If you’ve been paying attention to your legislature, or you’ve attended a recent CIC meeting, or you’ve seen FenderBender’s extensive coverage of the issue, then you probably know about the rising relevance of photo estimates.
You also probably know the opponents believe it is unsafe to judge damage through a photo, and the proponents argue for the time savings to shops, insurers and consumers.
And even though Tony Ferraiolo knew the ins and outs of this trend, it didn’t quite prepare him for this moment: a photo estimate produced by a customer. For this particular accident, a driver’s photo led to a $600 estimate from an appraiser, when the damage was really around $4,000.
Many insurance companies have begun to employ their very own customers as photographers, says Ferraiolo, owner of A&R Body Specialty in Wallingford, Conn., and president of the Auto Body Association of Connecticut. In particular, Allstate’s QuickFoto Claim mobile app feature has been sold as a convenient, time-saving option—while also catching many shop owners by surprise. At this point, Ferraiolo says 15 percent of his customers are producing photo estimates.
While driver-produced photographs could merely be a trend, it could also easily become the norm, Ferraiolo says. That’s why it’s important to understand why it’s happening, where it’s happening, and how it could alter the estimating and negotiation process.
The Driver’s Photo
While Allstate declined to speak with FenderBender, the company’s website provides an explanation for QuickFoto Claim, which is intended only for “minor accidents” (although it does not specify to the driver what a “minor” or “major” collision claim constitutes).
"The QuickFoto Claim feature of the Allstate mobile app helps you get paid quicker so you can get back to normal faster,” the description reads. “After a claim is filed and submitted, a claims team member will determine if your claim is eligible to use QuickFoto Claim.”
The driver is instructed to take photos of the entire vehicle and the damaged area. The app also instructs drivers on how to properly align photos for appraisers.
The Dwindling Profits
State Farm’s auto underwriting loss widened from $4.4 billion to $7 billion between 2016 and 2017—but Ferraiolo says that’s only the tip of the iceberg. Those losses can be found all around the insurance industry, and it’s triggering the rise of customer photographs among companies like Allstate, Nationwide, USAA and MetLife.
One method for alleviating those diminishing profits has been restructuring and streamlining the appraiser’s role in the estimating process, which means reducing the number of adjusters and utilizing more technology to cut costs, says Aaron Schulenburg, executive director of the Society of Collision Repair Specialists (SCRS).
Not every company has an app like Allstate. Ferraiolo says many of them ask drivers to email photographs to appraisers.
The Campaign Against Customer Photos
Tony Ferraiolo has utilized the reach of the Auto Body Association of Connecticut and taken to the airwaves. To see how he addressed the danger of photo estimates with an area television news team, check out this video:
The Growing Popularity
It’s important to know where your state stands on photo estimates as they gain popularity, Schulenburg says. After the passage of House Bill 1638, Pennsylvania became the 46th state to allow photos or videos in the appraisal process. But as those laws continue to be amended and altered, he says they could either become more stringent or more lax. Schulenburg himself contacted the Delaware Department of Insurance on behalf of SCRS regarding an amendment to Title 18, Regulation 602, which would have laxed regulations for photo appraisals.
In addition, the appeal of photo estimates has caught on well with the actual drivers, Ferraiolo says. The J.D. Power 2015 U.S. Auto Claims Satisfaction Study states millennials are the most likely to submit photos for an appraisal. Ferraiolo also claims that a majority of drivers taking photos at his shop are, indeed, millennials.
“I get the appeal: You don’t have to leave the house. You can take photos at home and get a check in the mail,” he says. “Insurance companies are preying on that, especially with the younger generation, with these technological services. To them, this might become normal—and it shouldn’t be done that way.”
The Potential Ramifications
With the addition of customer photos, Ferraiolo believes that negotiations could now heavily disrupt his estimating process by adding yet another step to the appraisal process, inevitably leading to further debate during negotiations and increased cycle times.
The biggest issue is that customers aren’t trained to take photos that properly identify damage. With the example noted at the beginning of the story—where a $600 estimate turned into a $4,000 one—the situation could have potentially led an unsafe vehicle on the road, Ferraiolo says.
“I physically took the bumper off the car for the customer and showed the damage behind the bumper,” he says. “The exhaust system was damaged, and the sensors for lane changes were impacted.
“With the complexity of these cars, it’s not a legitimate way of assessing the damages.”