioned, just gone. So, now we supplement again? With most carriers funneling supplements through an online system they created, it always looks like you are submitting for NEW additional damages. So, whose fault does it appear to be?
It’s questions like these (and many more) that have me wondering whether the current system is designed to work or to intentionally fail. It also seems like efforts to help the collision industry are fueling the fire. How much is this costing your company versus ROI? I did not write this to offer answers. I have my opinions, sure, but more importantly, I hope that you take a moment and consider what I am really saying with the process I am following.
Want more? Check out the July 2023 issue of Hammer & Dolly!