Two new things keeping auto clients in rental cars

Shortages of auto repair techs and specialized parts for newer cars are combining to drag out repair times for personal auto clients.

That’s causing delays for insurers looking to close out auto accident claims, plus it’s keeping more drivers in rentals for long periods while waiting for their claims to be resolved.

But there are two additional factors leading to repair delays, notes Jesica Ryzynski, a claims specialist with Mitch Insurance.

First off, there’s a shortage of adjusters to manage the claims.

“There are claims delays that are still happening because of a shortage of adjusters,” she tells Canadian Underwriter.

“I polled our various markets and asked, ‘Are you noticing this?’ The companies that were more adequately staffed are not noticing it as much as the ones that are really struggling with understaffing. [Those firms] were very quick to say, ‘Yes, we’re absolutely noticing this.’”

 

Spare scare

A second factor is insufficient supplies of aftermarket auto parts, which repair and body shops need to cost-effectively get clients’ cars back on the road.

While original equipment manufacturer (OEM) parts are in good supply, insurers rely on aftermarket parts to keep costs down — particularly when repairing vehicles with lower book values.

“When only OEM parts are available, later model vehicles aren’t eligible for them,” Ryzynski says. “The [insurance] companies, especially with these later model cars, are waiting for these parts to come in.

“Where a dealership may have that part available brand new, the company is not going to pay for it. They’re not required to, and the auto policy wording does explain that.”

That’s led to situations where clients who’ve been waiting a long time get frustrated and call local dealerships to ask if they have the needed part.

“Their local dealership is saying, ‘Well, we have it right here.’ It’s not in their best interest to explain to the client why the insurance company isn’t ordering that part from them, so they don’t.” Ryzynski says. “And then the [insurance] company will say, ‘Okay, we are still only going to pay based on the [aftermarket or] used part. If you want to pay the difference, you can go ahead and do it.

“That’s part of the problem, too, with this shortage of used vehicles and scrap vehicles out there, these parts just aren’t available.”

 

Feature image courtesy of iStock.com/Matveev_Aleksandr