TRAVELERS ESTIMATING ISSUES
Starting in September of 2006, AASP-NJ began receiving complaints from member (collision) shops regarding the estimating practices of Travelers Insurance. In simplest terms, the complaints centered on Travelers not reimbursing, or not adequately reimbursing shops for materials and procedures necessary for complete, safe and proper repairs. On some of the disputed items, Travelers was acknowledging the need for these materials and procedures, but was contending that these items were somehow fully reimbursed through the estimating program they were using, and therefore were not required to be itemized and reimbursed separately. Travelers uses Audatex to complete estimates.
The Specific Estimating Issues
1.) Blend within a repaired panel – When refinishing a repaired panel, the field staff is arbitrarily reducing the refinish time.
2.) Seam sealer and weld thru primer – Travelers is not fully reimbursing the labor and material cost for seam sealer and weld thru primer, incorrectly contending they are included in Audatex’ database labor for the replaced panel. In the example provided by the one shop owner, the field appraiser was willing to pay for the seam sealer but capped the amount they were willing to pay even though the shop provided an invoice for the amount used to repair the vehicle.
3.) Damaged salvage parts – The field appraiser refused to pay for repairs to the damaged salvage panel that Travelers specified which had numerous dents. When told that the panels had obvious visible damage to the consumer, the appraiser again stated that he had to meet his criteria or his boss would write him up. The repair facility didn’t repair the dents as directed by the Travelers field appraiser. As a result, the customer made a complaint. Unfortunately, the part in question and all the adjacent panels were needlessly refinished again once the part was repaired as the repair facility initially indicated as being necessary.
4.) Flex additive – Travelers is denying reimbursement for the labor and material cost for the flex, incorrectly contending they are included in the refinish time of the bumper in Audatex’ database.
5.) Car cover – Travelers is denying reimbursement for the labor and material cost for car cover, incorrectly contending they are included in the refinish time in Audatex’ database.
It first appeared that Travelers was inadvertently misinterpreting the Audatex estimating program and the proper application of the procedure pages within this program. The Audatex estimating program includes grouped and imbedded labor that is not fully itemized and therefore less than fully clear. We contacted Audatex in writing and the response we received confirmed our contention that our interpretation of the Audatex program was correct and that the Travelers interpretation was incorrect.
It should also be noted that the ambiguity within the Audatex estimating system is at least partially to blame for some of these issues. Audatex has been formally asked on more than one occasion to clarify some elements of their estimating program, such as providing a detailed, itemized breakdown of all labor included in their “first panel setup” allowance. Audatex has repeatedly denied these requests.
We then contacted Travelers’ management and began a series of conversations and emails in an attempt to resolve what appeared to be a relatively simple issue. We shared the clarification we had received from Audatex, and invited Travelers to provide documentation that supported their contention that we were wrong and they were right. At this level, Travelers was not denying that the disputed estimating practices were occurring, but rather that they reflected an accurate interpretation and application of the Audatex estimating system.
After a month of unsuccessfully attempting to resolve the issue at this level, we pressed the issue with a higher level manager at Travelers. We went through essentially the same exercise at this second level, again with Travelers promising to obtain and share with AASP-NJ, documentation supporting the validity of their position. At this level, Travelers management also indicated that their estimators were trained to fairly negotiate repair costs, and that these disputed items were negotiable at the shop level. We shared the fact that the feedback we were consistently receiving from our member shops is that Travelers was consistently refusing to negotiate these items in any way.
We were then made aware that this issue was not limited to the New Jersey market, but rather was also an issue in other regions of the Northeast, and that affected collision shops in these other markets were seeking relief through The Society of Collision Repair Specialists (SCRS). AASP-NJ and SCRS joined in their efforts to responsibly resolve this issue, which now involved a third, even higher level of management within Travelers. At this level, Travelers appeared less interested in proving their proper application of the Audatex program, and more interested in convincing us that the problem either didn’t exist, or if it did exist, would best be resolved at lower levels.
AASP-NJ was obviously frustrated and annoyed at this point after over four months of responsibly attempting to resolve the issue, or at least to engage Travelers in intelligent dialog. We insisted that Travelers either provide a detailed letter of clarification on these specific estimating issues, or agree to immediately participate in a conference call, with association and shop-level participation from several affected markets. Travelers finally agreed to participate in the conference call but to this date has stonewalled our repeated attempts to have it take place.
As a licensed repair shop, you have an obligation to fully repair vehicles entrusted to you by your customers. This includes application of all materials and procedures necessary for a complete, safe and proper repair. You are also entitled to be reimbursed the fair market value for these materials and procedures. If you are experiencing the similar problems with Travelers, we feel it is our obligation as a trade association to inform you of options that you may wish to consider.
You can accept the Travelers estimating practices without challenge, knowing that you may be less than fully compensated for the value of the materials and procedures that are a part of the repair.
You can calculate the total value of any non-or inadequately reimbursed items, and charge the policy holder separately for these items, explaining to your customer that the insurance company is unwilling to pay for these items to cover the full cost of repairs. You can also notify your customers that not all insurance is the same, and that they may have a more pleasant repair experience through other insurance carriers.
You can file formal complaint(s) with the New Jersey Department of Insurance. In the past, this process has been somewhat frustrating and nonproductive, but there is the possibility that numerous complaints filed on the same issue may produce results.
You can explain the issue to your customer(s), and have them authorize invoking the Appraisal Clause, which may exists within their insurance policy with Travelers. The appraisal clause, while sometimes time consuming, will almost surely result in more reasonable reimbursement of all repair procedures. Additional information on the Appraisal Clause process can be found on this website in the member’s only section.