Chapter 14 - Closing Case - AI in the Car Repair Industry Flashcards
Who are the four parties in a car repair business?
- The customer
- The insurance company
- Claims adjustor
- The car repair shop
What are staff adjusters?
Known as company or employee adjusters, work for an insurance company as a salary employee.
What are independent adjusters?
Contracted through third party claims handling. The insurance company may outsource it to another company and assign it to the independent adjustor.
What happens if a customer gets into an accident?
The claims adjustor examines the damage and estimates the cost to repair. To determine the fair value of the vehicle. If the cost is more than the cars worth, the insurance company will just pay the fair value to the customer.
What is the first step of the appraisal process?
To report it to the insurance company. Typically they would travel to the scene and interview the customer about the conditions that led to the accident.
What happens during the appraisal process?
Adjuster determines the extent of the damage, by following strict criteria and standards, and determines the repair costs. Coverage will be determined by the policy, and the damage could be so severe that it is just written off as a total loss.
What happens at the same time as the appraisal process? What is the conflict between insurance companies and the repaid shops?
It is brought into a repair shop, and they perform diagnostics and estimate of cost repairs in accordance with the Original Equipment manufacturers repair procedures. The repaid shops must follow the policies of the manufacturer, but the insurance company wants to pay the smallest amount. The adjuster decides how much will be paid, and the customer may have to pay out of pocket if the insurance company won’t budge.
What did an adjuster reveal to the body shop owner?
There was strict policy and parameters that the adjuster had to follow and if they strayed they could lose their jobs. However the body shop owners started educating them on the documentation repair procedures and every line item in the repair plan.
What is the car repair process today?
Due to the covid 19 pandemic the body shops do not see appraisers anymore. Rather the companies use machine learning algorithms to make an estimate of the damages and sends it to the body repaid shop.
What are virtual estimates?
An adjuster does not physically assess the damage. Rather they tell the driver who has been in an accident to download an app and they they must take pictures of the vehicles in certain angles and lights and the clams adjuster can estimate the cost of repairing the car.
What are the benefits of virtual estimates to the insurance companies? How many cars can in person appraise vs an online appraisal?
Save time and money as they can only inspect about 3 to 8 vehicles when in person, but can do 15-20 with photos and save on gas and time.
Why are vehicles considered to be fantastic for machine learning algorithms?
They have a consistent form like the doors, windshields, and bumpers, and while 30000 parts can go wrong, th most common look a certain way. They train their algorithms in classifications by using millions of photos of damaged cars of every make and model.
What are virtual estimators the greatest at doing?
Assessing the damage of minor accidents where no one is hurt, which comprises the majority of accidents.
What is Tractable? What is the percentage accuracy?
It is an AI computer vision and machine learning company that enables virtual estimators. They make claims that it is so accurate intervention is rarely required by a human adjustor, 25% are 100% accurate. They desire to have a success rate of 75%.
What percentage of claims were done virtually before the pandemic? What percentage exists now and during the pandemic? According to TD and LexisNexis.
15% of the claims were settled before the pandemic via virtual checks. Now it is 85-100%, with the most conservative estimate being 65%.
