May 15, 2015—Risk Point, a company which insures auto dealership, recently introduced a new estimating model for hail damage repair as a way to control increasing premiums and deductibles.
Risk Point said this will also help eliminate damage payouts that far exceed the actual cost of repair, a longstanding problem in the industry.
In 2014 alone, it was estimated that hail damage payouts surpassed actual cost of repair by at least $250 million. Risk Point said that roughly 90 percent of hail damage is repairable by paintless dent repair (PDR) methods. PDR has become extremely common and with improvements in the processes and a large increase in the number of PDR vendors, the actual cost to repair has been reduced substantially.
The insurance industry, however, has continued to pay losses based on an estimating guide that is over 10 years old. This has caused payouts to dealers of almost twice the amount for which the damage can be repaired.
Risk Point said it has built a new estimating model after conducting an extensive study of actual PDR costs with several national vendors. To ensure shops are able to obtain repairs and the new matrix cost levels, Risk Point has partnered with several national vendors that have committed to service performance and guarantee that their work will be within the new payout structure.