With the recent advances in claims automation, many insurance companies are already experiencing the benefits of faster cycle times, increased employee productivity, lower loss expenses, and higher customer satisfaction.
However, one area that continues to be problematic is accident scene management. Today, handling an accident scene claim is one of the trickiest and least transparent processes they undertake. And with over 6 million accidents in the US alone each year, this process is ripe for innovation.
Today, insurance companies are often left in the dark for days after their customer has been involved in an accident. Since they are unaware of the accident claim at this point, they are unable to make informed decisions that can benefit both them and their policyholders. Most customers contact their insurance company 7 to ten days after the accident occurs to file a first notice of loss report (FNOL).
The FNOL process requires insurers to collect information about the people and vehicles involved as well as the insurance information of the at-fault party. This process can take a long time driving up claims costs each day as damaged vehicles are left at storage facilities, paying for rental car fees, and more.
And in a world where goods and services continue to increase as a result of rising inflation, the necessity to optimize the process of accident scene management has never been more important.
Rising inflation and its impacts on the insurance industry
In the past year, inflation across the United States has risen by over 6%. While the average consumer has noticed the impact on an individual level, larger businesses and industries are seeing the effects of the rising cost of labor and material goods as well.
According to the Wall Street Journal inflation really began to affect the insurance industry earlier in 2021 – specifically when it came to vehicle repairs. “The consumer-price-index measure of vehicle-repair costs has been on the rise.”
This continues a years-long trend where the average cost of repairs for damaged vehicles rose close to 6% from 2019 to 2020. Up almost $200 to an average of $3,421 by the end of the calendar year.
Why is this of concern to insurers? For one, the rising cost of services such as automotive repairs can lead to potentially higher costs for the insured. The higher the cost for the insured, the lower their overall satisfaction. The graph from CCCs Midyear Report below shows a correlation with higher costs and lower NPS.
And while repair costs are rising and pose a cause for concern for insurance companies, the real problem starts at the scene of an accident. With rising inflation comes increased pricing for secondary tows, storage & impound fees, rental cars, etc. All of which are necessary factors to take into account when a claimant gets into an accident.
Someone’s going to need to cover all those costs…
With expectations of rising inflation continuing into Q2 of 2022, it is vital that insurers leverage technologies today that are readily available and can help solve complex issues like accident scene management.
On-scene decision making reduces cycle time
No one likes to be kept in the dark.
As previously mentioned, on average it takes a customer 7 to ten days to report a claim when they’ve been in an accident. This extended period of time keeps insurers out of the loop and out of the decision making process while customers arrange for necessary services without their input.
But what if an insurance company could find out about an accident within minutes of it happening? With products like HONK Technologies’ FirstOnScene Accident Scene Management Services, this is now becoming a reality.
By putting technology into the hands of first responders at the scene of an accident, namely towing Service Providers, insurers can receive photos, videos and information detailing the vehicle’s damage while that vehicle is still on scene. As a result, this information is sent to a claims adjuster immediately, equipping them with the tools to make more informed and instant claims decisions.
This in turn can reduce the total cycle time by 3 to 5 days and save insurers upwards of $500 per claim.
Additionally, what if an adjuster can make the determination that a vehicle is a total loss at the scene of an accident? There wouldn’t be a need for storage fees or repair costs.
With newer technologies like this, insurance carriers are able to receive the data points required to settle a claim while the customer’s vehicle is still at the scene of an accident.
To request a demo or learn more about FirstOnScene Accident Management Services and the benefits for insurance companies, please visit HONK’s Accident Scene Management page.