CEI has done something different at NAFA this year. You brought a car with accident damage as part of your exhibit. What is the idea behind that?
CEI has been a supporter of NAFA for almost three decades and we wanted to provide an opportunity for additional education at this year’s I&E Conference by allowing attendees to see vehicle damage up close and have a chance to discuss the complexities of today’s vehicles with some of CEI’s in-house licensed physical damage appraisers.
With every new model year, cars are being manufactured with more plastic and carbon fiber parts, safety systems and computers that result in significantly more hidden damage after collisions than we used to see years ago. You can’t necessarily see it unless you start taking the vehicle apart. But because we handle so many claims, CEI’s in-house quality control team of licensed physical damage appraisers quickly become aware of when that kind of damage may exist on specific new models, even before the repair work begins.
The car we brought to NAFA was one that is very prevalent in many of today’s fleets. We cut away the outer panels of half of it so we could bring it to events like this and show fleet people all the hidden damage that resulted from the accident. While this car doesn’t look that bad, it was in fact totaled, in part because of all the hidden damage. The whole point of this is to demonstrate how we try to limit surprises for our clients, especially when it comes to supplements to initial estimates, which nobody really likes to receive. And because our quality control team scrubs every estimate, which includes reviewing multiple images of every damaged vehicle, we’ve been successful at keeping our supplement rate well below the average for the auto body repair industry.
Are there other benefits that your clients see because CEI uses licensed appraisers?
Yes. Beyond anticipating hidden damage and keeping supplements to a minimum, they also review every estimate for accuracy and potential cost savings. They check each one to make sure the correct labor hours are being charged, to look for whether less expensive aftermarket or LKQ [like kind and quality] parts can be used and whether a job can be done using paintless dent repair techniques. As a result, we’ve been able to save millions of dollars for our customers. In 2012, for example, our quality control team saved our accident management customers over $9 million in documented savings through these quality control audits.
That is an impressive number. How do you communicate what you save to your customers?
We document every penny of savings that we obtain through our quality control department, and present them online in every claim file. CEI is an open book when it comes to our processes and what we do for our customers. Every time our team of quality control appraisers identifies savings, they document it in our ClaimsLink™ system and that gets posted online for our customers to see. It is not just a little note in the file. They can actually access graphs, data files and, reports all showing the quality control audits that our quality control team has processed on their behalf.
How about subrogation?
With respect to subrogation, we are able to help our customers recover more of the money they’re due from at-fault, third-party drivers than they could on their own. Number one, we do it very quickly. Our average recovery time is less than 60 days, which is excellent when compared with the industry. We also take advantage of enhanced subrogation technology through electronic collection technology. This technology enables us to communicate, negotiate and transfer all the documents for loss recovery demands to the adverse carrier in digital format, fed directly into the carriers’ file systems. This cuts an enormous amount of time off the recovery process.
In addition to using the latest technology, we’re very thorough. We collect all the relevant accident reports and analyze them carefully, with consideration to the loss recovery laws in every state, and build a case we’re confident of. We also ask for other items such as loss of use and diminished value on the vehicles to try to recover more than the customer actually spent. In doing so, we recover for our customers around 94 percent of all the dollars we pursue, which amounts to around about $35 million dollars a year.
Ken Latzko is CEI’s southeast regional sales manager. He joined CEI’s fleet operations department in 2004 after graduating with a bachelor’s degree from St. Joseph’s University in Philadelphia, PA. Since then, he has held positions of increasing responsibility in the company’s client services, strategic account services and sales and marketing departments.