The Insurance Commissioner is looking for “things to add to my resmume that sound better than they really are”.
She should work in an agency for 2 months, especially a small agency. Putting Managed Competition and the new Assigned Risk Pool in place at the same time….bright idea. It makes so much sense that I should have to communicate with ALL the Insurance Cos in MASS even if I have only ONE (MAIP) policy with each of them. Very efficient… but I know that is not her concern.
The state plan’s increase is no surprise to anyone with an understanding of the economics of risk classification.
Step 1: Identify the low risk policies and offer them a cheaper rate.
Step 2: Watch as the market reacts to your rates — Sell policies to the low risks while your competitor retains the higher risks.
Step 3: Watch as your competitor has lousy results and has to raise its rates as a response.
Step 4: Find another group of risks that are lower than the competitor’s higher rates now reflect and repeat steps 1-3.
Earlier this week, Travelers of Massachusetts announced the opening of their second Concierge Claim facility, which promises, among other things, “a higher level of service.”
Travelers of MA makes promises that claim “Travelers of Massachusetts professionals will take care of every detail of your claim from start to finish. You simply drop off your vehicle and let us handle the rest.” It all sounds so warm and cozy.
So what’s the problem? Let’s take a closer look at some of the statements made by Travelers.
At the ConciergeCLAIM facility, a Travelers of Massachusetts representative will immediately greet you and offer to:
Inspect the vehicle and provide you with an on-the-spot estimate
The insurer does have the right to inspect your vehicle. We’re ok with that. But what is the on the spot estimate worth? Nothing. Insurance loss reserve estimates are regularly and routinely low balled and typically are about 50% of the actual damage. We’ll look at why in a moment.
Handle all rental arrangements on site.
Ok, but making a phone call to the local rental car office is not what I would consider a “higher level of service” All rental car companies will pick you up, drop you off, and bill your insurer, as part of this program or not. And if you don’t have rental car coverage, you’re out of luck.
Work directly with the shop to review the damage, monitor the progress of the repairs and handle all details and paperwork
Letting the insurer “work directly with the shop” is like the fox guarding, no, make that living, in the hen house. Handling all the details and paperwork is vague, and there is really nothing of value there. Ten to one odds they won’t fill out your police report for you.
Provide you with regular status updates.
I don’t know what they are thinking here, but I seriously doubt they will notify you when the aftermarket parts they are using don’t fit properly.
Quality check all repairs before you come to pick up your vehicle
You can’t build in quality after the repairs are complete. Quality control must be done during each step of the repair process.
Offer you a guarantee on all repairs for as long as you own the vehicle
While this sounds good, it’s the law, so you’re not getting anything extra here.
While my critique of the above statements may seem trivial, we’re just warming up. Traveler’s next web page Appraisal Procedures is where the spin really starts.
A Travelers of Massachusetts appraiser will conduct an initial (meaning preliminary or first) inspection of your vehicle and will provide a copy of the appraisal to you. You may take your car or truck to the body shop of your choice with your appraisal. The initial appraisal is for visible damage only and is not an authorization to repair the vehicle. Lets stop right here. All appraisers are required by Massachusetts regulations to “itemize the cost of ALL parts, labor, materials, and necessary procedures required to restore the vehicle to pre-accident condition” So, by their own admission, your Travelers appraisal is non compliant with MA regulations, and will require one or more supplements. If you elect to not repair your vehicle, expect your settlement to be worth 30 to 50 cents on the dollar.
Additional Damage/Supplements
If additional, related damage is found on the car that was hidden (what is this-hide and seek?) at the time of the original inspection, the body shop (or vehicle owner, or owners representative) should contact Travelers of Massachusetts. We will arrange to inspect (again) the additional damages and write a supplemental appraisal if necessary.
Total Loss
If your vehicle is a total loss, a claim handler will contact you to explain the settlement process to you. We may want to move your vehicle to a salvage facility, (so we won’t have to pay storage charges) and your cooperation is necessary to help get the vehicle released and have your personal belongings removed from the vehicle before it is moved. What they are not saying here is that, according to the Division of Insurance, they are responsible for storage charges until they make you a reasonable offer on your vehicle. Don’t give up your car until you know how much your going to get for it.
Salvage/Aftermarket Parts
As required by regulations that govern the appraisal process, your appraisal may include parts that are of like kind and quality as the original manufactured parts. The parts may be used or from aftermarket suppliers and are documented on your damage appraisal. There is no regulation that mandates the use of aftermarket parts. Insurer are good at quoting only the part of the regulation that suits them: “When it is determined that a part must be replaced, a rebuilt, aftermarket or used part of like kind and quality shall be used in the appraisal…” They will NEVER give you the complete regulation that list several exceptions including this one: “unless the pre-accident condition warrants otherwise” That means it’s a judgment call on the part of the appraiser and not “required by regulations”
Betterment & Depreciation
Certain parts on your vehicle will wear from use and, as a result, depreciate in value. If any of these parts need to be replaced as part of your loss, your appraisal may include a deduction for betterment or depreciation of those parts. This is another scam to help mitigate the insurer’s loss at your expense. There is no policy language, law, or regulation that gives any insurer the right to depreciate parts. They do not insure the value of the part, they insure the value of the complete car. Your Massachusetts auto policy address this very issue under the General Provisions and Exclusions section. Here’s the part they like: “we will not pay for damages to your auto due solely to ordinary wear and tear.”
and the part they don’t tell you:
“We will however, pay for this damage if it is the result of some other loss which is covered by this policy”
Registered Shops & Referral Lists
Travelers of Massachusetts has a list of registered body shops within the county in which you live and/or work to choose where to have your automobile repaired. These shops have met at least minimum requirements (i.e. they have agreed to repair your vehicle the way the insurer tells them to) to be on this list. Certain shops have signed a contract with Travelers of Massachusetts to guarantee the quality of the materials and workmanship used in making the repairs. (wait..didn’t they say above that Travelers would guarantee the repairs?) These shops are shown in bold print. Travelers of Massachusetts will be happy to explain the referral shop program to you. Ask to see a copy of the contract between the shop and Travelers, so you can follow along while they explain it to you. Understand how that contract may interfere with your consumer rights.
So you’ve got to ask yourself, exactly where is the “higher level of service” Travelers promises?
Caution
Proceed carefully if you elect to use Travelers Concierge Claim Program, or any other similar insurer referral program. Your safety and financial well being may be at risk.
The State program 08-09 had 9.7% INCREASE, 09-10 had a 10.3% INCREASE. The companies will follow shortly.
The Insurance Commissioner is looking for “things to add to my resmume that sound better than they really are”.
She should work in an agency for 2 months, especially a small agency. Putting Managed Competition and the new Assigned Risk Pool in place at the same time….bright idea. It makes so much sense that I should have to communicate with ALL the Insurance Cos in MASS even if I have only ONE (MAIP) policy with each of them. Very efficient… but I know that is not her concern.
The state plan’s increase is no surprise to anyone with an understanding of the economics of risk classification.
Step 1: Identify the low risk policies and offer them a cheaper rate.
Step 2: Watch as the market reacts to your rates — Sell policies to the low risks while your competitor retains the higher risks.
Step 3: Watch as your competitor has lousy results and has to raise its rates as a response.
Step 4: Find another group of risks that are lower than the competitor’s higher rates now reflect and repeat steps 1-3.
Earlier this week, Travelers of Massachusetts announced the opening of their second Concierge Claim facility, which promises, among other things, “a higher level of service.”
Travelers of MA makes promises that claim “Travelers of Massachusetts professionals will take care of every detail of your claim from start to finish. You simply drop off your vehicle and let us handle the rest.” It all sounds so warm and cozy.
So what’s the problem? Let’s take a closer look at some of the statements made by Travelers.
At the ConciergeCLAIM facility, a Travelers of Massachusetts representative will immediately greet you and offer to:
Inspect the vehicle and provide you with an on-the-spot estimate
The insurer does have the right to inspect your vehicle. We’re ok with that. But what is the on the spot estimate worth? Nothing. Insurance loss reserve estimates are regularly and routinely low balled and typically are about 50% of the actual damage. We’ll look at why in a moment.
Handle all rental arrangements on site.
Ok, but making a phone call to the local rental car office is not what I would consider a “higher level of service” All rental car companies will pick you up, drop you off, and bill your insurer, as part of this program or not. And if you don’t have rental car coverage, you’re out of luck.
Work directly with the shop to review the damage, monitor the progress of the repairs and handle all details and paperwork
Letting the insurer “work directly with the shop” is like the fox guarding, no, make that living, in the hen house. Handling all the details and paperwork is vague, and there is really nothing of value there. Ten to one odds they won’t fill out your police report for you.
Provide you with regular status updates.
I don’t know what they are thinking here, but I seriously doubt they will notify you when the aftermarket parts they are using don’t fit properly.
Quality check all repairs before you come to pick up your vehicle
You can’t build in quality after the repairs are complete. Quality control must be done during each step of the repair process.
Offer you a guarantee on all repairs for as long as you own the vehicle
While this sounds good, it’s the law, so you’re not getting anything extra here.
While my critique of the above statements may seem trivial, we’re just warming up. Traveler’s next web page Appraisal Procedures is where the spin really starts.
A Travelers of Massachusetts appraiser will conduct an initial (meaning preliminary or first) inspection of your vehicle and will provide a copy of the appraisal to you. You may take your car or truck to the body shop of your choice with your appraisal. The initial appraisal is for visible damage only and is not an authorization to repair the vehicle. Lets stop right here. All appraisers are required by Massachusetts regulations to “itemize the cost of ALL parts, labor, materials, and necessary procedures required to restore the vehicle to pre-accident condition” So, by their own admission, your Travelers appraisal is non compliant with MA regulations, and will require one or more supplements. If you elect to not repair your vehicle, expect your settlement to be worth 30 to 50 cents on the dollar.
Additional Damage/Supplements
If additional, related damage is found on the car that was hidden (what is this-hide and seek?) at the time of the original inspection, the body shop (or vehicle owner, or owners representative) should contact Travelers of Massachusetts. We will arrange to inspect (again) the additional damages and write a supplemental appraisal if necessary.
Total Loss
If your vehicle is a total loss, a claim handler will contact you to explain the settlement process to you. We may want to move your vehicle to a salvage facility, (so we won’t have to pay storage charges) and your cooperation is necessary to help get the vehicle released and have your personal belongings removed from the vehicle before it is moved. What they are not saying here is that, according to the Division of Insurance, they are responsible for storage charges until they make you a reasonable offer on your vehicle. Don’t give up your car until you know how much your going to get for it.
Salvage/Aftermarket Parts
As required by regulations that govern the appraisal process, your appraisal may include parts that are of like kind and quality as the original manufactured parts. The parts may be used or from aftermarket suppliers and are documented on your damage appraisal. There is no regulation that mandates the use of aftermarket parts. Insurer are good at quoting only the part of the regulation that suits them: “When it is determined that a part must be replaced, a rebuilt, aftermarket or used part of like kind and quality shall be used in the appraisal…” They will NEVER give you the complete regulation that list several exceptions including this one: “unless the pre-accident condition warrants otherwise” That means it’s a judgment call on the part of the appraiser and not “required by regulations”
Betterment & Depreciation
Certain parts on your vehicle will wear from use and, as a result, depreciate in value. If any of these parts need to be replaced as part of your loss, your appraisal may include a deduction for betterment or depreciation of those parts. This is another scam to help mitigate the insurer’s loss at your expense. There is no policy language, law, or regulation that gives any insurer the right to depreciate parts. They do not insure the value of the part, they insure the value of the complete car. Your Massachusetts auto policy address this very issue under the General Provisions and Exclusions section. Here’s the part they like: “we will not pay for damages to your auto due solely to ordinary wear and tear.”
and the part they don’t tell you:
“We will however, pay for this damage if it is the result of some other loss which is covered by this policy”
Registered Shops & Referral Lists
Travelers of Massachusetts has a list of registered body shops within the county in which you live and/or work to choose where to have your automobile repaired. These shops have met at least minimum requirements (i.e. they have agreed to repair your vehicle the way the insurer tells them to) to be on this list. Certain shops have signed a contract with Travelers of Massachusetts to guarantee the quality of the materials and workmanship used in making the repairs. (wait..didn’t they say above that Travelers would guarantee the repairs?) These shops are shown in bold print. Travelers of Massachusetts will be happy to explain the referral shop program to you. Ask to see a copy of the contract between the shop and Travelers, so you can follow along while they explain it to you. Understand how that contract may interfere with your consumer rights.
So you’ve got to ask yourself, exactly where is the “higher level of service” Travelers promises?
Caution
Proceed carefully if you elect to use Travelers Concierge Claim Program, or any other similar insurer referral program. Your safety and financial well being may be at risk.