Damage Appraisals: Get What You're Entitled to
Michael Towers, Hawthorne Estimating
In car rental the appraisal process is typically set up for the cheapest bid to win the right to repair the car. But this doesn't help the operator recover the highest amount possible under the law. There is a misconception that you can only collect what you pay to fix the car, which isn't true.
The rental company is entitled to recover all the parts and procedures necessary to restore the vehicle to pre-loss condition. There is a requirement for a rental agency to pass along all the discounts routinely available, such as parts and labor. However, you can choose to repair none, some, or all of the damages, and that does not change what the insurance company is required to pay. You don't need to prove your cost to repair, only what discounts you are receiving.
Often, what a body shop repairs and what a manufacturer recommends are different. For instance, with front-end accidents, body shops will pull and reshape frame rails instead of replacing them. Also, "skinning" a door will void the warranty. But insurance companies can't expect you to have a voided warranty or go against manufacturers' recommendations, so they are obligated to pay for an entirely new door or frame rail.
When it comes down to recoverability, an insurance company is not looking at a dollar amount threshold; they look for inaccuracies or deficiencies in the estimate. They don't care if the deficiency is in the insurance company's or the rental company's favor, they just need something to support their in-house review and subsequent rewrite of the estimate in a way that will support them in court. A detailed estimate supported by documentation and photographs is most important.
We write our appraisals to the manufacturers' design and repair specifications, as well as I-CAR's (Inter-Industry Conference on Auto Collision Repair) Uniform Procedures for Collision Repair (UPCR). Each model year, we buy the manufacturers' design and repair specifications manuals, while local appraisers simply cannot justify the cost.
In a recent audit for a local Los Angeles-based rental agency, out of 190 estimates written by Hawthorne Estimating, not a single estimate was challenged by insurers. In close to 25 percent of the cases, Hawthorne's estimates reached a threshold at which the carrier agreed to treat the claim as a total loss. This eliminated the loss the rental agency would have suffered at the time of sale, had it repaired and put the vehicle back in the fleet.