Cutting corners: Insurance claims hastened soon?

MANILA, Philippines – As the howling winds of Typhoon Basyang tore through Metro Manila last week, those of us who were traumatized by the Typhoon Ondoy experience were no doubt déjà vu stricken. A friend from Ford Philippines told me about how paranoid she was, having left her car outside the garage overnight as the storm raged (thankfully, her paranoia was unwarranted). Personally, I woke up to the sight of a makeshift fence resting on my next-door neighbor’s Chevrolet Optra. Shades of a past experience we’d rather bury and forget, no doubt. Prior to the Basyang experience, we at The Philippine STAR had been researching on the effects of Typhoon Ondoy on the car insurance industry. After the Luzon-wide blackout that Basyang brought to us, we felt that the story couldn’t wait another week to ripen.

Currently, there is a process that is followed by car dealerships that allows them to synergize their efforts with insurance companies where claims are concerned. Ever since the wrath of Ondoy, this process has hit a delay snag that has resulted in many an irate customer. You cannot fault the insurance companies, however. They need to be extra stringent to keep their businesses sustainable.

In a nutshell, here’s how the process goes… First, the customer takes his vehicle to the car dealership. Then, the dealership makes an estimate of how much the job will cost. Then, they call in the insurance adjuster who is tasked to determine if indeed the job requires the amount of work that the dealership says. After this, the car dealership and the insurance company go into negotiations. It is also during this negotiating process that all the necessary documents (like the police report, the insurance papers, etc.) are checked. Once the two parties agree on the cost of the job, a Letter of Authority (LoA) is issued by the insurance company (think of it as the go-signal). Only then does the work start.

Post-Ondoy, you can imagine how much stricter the insurance companies have become with issuing an LoA. Given the realities we are all faced with, the negotiations can take anywhere between one to two weeks. If an insurance company is really looking to cut corners, they’ll even go so far as to canvass parts on their own, in turn extending the negotiating process even further. As a result, negotiations can last all the way up to three weeks. That’s three weeks before any kind of work is started. This is private sector red tape at its worst…

We sat with Willy tee Ten, president of the Autohub Group, one of the country’s largest car dealership conglomerates, to ask if anything can be done about this seemingly insurmountable inconvenience. Turns out we picked the right subject to interview.

“In fact there is a solution that we are already looking to put in place,” Tee Ten said as we sat with him two days after Basyang’s fury. “The key is to use technology as an asset. We’ve proposed a system to our insurance company partners where a real time video streaming program can be set up in the dealership. This will be connected to their own office. We’ll have to agree on parameters like the kind of lighting, the number of cameras, etc. But the basic idea is to get a system working where their adjusters need not make personal appearances in the dealerships. Ideally, this will cut the time and cost of appraising and eventually hasten the issuance of an LoA. It works for both the dealership and the insurance company. Most of all, if we cut the negotiating time, it will get our customers’ vehicles back to them sooner. It will definitely cost us in terms of infrastructure, but it’s a win-win situation.” Tee Ten’s argument is that if they can show their customers that they can work faster, then these customers will happily come back to them for future jobs.

Sounds good, of course. But we can’t just take the dealership’s word for it. So we sat with Tony Castillo, Standard Insurance’s vice president, as well. According to Castillo, “The online system is something that can and should be done. It is, in fact, about time we used technology to benefit our businesses and consequently, our customers. This kind of system is bound to shorten the time for both inspection and repairs. Unnecessary delays can be avoided, provided the system and its parameters are sound. We are, in fact, working to get such an online system in place by December. If things go well, by next year, we will have begun the program.”

Well and good, we say. Although, if we must put in our two centavos worth, we’d urge all parties involved to hasten the process further. The fact is, the sooner the entire insurance claim process is shortened, the happier the customers are. And there’s no better win-win situation than having a happy customer base at the end of the day.