Communication is key when working with insurance, HD Repair Forum panel says

Updated Apr 26, 2024
A panel discusses insurance claims at the HD Repair Forum.

Communication is the backbone of a successful insurance repair, a panel at HD Repair Forum said Wednesday. 

Moderated by Mark Polzin, president and owner of Budget Truck and Auto, the panel included Rick Melcher, director of service for the body shop at Rush; John Spoto, director of collision for Premier Truck Group; Leo Nenortas, field operations manager for collision centers, Penske Truck Leasing; and Kelly Reich, home office claims manager for material damage, Federated Insurance. 

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Communication starts with intake. 

"We're a public company, so of course we have a two-page document prepared by our legal department," Melcher quipped. "Our write-up sheet is real extensive and it works well in case we have to be in front of a judge somewhere." 

But he worries it's not communicating efficiently with the customer. Especially about who's paying, which the panel agrees should be worked out before the first technician picks up the first wrench. 

"We love to repair vehicles," Spoto says. "But I've gotta get paid." 

It could be the customer wants to pay for it themselves and not involve insurance. But Federated Insurances' Reich says the company needs to be involved anyway. 

"It may come out of pocket in the end, but we still need to be involved," he says, and that's because there's a lot of different kinds of insurance policies out there. Furthermore, there could be some liability involved in the loss, such as an injury. Not only could that get the shop in trouble because now, the vehicle is evidence. 

"If you talk to us ahead of time, it helps protect you, too," Reich says. "We insure a lot of shops, too." 

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Even if the customer doesn't divulge their carrier, Reich says a shop can find it by looking up the vehicle's owner through the FMCSA. Most entries should have a history of insurance policies listed. That can help a shop make sure they have all the parties correctly identified for the loss. 

Talking to the insurance company also means discussing not just repairs, but also direction to pay and keeping track of appropriate documentation, as well as a thorough understanding of the insured's deductibles and limits. 

"We communicate directly with the customer and we talk to the insurance company," Melcher says. 

The down time involved in thorough communication can get people riled up, he adds. "I've had owners come up and throw a $30,000, $40,000 check on the desk and say, 'There's your authorization.'"

But to get started would be a mistake, Spoto says. 

"If that authorization is not properly administered, you put yourself in the liability of repairing a vehicle that hasn't been agreed upon." 

Documentation is key even years after the repair is complete. Reich says it's not the case anymore where the last person to touch the truck is called into court. Now it's the person prior to that and the person prior to that, he says. 

"You're all getting pulled into the courtroom," Reich says. Thorough documentation, properly kept, can be a shop's saving grace. 

"Protect yourself, protect us, and work together as a team," he says. 

Reich encourages shop owners to verify the direction of pay before releasing the repaired truck, even if there's already a signed direction to pay on file. Direction of pay is the authorization for the insurance company to pay the shop directly. That's because the insured can rescind that order with the insurer at any time. It's a short phone call that can save a lot of headache, he says. 

"Before you release that truck, check with the owner and the insurance company to make sure the direction to pay is still good," he says. 

Some of the panel members say they also ensure payment by taking upfront payment.

"I'd rather have at least 50% of that money up front to make sure before I begin," Spoto says, adding most of that money goes to buy parts. 

Melcher says Rush also requires 50% down for vehicles of a certain age. They also have the truck appraised to protected themselves and their customer. 

There are even options in the event of a total loss. If the customer doesn't want to lose the vehicle, Reich says the insurer might agree to a repair lock-in price. There are a lot of factors in a total loss; it's not just the value of the vehicle. Downtime and rental vehicles have a cost that insurers must consider, Reich says, as does depreciation and any improvements done to the truck. 

"It goes back to the communication with the vehicle owners," Reich stresses. "You're my customer, they're my customer, and we all need to work to resolve it." 

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