2016-2018 WACTAL BOARD of DIRECTORS
President
Larr y Terrien, MJ Collision Center larr y@mjcollisioncenter.com
Vice President
Mark Williams, Williams Auto Body mark@williamsautobody.com
Secretar y Ronnie Goss, Goss Auto Body, Inc. ronnie@gossautobody.com
Treasurer
Sue Black, Dean’s Auto Body suzieq@deansautobody.com
Directors
Eileen Haberman, Glen's Auto Body, Inc.
Mike Miyagawa, M & M Auto Body Inc.
Michael Taylor, Zimbrick Chevrolet-Sun Prairie
Tracy Black, Dean’s Auto Body, Inc.
Association Administration
Sue Peterson wactal@execpc.com / info@wactal.com (800) 366-9472
Lobbyist
Jolene Plautz jplautz@aol.com
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PUBLISHER
Thomas Greco (thomas@grecopublishing com)
SALES DIRECTOR
Alicia Figurelli (alicia@grecopublishing com)
CREATIVE DIRECTOR
Lea Velocci (lea@grecopublishing com)
EDITORIAL DIRECTOR
Joel Gausten (joel@grecopublishing com)
EDITORIAL / CREATIVE COORDINATOR
Kristen Dalli (kristen@grecopublishing com)
OFFICE MANAGER
Donna Greco (donna@grecopublishing com)
www.grecopublishing.com
ADVERTISER’S
A Call for Complaints
WACTAL lobbyist (Jolene Plautz) met with Wisconsin Insurance Commissioner Ted Nickel to address concerns that have been brought up by our members Those concerns included: Snap/photo estimating, suppressed Labor Rates and insurer prevailing rates, failure to pay for required and/or necessary repairs, steering and timely processing and payment of supplements.
Consumers are reluctant to file complaints with the Insurance Commissioner out of fear of cancellation and/or increased rates. Nickel is aware of this misconception on the consumer ’s part, and is open to receiving complaints from collision repair shop owners/managers on behalf of our customers
Those in the industry have been well aware of these issues for a very long time Convincing someone outside the collision repair industry of these issues is
why we need your help Now is the time for your voice and your customers’ voices to be heard WACTAL is looking for complaints from you and your customers Complaints should be sent to the WACTAL office. They will be accumulated and submitted to the Office of the Commissioner of Insurance (OCI) collectively. A very simple complaint form can be found on page 15. Feel free to use this form. Dates, times, what was said and by whom will be helpful, as will any supporting documents, such as copies of email correspondence. Take this opportunity to speak up. If we don’t hear from you, we will assume that you have no problems or issues with insurance companies NO COMPLAINTS EQUALS NO ISSUES!
Larr y Terrien WACTAL President
Recruit-a-Member Program
For each member an existing WACTAL member recruits, the sponsoring (existing) member will receive a one-time $50 credit toward their membership dues. There is no limit on the number of members an existing member can recruit. If the dollar amount of the credits exceeds the sponsoring member ’s annual dues, the excess amount will carry forward to subsequent years.
No monies will be paid out and credits cannot be cashed out. Credits cannot be split amongst multiple members. The sponsoring member ’s individual and business name must be listed on the new member ’s Application for Membership as the sponsoring member.
If the new member had been a WACTAL member during the prior calendar year, no commission will be allowed.
This program can be rescinded or amended without prior notice. In the event the program is rescinded or amended, credits for applications received after the change will be processed under the new program. No credits will be issued if the program is rescinded.
KB Body Shop
Merrill, WI
K B B o d y S h o p h a s b e e n a M e r r i l l , W i s c o n s i n s t a p l e f o r
m o r e t h a n 5 0 y e a r s ( 5 3 t o b e e x a c t ! ) . E s t a b l i s h e d i n 1 9 6 5 b y
R o m a n K o e b e , t o d a y t h e s h o p i s r u n b y R o m a n ’ s s o n , J a y
“ I g r e w u p n e x t d o o r t o t h e s h o p a n d h u n g o u t t h e r e
e v e r y c h a n c e I c o u l d ! ” K o e b e s h a r e d .
A s a f a m i l y b u s i n e s s t h a t h a s b e c o m e a n e i g h b o r h o o d
m a i n s t a y, K o e b e s a y s t h e c r e w a t K B h a s n ’ t c h a n g e d m u c h
o v e r t h e y e a r s . M o r e i m p o r t a n t l y, i t i s t h e i r h a r d w o r k a n d
d e d i c a t i o n t o t h e s h o p t h a t h a s m a d e i t s o s u c c e s s f u l f o r
m o r e t h a n f i v e d e c a d e s
“ I ’ v e h a d v e r y l i t t l e t u r n o v e r. M y P r o d u c t i o n M a n a g e r
S t e v e r e t i r e d a c o u p l e o f y e a r s a g o a n d w a s h e r e f o r 4 5
y e a r s S t e v e a n d o u r O f f i c e
M a n a g e r Te r r i h a v e b e e n v e r y
v a l u a b l e t o t h e s h o p Te r r i h a s
b e e n h e r e a l m o s t 3 3 y e a r s O n e o f
m y p a i n t e r s – D o u g K r e i e – h a s
a l s o b e e n w i t h m e f o r 3 3 y e a r s ”
H a v i n g b e e n i n b u s i n e s s f o r s o
l o n g , K B h a s c e r t a i n l y e x p e r i e n c e d
a c o n s i d e r a b l e a m o u n t o f c h a n g e
o v e r t h e y e a r s W h e n i t c o m e s t o
a t t r a c t i n g n e w c u s t o m e r s , K o e b e
s a y s h i s a d v e r t i s i n g s t r a t e g i e s
h a v e d e f i n i t e l y b e c o m e m o r e
t e c h n o l o g i c a l l y - a d v a n c e d .
“ I t h a s c h a n g e d o v e r t h e
SPOTLIGHT
by Kristen Dalli
g u i d e l i n e s c l o s e l y t o b r i n g e a c h v e h i c l e b a c k t o f a c t o r y
s p e c i f i c a t i o n s b e f o r e c u s t o m e r s l e a v e t h e s h o p .
W h i l e f o l l o w i n g O E M g u i d e l i n e s i s c e r t a i n l y o f t h e u t m o s t
i m p o r t a n c e i n t o d a y ’ s i n d u s t r y, K o e b e a l s o s a y s t h e s h o p
o f t e n “ a t t e n d s I - C A R c l a s s e s a n d p a i n t c o m p a n y t r a i n i n g ” t o
f u r t h e r k e e p u p w i t h t h e t r a i n i n g d e m a n d s o f t h i s e v e r -
c h a n g i n g i n d u s t r y
L i k e m a n y WA C TA L m e m b e r s , K o e b e u t i l i z e s m a n y o f
t h e r e s o u r c e s t h e a s s o c i a t i o n h a s t o o f f e r, a n d g a i n s t h e m o s t
f r o m i n t e r a c t i o n s w i t h f e l l o w s h o p o w n e r s
“ I j o i n e d WA C TA L s o m e t i m e i n t h e ‘ 7 0 s . O v e r t h e y e a r s , I
h a v e b e e n t o m a n y WA C TA L s e m i n a r s a n d t r a d e s h o w s , m e t
Jay Koebe
y e a r s , f o r s u r e O u r w e b s i t e a n d F a c e b o o k h a v e r e p l a c e d
s o m e o f t h e s t a n d a r d m e t h o d s w e u s e d t o u s e . ”
K B h a s n ’ t s e e n t e c h n o l o g i c a l c h a n g e s j u s t i n t e r m s o f
a d v e r t i s i n g , t h o u g h T h e c o l l i s i o n r e p a i r i n d u s t r y i t s e l f i s
c h a n g i n g a t a r a p i d p a c e , a n d t h i n g s a r e u n q u e s t i o n a b l y
d i f f e r e n t t h a n t h e y w e r e 5 0 y e a r s a g o
“ W e ’ r e p r o b a b l y g o i n g t h r o u g h t h e b i g g e s t t e c h n o l o g i c a l
c h a n g e s r i g h t n o w, ” K o e b e s a y s . “ S a f e t y s y s t e m s o n v e h i c l e s
n o w r e q u i r e s c a n n i n g o r a r e s e t o r p r e - a n d p o s t - r e p a i r s c a n s
– j u s t t r y i n g t o g e t p a i d f o r t h o s e t h i n g s W e ’ r e l o o k i n g a t a
c o m p a n y n o w t h a t c a n d o i t r e m o t e l y. ”
W h e n i t c o m e s t o K B
’ s s p e c i a l t y, K o e b e s a y s t h e s h o p
h a s a l w a y s f o c u s e d o n c o l l i s i o n r e p a i r O n e q u i c k l o o k a t
K B ’ s w e b s i t e , a n d t h a t s t a t e m e n t h o l d s t r u e . T h e s h o p
f o c u s e s “ o n t h e h i g h e s t q u a l i t y r e p a i r a n d c u s t o m e r s e r v i c e , ”
a n d e n s u r e s t h a t e v e r y t e c h n i c i a n f o l l o w s t h e m a n u f a c t u r e r ’ s
o t h e r s h o p o w n e r s a n d l e a r n e d f r o m
t h e m . A n d f e l t b e t t e r f i n d i n g o u t t h a t
t h e y h a v e t h e s a m e i s s u e s I d o ”
K o e b e , l i k e m a n y s h o p o w n e r s
n a t i o n w i d e , e x p r e s s e d c o n c e r n o v e r
t h e l a c k o f t e c h n i c i a n s a s o n e a r e a
h e ’ d l i k e t o s e e WA C TA L t a c k l e
m o v i n g f o r w a r d . “ I n o u r a r e a , n e w p e o p l e
c o m i n g t o t h e i n d u s t r y i s l o w I t
w o u l d b e n i c e i f [ WA C TA L ] c o u l d
s o m e h o w p r o m o t e t h e i n d u s t r y i n
t h e h i g h s c h o o l s a n d h a v e y o u n g
p e o p l e t h a t a r e n o t p l a n n i n g o n
g o i n g t o c o l l e g e g o i n t o a t r a d e , l i k e
c o l l i s i o n r e p a i r S h o p s c o u l d d o i t t o o , b u t i t ’ s h a r d t o f i n d t h e
t i m e . ”
M o v i n g f o r w a r d , K o e b e i s h o p i n g t o p a s s o n K B ’ s t o y e t
a n o t h e r g e n e r a t i o n – w i t h a n e v e n g r e a t e r a s p i r a t i o n
“ I a m w a i t i n g f o r m y s o n t o j o i n m e a n d s t a r t t a k i n g t h e
r e i n s s o I c a n r i d e o f f i n t o t h e s u n s e t ! ”
F o r K o e b e , h i s y e a r s i n t h e c o l l i s i o n i n d u s t r y w e r e a l l b u t
d e s t i n e d f r o m h i s c h i l d h o o d . H o w e v e r, h i s p a s s i o n f o r h i s
w o r k i s a s s t r o n g a s e v e r
“ T h e b u s i n e s s h a s b e e n m y l i f e f o r a s l o n g a s I c a n
r e m e m b e r. I , l i k e m a n y s h o p o w n e r s , l o v e c a r s – w o r k i n g o n
t h e m a n d s a t i s f y i n g c u s t o m e r s s o t h e y r e t u r n
“ I t a l k t o s o m a n y p e o p l e t h a t d i s l i k e t h e i r w o r k p l a c e o r
o c c u p a t i o n . I j u s t h a v e a l o v e f o r m y j o b . B e i n g m y o w n b o s s
h e l p s ! ”
WAN
2018 WACTAL Conference & Trade Show Educates and Engages
by Kristen Dalli
WACTAL’s 2018 Conference and Trade Show provided attendees with a jam-packed weekend of industry-leading speakers, networking opportunities and lessons in relaxation WACTAL members flooded the Wilderness Lodge in Wisconsin Dells on February 16 and 17, eager to return to their shops on Monday morning with the knowledge and tools to be more successful business owners going forward
To kick off the day on Friday, attendees were treated to “A Day with Mike and Friends,” hosted by Mike Anderson of Collision Advice As the most talked-about event of the weekend, WACTAL members raved about Mike’s presentation, and he hit on a variety of topics that are currently of great interest to the collision repair industry Anderson’s signature energetic persona was in full effect for the entirety of his presentation, as he spoke of warranty vs liability, the importance of following OEM recommendations, how first notice of loss (FNOL) is changing from insurance companies to OEMs, business
succession and more!
“I really wanted to hear Mike Anderson,” noted Greg Wubben, auto collision and refinish instructor at Southwest Wisconsin Technical College (Fennimore) “He is considered an expert on management and repair procedure requirements, and I’ve read about him in trade magazines and watched videos of him online. By coming to Wisconsin, he was able to answer questions from shop owners in our area.
“[Anderson] made me realize that our industry is going through the largest change in its history We are faced with not only what I-CAR calls a “technical tsunami” – a huge increase in new materials and electronics – but also the need to perform pre- and post-repair scans and retrieve OEM repair information for the tasks we perform in the shop We have used manufacturer data before, but Mike showed us that it is needed in many more areas than before, and the ways using this data properly will ensure the car is repaired properly.”
Following Mike’s presentation, Wubben signed up to receive more information and materials from Mike’s website (CollisionAdvice.com), and has used copies of previous presentations in class with his students. Wubben credits the WACTAL conference with opening his eyes to this information.
“The draw was Mike Anderson,” echoed Daniel Biggs of Rick’s Auto Body (South Bend, IN) “His insight into our industry is very valuable and we were able to make great connections at the conference.”
Anderson’s presentation also featured results from his “Who Pays for What?” surveys, and the ways in which the Great Lakes region compares to other areas of the country. Additionally, he brought several special guests from I-CAR, asTech, Enterprise Rent-A-Car and Stat-Gun, all of whom spoke on the latest technology and the state of the industry.
“My shop manager Andy and I came back to our shop
Mike Anderson presents “A Day with Mike and Friends”
the following Monday and immediately made some important changes to our business, and we have seen almost instant results,” shared Luke Walz (Poynette Auto Body, Poynette) “What we learned from Mike made us realize how we had been losing work we had historically been getting. He opened our eyes on how to communicate with insurers. We discussed I-CAR training, evaluated some of the procedures regarding scheduling and follow-up and talked of the importance of vehicle scanning – all in an eighthour class!”
Saturday’s featured speaker was Erica Eversman (Vehicle Information Services), who presented on the Conference’s main themes: Repairer Liability: Truths, Fallacies & Reality, and provided attendees with an eyeopening and informative session
The biggest takeaway from Eversman’s session? “YOU are the professional repairer ” Eversman repeated the phrase throughout her talk, reinforcing this idea with all in attendance that no one else can take responsibility for how a vehicle is repaired. Providing a safe and proper repair on each and every vehicle that enters the shop is of the utmost importance.
Eversman’s presentation covered the realities of the hidden dangers of vehicle technology, improper repair methodology and shops’ liability. As a frequent speaker and knowledgeable industry source, Eversman drew on her years of legal experience to discuss the recent John Eagle Collision case, as well as several other lawsuits that have severely affected the collision repair industry.
“I’ve never heard Erica Eversman speak, and I was very interested in doing so,” shared Bob Gibson of Total Auto Body (Grafton). “To have highly valuable industry experts at an event so close to home was a no-brainer to go to. [Eversman] offered great insight into what is going on in our industry from a legal and liability standpoint, and provided ways [for attendees] to take control of their businesses.”
“I really enjoyed Eversman’s talk,” said Acuity Senior Commercial Underwriter Marci Post (Sheboygan). “It was beneficial to me from a council point of view, as she spoke about insurance carriers’ claims payment methods and their interactions with auto repair shops. [This session] provided great information I can share with our internal team to help be the best carrier possible for the auto repair industry I look forward to continuing to work with WACTAL and am excited about future conferences and meetings!”
New for the 2018 Conference was Laura Lee Lotto’s two presentations on wellness: Balancing & Managing Stress with Essential Oils and Cleansing Your Life with Essential Oils As a health and wellness coach who also has a background in nursing, Lotto explained to attendees how therapeutic-grade essential oils can aid in reducing stress, keeping calm, and improving your sleep and overall
Erica Eversman
wellbeing. Both sessions were informative and educational, leaving participants feeling calmer than when they walked in
WACTAL’s Trade Show, which had hours on both Friday and Saturday, provided an opportunity for vendors and attendees to interact and learn about new products.
“It’s always good to talk to the people that are so important to your business,” Walz offered “It’s good seeing them in a much more relaxed environment than during the daily grind. I enjoy the conversations I have with other shop owners and managers from around the state There’s so much that can be learned from people as passionate as I am about our industry ”
Laura Lotto at the 2018 WACTAL Conference & Trade Show
Ask MIKE What are Some Ways that a Shop Can Determine a Realistic Retail Labor Rate?
This month, we ASK MIKE to discuss ways that a shop can determine a realistic retail Labor Rate We at Wisconsin Automotive News hope you find this following exchange useful, and we encourage you to reach out to us if you have a question for Mike on this or any industry-related matter that he can answer in a subsequent issue
Wisconsin Automotive News: Since you have the benefit of working with shops all over the country and seeing how different facilities operate, what do you see as some of the primary things that they should keep in mind when they’re looking to develop a rate away from whatever arrangement they may have with an insurer?
Mike Anderson: The first thing that really amazes me is how people raise their Labor Rates When I had my shop, I saw people raise their rates by $2 I’d say, ‘Where the heck did you come up with $2?’ They seemed to grab this fictitious number out of the sky to determine their rates, and it didn’t make sense at all What I would do was look at the profit I would need to make so I wouldn’t have cash flow problems Then, I would look at the equipment and training I would need to invest in over the year I would also ask myself a series of questions Were there any upgrades that I needed to make to my computers? How much did I need to spend on I-CAR, OEM certification and other training? Did health insurance go up? Did my utilities trend upwards? That way, I would figure out how my expenses would increase for the next year I developed a spreadsheet that would track my sales and my gross and net profits. If I wanted to make the same net, I would have to determine how much my sales would need to increase to offset any costs I had for equipment and other things That was how I came up with my Labor Rate I can tell you that I never, ever
came up with just a flat $2 amount for my Labor Rate to go up; it was always a number like $2 53 or $4 89 I based it off of my specific shop Another thing that always amazes me is property taxes What are the taxes in your area versus a place that’s two or 20 miles down the road? Everybody should determine their prices for doing business in their specific area
As I travel the country, I see a wide range of Labor Rates In San Francisco, I’ll see a Labor Rate of $95 or more, and I’ve been in some shops up in Vermont, Maine and Massachusetts that are still in the $35-$45 range In the Midwest, it might be $70 What I will say is that I do see a wide variety of repair times What is hypothetically a six-hour dent in one area might only be a two-hour dent in California because of the higher Labor Rates In a lot of my classes, I have people bring in estimates and photos of damaged vehicles, and I see what they charge for repair time Those repair times do vary quite a bit around the country, and some of that is influenced by Labor Rates
Also, I think your aluminum rate can’t be this fictitious number. It needs to be based on how much you invested in training and equipment, how many of those vehicles you think you’re going to fix over the lifespan of that equipment and what you think you need to make for your return on that investment Your goal is not to make back the money you spent on that equipment; a smart business decision might be to make about double that investment Obviously, that needs to be calculated based off of knowing your gross profit Aluminum rates will vary based on the OEM; some people have more money invested in training and equipment for one manufacturer than they may for another. When you study your aluminum rate, you need to decide from a business standpoint if that rate is going to be just on structural repair or if it’s going to be a different rate for something like R&I-ing a door
handle or a bumper
There’s also paint labor time Is your paint labor going to be the same rate as the aluminum, or is it going to be just your regular door rate? Too often, people just post this generic Labor Rate without taking their various costs into consideration.
I also believe you can’t just walk in one day and raise your Labor Rate In fairness, you need to give anybody you interact with or do business with some type of notice I used to send out my Labor Rate letter every October, and it would say that my new rates would be effective that January 1
There are a lot of people who will disagree
continued on page 17
Mike Anderson is an Accredited Automotive Manager (AAM) and the former owner of Wagonwork Collision Centers, two highly acclaimed shops located in Alexandria, VA He has served as a member of many industry organizations throughout his career, including the WMABA Board of Directors, the Mitchell Advisory Board, the MOTOR Advisory Board, the ASE Test Review Committee, the National Auto Body Council, the Collision Industry Conference and the Society of Collision Repair Specialists Additionally, he is a past Virginia SkillsUSA chairman, serves as a facilitator for Axalta Coating Systems’ highly recognized Business Council 20 Groups in both the US and Canada and facilitates numerous courses for Axalta Coating Systems’ Educational Series He currently offers expert industry consulting via his latest venture, Collision Advice (collisionadvice.com)
By Tom Slear
Where Will All the Adjuster s Go?
What’s become scarier than a mesh parachute?
Earning a living as a claims adjuster.
According to a recent issue of Bloomberg Businessweek, the probability of technology replacing claims adjusters is nearly 100 percent Only cashiers, telemarketers and bookkeepers are more at risk
The culprit is automated appraising, oftentimes referred to as touchless estimating, and more robust software will lead to fewer adjusters In the process, the time from accident to estimate will compress drastically What typically took days has already shortened to hours, sometimes even minutes, and with the advent of artificial intelligence, it will shrink to seconds Meanwhile, adjusters will join elevator operators, secretaries, and gas station attendants in the ash heap of labor history
The guided photo estimating applications now in place are merely the first step of this evolutionary process. Opinions of how this has worked so far vary widely Insurance companies see nothing but blue skies, and who can blame them? According to a Mitchell white paper published last year, photo estimating of low severity claims ($1,500 or less, which represent roughly 40 percent of all claims) increases productivity of adjusters by a factor of as much as five The cost per estimate when compared to the conventional approach of inspecting the car in person drops from $250 to $60, the kind of savings that prompts insurance executives to salivate. Allstate has been so taken with the notion of pictures replacing human inspections that earlier this year it announced the impending doom of many of its drive-in stations
Perhaps more important to insurance companies than the savings is how smitten car owners have become with the process. What better way to handle claims than with the most ubiquitous and irreplaceable electronic device of the 21st century?
“Consumers are doing everything on their smart phones,” says Jack Rozint, Mitchell’s
vice president of repair sales and service “There’s a feeling that they are in control. That’s the reason why it is gaining so much popularity ”
The other side of this savings and popularity is performance Are estimates initiated by photos enhancing accuracy?
Not surprisingly, none of the five insurance companies contacted for this article – State Farm, Allstate, USAA, Liberty Mutual and Travelers – would agree to an interview about photo estimating Ask any 10 insurance adjusters (or shop owners, for that matter) the estimated cost of repairing a specific vehicle and you’ll hear 10 different numbers That’s the nature of estimating, with or without photos, and no company in any business relishes talking about one of its inherently imprecise operations
(Liberty Mutual and Allstate did provide brief comments Liberty Mutual said it emphasizes with insureds that its Express Estimate produces only an “estimate of damages ” Allstate said that since its QuickFoto is relatively new, the company “wants to collect more data to have a more complete picture of how the process is working ”)
Shop owners aren’t nearly as reticent.
“I know when I take photos and go back to my desk to write a sheet, I have to go back out and look at the car even though I have photos right up there on my screen,” says Rick Starbard, owner of Rick’s Auto Collision in Revere, MA. “Photos just don’t duplicate the personal inspection.”
Leonardo Rodriguez, owner of Autoworks Collision Center in Lynn, MA, recently had a late model foreign car in his shop The initial estimate from Commerce Insurance consisted of two photos and $800 Rodriguez wasn’t sure whether to laugh or cry. The damage was substantial, both internal and external, and went way beyond the damaged bumper cover and other minor replacements in the estimate The insured had been driving the car blissfully unaware of several obvious safety hazards,
the most noticeable of which were an inoperable latch for the hood and damaged headlights. Rodriguez called, and Commerce promptly dispatched an independent appraiser The final repair came to $7,200, nearly 10 times the photo estimate
“No good,” Rodriguez says “[The customer] shouldn’t have been driving that car It should have been towed.”
“Photo estimating certainly gets the ball rolling quickly,” says Nick Kostakis, former AASP/NJ president and owner of Angelo’s Auto Body in Irvington, NJ “But always in an inaccurate direction As a general rule, photo generated estimates produce lowball numbers When a car owner comes in here with a photo estimate, it’s just a starting point ”
The starting point for a Ford Explorer that an owner recently drove into Kostakis’ shop was $4,000 based on photos It left after $23,000 worth of repairs
“There are three things wrong with photo estimates,” Kostakis says. “They are invariably inaccurate, they are misleading and they create a false sense of security I can tell the customer, ‘You should not be driving that car ’ The same with the adjuster That doesn’t happen with a photo estimate ”
The present phase of photo estimating is passing, and accuracy should improve. Apps are already incorporating software that guides car owners more stringently; for example, correcting them in real time if they attempt to take pictures from the wrong angle or in bad light. However, the best hope for photo estimating to reach its full potential of accurate and almost instantaneous assessments of damages will come from artificial intelligence, which is fast becoming the electricity of the modern era A subset of AI called deep learning will be the key component of photo estimating. CCC recently introduced a sample called Smart Total Loss, where the repair/total loss decision is derived from a picture On the surface, the process appears simple no more complicated than a board game
“We provide the system with a bunch of
photos, and whether the outcome was repair or total loss,” says David Bliss, CCC’s senior director for product management. “With time, it begins to recognize similarities, and it gets to the point where it can predict whether the loss is total or repairable with a high degree of accuracy Of course, the technology behind this is where all the sophistication comes in.”
Deep learning simultaneously performs and learns, much in the same way as humans Every time we ski down a hill or practice a foreign language, we learn, setting us up to do better next time This technology learns by reviewing mountains of data –whether photos, voices, or numbers and eventually, patterns are detected and conclusions are drawn Input is evaluated and it instructs, something akin to another run down the ski slope In this way, deep learning stays current
It’s tough to say how deep learning will play out with photo estimating The extreme notion is by-line estimates complete with parts numbers prepared automatically (no man in the loop) by insurance companies
Rozint foresees a “template” with the lines of the estimate complete, whereupon “the body shop makes adjustments and then is ready to order parts ” Bliss says CCC has already had success with indicating which damaged parts need to be repaired and which need to be replaced, but he doesn’t believe ordering the parts will be part of the scenario anytime soon.
“Going touchless isn’t necessarily a great thing in all situations,” Bliss says Instead, the goal is to make the human touches that remain “more efficient, more engaging and more digital ”
Starbard is skeptical. “Maybe their artificial intelligence is better than my real intelligence If it happens, I will take a peek at it ”
Rozint, who was once the general manager of a shop, has heard similar sentiments from many other shop owners He understands how distasteful it can be to have a machine’s expertise matched with a repairer ’s experience
But, as he asks, “Would you rather have to deal with a human who is not as experienced as you are, not as skilled, and have him make a judgement he is not so good at, or a machine that has been trained over thousands and thousands of claims and millions of photos and does it accurately?”
No matter how perfect, deep learning doesn’t resolve the issue of car owners driving unsafe cars, nor does it diminish the
inevitable distrust shop owners have of systems sprinkled with insurance companies’ fingerprints. On a scale of concern from one to 10, AASP/NJ’s Executive Director Charles Bryant ranks photo estimating in any form a 10 “Nobody wants to stand in the way of
Ask MIKE
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with me, but I was never one of those people who had a posted Labor Rate and collected less from an insurance company I just had a posted rate, and that was what it was. My rate was my rate whether you were a consumer or an insurance company It never made sense to me to have two different rates
I think looking at your material rate is equally important I’ve seen some areas of the country where a paint and material rate is $40, while it’s $28 in other parts of the country. At the end of the day, those products have the same list price It’s important that shops make
progress,” Bryant says “But there is a fine line between what works and what doesn’t. This is just a way for insurance companies to save money on the backs of shop owners ”
sure they know what their costs of business are with paint and materials, especially with these new codes that are coming out.
One of my top three favorite books is called Matsushita Leadership In the book, Matsushita says that if you take society’s people and society’s resources and you fail to make a profit, then you’ve committed a crime If you do make a profit and you don’t improve conditions in society, then you’ve committed an even bigger crime People trusted you to come work for you, vendors have chosen to give you a credit line, a bank has loaned you money, someone has agreed to rent to you – whatever the case may be. You have an obligation to make a profit. ‘Profit’ is not a dirty word!
Ser ving Northwest Wisconsin
