Chapter 8 Material Damage Flashcards
Material Damage
damage to physical property and would be associated with claim involving Collision, Comprehensive, Property Damage, and UMPD coverages.
________ is ultimately a large factor in how much the company pays out in claims.
Material Damage
Basic Nomenclature
Bumper group
Front panel, grille, and lamps
Hood group
Fender group
Inner structure
Mechanical - engine, cooling & air conditioning
Roof group
Door group
Pillars, rockers & floor
Quarter group
Trunk lid group
Rear body panel
Structural Design
structural design of a vehicle and how it reacts in an accident is one of the most essential pieces of damage analysis
Conventional Frame Design
Ladder Frames –For these frames, the frame is a separate structure from the vehicle components that are bolted onto the frame. Today, these frames are much less common than in the past and are most often seen on large pickup trucks and some larger SUVs.
Perimeter Frames – These frames are still a separate body and frame but, the shape was slightly differ to allow for positioning of the components. They were mostly seen on SUVs and some older model large luxury vehicles (i.e. Cadillac & Lincoln) until the rise in popularity of unibody design.
Unibody Design
Together, the welded components make up the structural integrity of the vehicle. There is not a separate frame that stands on its own. This design is used on most vehicles today, including SUVs.
Options for Damaged Parts
Appear Allowance, Repair, Replace
Appear Allowance
Monetary compensation for the damage in lieu of repairing or replacing the damaged component
Repair
Repairing the existing damaged part by using an industry-accepted repair technique for the type of material (i.e., metal, plastic, aluminum, fiberglass, etc.)
Replace
Actual replacement of the damaged part with one that is undamaged
Original Equipment Manufacturer
OEM
Made by or built to the specifications of the vehicle manufacturer
Located in the CCC database
The most common replacement parts
The manufacturer sets the price
Sold through new vehicle dealerships
Sold at a discount to the repair industry
Sold typically as individual parts, not assemblies
Aftermarket
parts are those created by companies other than the OEM
parts are sold online or in auto parts stores but are regularly used by body shops to repair vehicle
Parts that are manufactured to the same general specifications of the OEM
Manufactured (and warrantied) by companies other than the OEM
Sold by vendors other than those that sell new OEM
Parts that are typically mechanical: Radiators, A/C Condensers, Alternators, etc.
New Parts
Both OEM and Aftermarket parts are available as new parts. New parts would be defined as in pristine condition and not having ever been used on a vehicle previously.
LKQ which stands for “like, kind, and quality”
(1) recycled, (2) reconditioned and (3) remanufactured
Recycled
Lightest level of prior usage
Recycled parts can be a very cost-effective way to repair a vehicle and should be considered first with the estimate is being written. Recycled parts come from existing vehicles and are sold through independent recyclers who like to sell these parts as assemblies. The parts are usually interchangeable between vehicle years. Prices for these parts are negotiable and then marked up at shop to provide a profit margin (ranging from 20-25 percent across the country). Recycled parts may require clean-up and disassembly prior to use. The CCC database contains recycled part labor, refinish, and operation times.
Reconditioned
Parts that incurred some but limited damage during usage and can be brought back to their former condition without much difficulty are known as reconditioned parts (sometimes referred to as refurbished parts). The most common examples of reconditioned parts are bumper covers and wheels. These parts are sold by vendors other than those that sell new OEM.
Remanufactured
The third and final category of used parts is remanufactured. These parts were used to the point they were worn out and had to be rebuilt before they could be used again. Such parts are typically sold be vendors other than those who sell OEM – however certain dealerships may sell remanufactured engines, transmissions, starters, alternators, etc. The most common OEM parts are mechanical (engines, drive axles, gear box assembly, etc.).
Part Replacement Guidelines
Aftermarket parts should be considered on appraisals when the non-crash or crash part is of equal or better quality than the part being replaced and OE Surplus, recycled or reconditioned is neither available nor cost effective. State regulations concerning identification and documentation of usage will be adhered to and supersede any of the previous guidelines.
Aftermarket parts
defined as those manufactured by producers other than the OEM. They can be divided into two categories:
Non-Crash Parts
Crash Parts
Non-Crash Parts
These consist of bumper covers, suspension, steering, brakes, engine, exhaust, radiators, a/c condensers, electrical components, glass, wheels, lamps and other mechanical parts.
Crash Parts
This terminology is applied to outer body sheet metal, grilles, header panels and headlamps. The following guide applies to aftermarket crash parts
NGIC does not subscribe to the use of Aftermarket structural parts (bumper reinforcements and other structural parts –including but not limited to radiator supports, apron panels, etc.).
If a crash part is being considered for replacement, a Certified Crash Part should be utilized. If a warranty exists on the part being replaced, the company will agree to assume the terms and conditions of the owner’s current warranty on that part when an aftermarket is used.
Refinish Types
Single Stage Paint
Base coat/ Clear Coat
Three Stage Paint
Two Tone Paint
Single Stage Paint
- Found on older vehicles
- Mostly solid non-metallic colors
- Does not require additional clear coat
- When sanded the color will come off onto the sandpaper
Base coat/ Clear Coat
Clear coat, color with clear coat on top (clear coat can look white)
Three stage paint
- 3 layers of different paints
Base color, transparent paint like a pearl, clear coat
Two Tone Paint
-Accent color normally applied to the lower body
Single or 3 stage pain
Applied after main color
Prior Damage
Rust
Direction of impact
Incomplete repairs
betterment
replacement of parts, a newer part is put on the vehicle than what the customer had, they would be in a better position. This called
Depreciation
is a decrease in value of the vehicle, or part of the vehicle due to wear and tear, or obsolescence.
Methods of Inspection (MOI)
MyClaimPics (MCP)
Field Claims Representative (FCR)
Direct Repair Program (DRP)/ Good Hands Repair Network (GHRN)
Estimate-in-Hand
Independent Adjuster
MyClaimPics (MCP)
Virtual
Field Claims Representative (FCR)
In- Person
FCR’s are company employees who appraised damaged property
Work for NatGen, go out into the field and write estimates
Highest concentrations: NC, VA, NY, FL, CA
FCR will complete the estimate on the damaged property and upload the estimate and photos via CCC, documents will download into the Claims Document Folder
*If the claim representative has determined coverage and/or liability prior to the FCR appraising the damaged property, the claim representative can text or call the FCR who will then issue the check.
Direct Repair Program (DRP)/ Good Hands Repair Network (GHRN)
List of shops that NatGen works well with directly. We work closely with them.
Link- Shop Locator
If they write the estimate they have to do the work
Make sure the shop is ok with the customer before having the shop write the estimate
Sometimes estimates have to be reviewed
The DRP representative and the claim representative should remain in constant contact throughout the process.
Estimate-in-Hand
This option is only recommended if customer already has an estimate in hand and supporting photos. Damages should also be under $5,500 to be worthy of consideration.
Estimate-In-Hand is when a third-party company that reviews estimates and photos and obtains an agreed price with the owner’s shop of choice. The third-party company will upload the completed estimate and summary and it is then assigned to an MDS for approval or it is automatically approved.
The following do not qualify for Estimate-In-Hand:
Estimates between $250 and $1500 with no photos, unless the manager approves the review without photos
Estimates over $1500 with no photos, unless the RCM approves the review without photos
Estimates over $5500
Illegible estimates
Fire, flood, hail, vandalism, recovered theft, electrical, sand damage, rollover, subrogation, arbitration claims
Where estimates have been completed by FCRs
Where there is an active SIU investigation related to the damaged vehicle pending
Independent Adjuster
An Independent Adjuster is hired by the insurance company to complete a specific task, such as appraise damaged property, for a fee. They are not company employees and work independently, usually for several insurance companies.
Last Choice
Has to be approved by Manager and Manager’s Manager
Tear Down
Appraisers cannot see all the damage to the vehicle unless the car is taken to the shop for a “tear down”
Done most often is we think we are approaching the total loss %
When a shop takes a complete look for and damage from a loss
Total Loss Handling
Customer Vehicle may not be able to be repaired
*OR it may cost far more to repair the vehicle than to simply reimburse the value of the vehicle at the time of loss.
NatGen threshold is 85% in absence of a state percentage **Claim Toolkit (review of any implicated compliance information)
*NC 75% at or exceed 75% of the value of the vehicle-total loss
*Note in the file, call the customer and inform them that the vehicle is totaled, send assignment to the Total Loss Unit. (TLU)
*Best Practice- If total loss is in a Tow Yard, let customer know we need to get it moved, get it released at the Tow yard, Send a Storage Cut Off Letter (customer, and tow yard).
*If a vehicle is in storage…
Move car to residence
Body Shop
CoPart - storage free facility
Cheaper to tow than to store the car
Can ask to get the shop to tow it themselves
CoPart is connected to EPIC
Tell customer we need to move vehicle, Storage cut off letter, if total loss send to CoPart
Quick Move
Ability to identify a potential total loss vehicle as early in the handling process as possible. This car may be in a tow yard, check it out.
*When CAAP provides a recommendation for QM (strongly consider to moving vehicle)
*Review location
*Coverage Issue- up to CR to determined is movement is needed.
Control Expert and Advanced Charges
After a CoPart assignment has been created StorageCheck is automatically alerted to negotiate storage fees directly with the facility. It is important to remember that you’re still empowered to negotiate advance charges on your claims. If you negotiate charges with the shop or tow yard prior to the Copart assignment, you must alert Control Expert through (reviews@cepostmaster.com) to make them aware of the arrangement. Any charges over $5,000, Control Expert will require their RCL to review and approve before they can get the unit.
Diminished Value
Claim is significant enough that the car generally has a less resale value than the same vehicle in pre-cash condition.
Diminished value procedures depend on state regulations and a number of other factors.
Insurance company has to determine is this is applicable not the customer
Age of vehicle
Vehicle mileage
How much damage was cause in the accident (how much did the total repairs cost?)
Type of damage sustained
Prior repairs, prior owners, and overall condition
*Repairs must be done first!!!!
Recommendation, Note, Review by Manager, Hyperquest
Material Damage Claims adjuster deals with
Collision
Comprehensive
UMPD
Property Damage
Rental Reimbursement
Property Damage Rental
Rental Exposure
Aggressively monitor 1st and 3rd Party Rentals
If vehicle is drivable do not open exposure until rental is needed.
Days to Repair Calculations
Add labor subtotals and divide by 3.5
Rpl
replace
Rpr
repair
R and I
Remove and install
Remove the non-damaged part to repair the damaged part, and replace
Blnd
blend
subl
Sublet
goes to a different facility
Vehicle Diagnostics
