J.D. Power Releases 2012 US Auto Claims Satisfaction Study

Despite consumers paying more, satisfaction with fairness in the settlement drives increase in overall satisfaction with auto insurance claims.

Claimant satisfaction with their auto claims experience has increased from last year, driven primarily by an improvement in their perceptions of the fairness of settlement terms, according to the J.D. Power and Associates 2012 U.S. Auto Claims Satisfaction Study.

The study measures claimant satisfaction with the claims experience for auto physical damage loss. Depending on the complexity of the claim, a claimant may experience some or all of the following factors measured in the study: first notice of loss; service interaction; appraisal; repair process; rental experience; and settlement.

For a fifth consecutive year, Auto-Owners Insurance ranks highest in overall satisfaction with a score of 887 (on a 1,000-point scale). Following Auto-Owners Insurance are Amica Mutual and Erie Insurance in a tie (876) and Automobile Club of Southern California (AAA) and COUNTRY in a tie (874).,

Overall claimant satisfaction has increased significantly to 852 index points, a 6-point improvement from 2011. Satisfaction has increased in five of the six factors year over year, with settlement, the most important factor contributing to overall satisfaction, increasing by nine points to 846. Settlement satisfaction has increased by 16 points among claimants with a total loss. The average total loss settlement has increased by nearly $690, compared with 2011, driven by increasing used-vehicle values throughout much of 2012.

“As used vehicle sale prices increase, the value of the loss settlement also increases,” said Jeremy Bowler, senior director of the insurance practice at J.D. Power and Associates. “According to our Power Information Network, a database of vehicle sales transactions, used-vehicle sales prices peaked in May and June of this year, averaging nearly $18,500, compared with approximately $17,700 in January of this year.”

Satisfaction with settlement has improved overall despite claimants spending more of their own money–the average out-of-pocket costs incurred have increased by $26 from 2011, to $403. Out-of-pocket costs include claimants’ deductible and any additional expenses incurred, such as rental car or repair costs. Settlement satisfaction relies heavily on claimants’ perceptions of the fairness of the settlement. In the 2012 study, this is an indication that insurers are managing claimants’ expectations more effectively, as satisfaction has increased despite the increase in costs incurred by claimants.

“Providing exceptional customer service is an important element in driving the perception of being treated fairly,” said Bowler “Claimants’ perception of fairness is more than just the amount of the settlement, especially for repairable vehicles, where claimants are more focused on their vehicle being returned in its pre-accident condition. Focusing on keeping claimants updated and quickly communicating what will be covered in the claim also have a major impact on their perceptions of how fairly they are treated.”

One area in which insurers improve the most this year is increasingly offering more options to keep claimants informed of the progress of their claim, with 64 percent of claimants indicating having been offered options, compared with 61 percent in 2011. Failing to adequately explain and update claimants may lead to their questioning the settlement offer and potentially increasing the rate of negotiations, which negatively impact overall satisfaction.

The management discussion based on the study, available for download here, provides an in-depth examination of how fairness impacts overall satisfaction with the automotive insurance claims process.

The 2012 U.S. Auto Claims Satisfaction Study is based on responses from more than 12,508 auto insurance customers who settled a claim within the past 6 months. The study excludes claimants whose vehicle only incurred glass/windshield damage or was stolen, or who only filed roadside assistance claims. Survey data was collected between November 2011 and September 2012.

by JD Power & Assoc Press Release: http://autos.jdpower.com/content/press-release/qMmYBvg/2012-u-s-auto-claims-satisfaction-study.htm

Roadways May Soon Glow in the Dark to Reduce Accidents

Dutch inventor Daan Roosegaarde and road construction company Heijmans, will team up to complete an experimental road next year that glows in the dark using a concept designed to reduce accidents caused by dark or inclement weather conditions.

    

The new design, which won Best Future Concept at the Dutch Design Awards, is similar to the old glow in the dark toys. It uses luminescent paint that charges by the sun’s light during the day, and glows at night, for as long as 10 hours.

In the Roosegaarde concept, roads could also be designed with ‘intelligent’ glow in the dark patterns which only glow under certain conditions, such as a snowflake pattern that only glows when road temperatures approach freezing, a concept seen on other products, such as beer cans and baby products.

The first experimental glow in the dark road is expected to be installed in the Netherlands in 2013.

by Honda News & Views: http://ahm.lma-web.com/roadways-may-soon-glow-in-the-dark-to-reduce-accidents#.URABqB00WSo

Research Team Unveils Magnesium Front-End Body Structure

The United States Automotive Materials Partnership LLC (USAMP) has successfully built a new magnesium-intensive vehicle front-end body structure. The milestone experiment, a part of the group’s Magnesium Front-End Research and Development (MFERD) Project, was carried out to establish the practicality of building such a structure in order to build lighter, yet equally safe, production cars.

Phase I of the project indicated it is possible to achieve a 45 percent final net weight reduction in a magnesium-intensive front-end unibody structure and a 24 percent weight savings in a body-on-frame architecture through increased use of magnesium, when compared to baseline designs using conventional materials.

In addition to the reduction in weight, the part count was reduced by 59 percent through the integration of die casting and addition of aluminum extrusions, while meeting all specifications for vehicle stiffness and fatigue and with a crashworthiness equivalent of the baseline models based on simulations.

Two front-end architectures were selected by the project team; a rear-wheel-drive (RWD) unibody represented by the Cadillac CTS passenger car and a body-on-frame (BOF) represented by the Ford F-150 pickup truck. The OEMs provided the baseline steel data, vehicle design and performance targets for the USAMP team for hypothetical design and technical cost modeling of the magnesium front-end structures.

As part of Phase II of MFERD, the USAMP project team then designed, fabricated parts, assembled, surface finished and completed testing of more than 200 demonstration structures, representing major components in the unibody front end. Half of these magnesium structures were built using friction stir linear welding (FSLW) and the remaining structures were built utilizing a laser-assisted, self-piercing rivet (LSPR) process.

The first phase of the project ran from 2007 to 2009 and developed key enabling technologies in magnesium extrusion, sheet, high-integrity body casting, joining and assembly. During this pahse, a significant knowledge base was also established in magnesium corrosion protection, crashworthiness, fatigue and durability, and noise, vibration and harshness (NVH).

“Consistently improving vehicle fuel economy is important to everyone,” said Steve Zimmer, executive director at United States Council for Automotive Research (USCAR). “Vehicle lightweighting is an essential part of that effort, and USAMP is a key industry player in needed research and development.”

USAMP is a team within the United States Council for Automotive Research (USCAR), a cooperative research effort formed by GM, Ford and Chrysler.

by Collision Week: www.collisionweek.com/cw/news/2012/1129-rese.asp

Female Drivers Now Outnumber Males

In yet another trend that may lead to a decline in repair volume, University of Michigan researchers have discovered that not only are young and middle-aged men and women less likely to have a driver’s license today than nearly 20 years ago, the proportion of male motorists has been declining at a higher rate.

This trend may add up to declining repairable collision claims because, as Michael Sivak, a research professor at the U-M Transportation Research Institute, points out, “Females are more likely than males to purchase smaller, safer and more fuel-efficient vehicles, they drive less, and tend to have a lower fatality rate per distance driven.”

Using data from the Federal Highway Administration and U.S. Census Bureau, Sivak and colleague Brandon Schoettle examined recent changes in the gender demographics of U.S. drivers from 1995 to 2010.

They found that in 1995 male drivers outnumbered female drivers for each age group up to age 70. Today, that holds true only up to age 45. In addition, the percentage of males with a driver’s license decreased from 1995 to 2010 for those younger than 60. For females, this decrease occurred for those younger than 50.

“Our data indicate that the shift toward having more female than male drivers has been a gradual one that has continued throughout the 15 years examined,” Sivak said. “While in 1995 male drivers outnumbered female drivers, the opposite was the case in 2010. Furthermore, we expect that this trend is likely to continue in the future, further increasing the relative proportion of female drivers.”

“One possible interpretation of the finding that the decrease in licensure rate has been greater for males than for females is that males are relying more on electronic communication than females,” said Sivak. “Because virtual contact through electronic means is reducing the need for actual contact, driving demand has been reduced more for males than for females.”

by Collision Week: collisionweek.com/cw/news/2012/1114-fema.asp

New Aftermarket Parts Regs Receive Final Approval in California

California Insurance Commissioner Dave Jones announced on Friday that the Office of Administrative Law (OAL) has approved amended regulations submitted by the California Department of Insurance (CDI) regarding the use of aftermarket crash parts.

The new regulations are expected to become effective on January 30, 2013 with compliance required 90 days after they are filed with the Secretary of State, or on March 30, 2013. Any claims handling that takes place on or after the compliance date of March 30, 2013 will be required to comply with these regulations.

Specifically, the new regulations will:

  • Require an insurer to pay for the costs associated with returning a defective part and the cost to remove and replace the defective part with a compliant non-OEM part or an OEM part;
  • Require the current insurer’s warranty be expressly stated in the estimate of repair generated by the insurer;
  • Require an insurer to cease use of a part known to be non-compliant, and to notify the part distributer within thirty (30) days;
  • Require an insurer to pay for an amount to repair the damaged vehicle to its pre-loss condition in a good and workmanlike manner, based upon the repair standards required by auto body repair shops licensed by the Bureau of Automotive Repair.

Commissioner Jones said the new regulations were sought to further protect California consumers from physical and financial harm caused by defective or inferior aftermarket parts and to enhance insurer accountability in the claims process. “The amendments build on existing protections by requiring insurers to settle automobile insurance claims using repair standards described by the Bureau of Automotive Repair, and not the insurer’s own standards of repair,” said Commissioner Jones. “This also places greater accountability on the insurer when they require use of an aftermarket replacement part so that damaged automobiles are repaired properly and safely.”

The Insurance Department said that after investigating complaints from consumers and repair shops and evaluating the law, the Department drew the conclusion that defective or otherwise non-compliant aftermarket parts continued to infiltrate the repair process due to insurers’ failure to perform the necessary steps to ensure public safety.

CDI said it had been made aware of defective aftermarket bumper reinforcements, hood latches, and other safety related parts being required by insurers that otherwise were not compliant with current repair standards. CDI said it had also been made aware of substantial costs borne by automobile repair shops and their customers associated with installing defective or poorly fitting parts required by insurers. Performing repairs that do not comply with current repair standards or placing an inferior aftermarket part in a vehicle may cause the vehicle’s value to depreciate. Defective parts may cause injury or even death if they malfunction, the Department said.

During the formal rulemaking process to develop the amended regulations, CDI listened to stakeholders representing consumers, insurers, shops, distributors, and automobile manufacturers. CDI also held a pre-rulemaking workshop in November 2011, which included strong representation of many stakeholders involved in the process.

Download the final amended regulations

by Collision Week: http://www.collisionweek.com/cw/news/2013/0107-newa.asp

Nissan to Launch Drive by Wire as Early as This Year

Nissan unveiled what it calls “the world’s first steering technology that allows independent control of a vehicle’s tire angle and steering inputs” and says the technology will be in showrooms as early as next year.

Unlike a conventional steering system that employs a mechanical link between the steering wheel and the front wheels, Nissan’s new system reads the driver’s intentions from steering wheel inputs, but actually controls the wheels by computer. The company says the system actually increases the direct driving performance feel.

Accompanying this steering technology, Nissan has also developed a camera-based straight-line stability system to enhance on-center driving capability. Using a camera mounted above the rearview mirror, the system analyzes the road ahead, recognizes the lane direction, detects changes in the vehicle’s direction, and transmits this information to multiple electronic control units as electronic signals. If the vehicle direction changes due to road surface or crosswinds, the system also acts to minimize the effect of these conditions resulting in less required steering input from the driver.

System reliability is achieved by multiple ECUs. In the event a single ECU malfunctions, another ECU will instantly take control, and in extreme circumstances such as the power supply being disrupted, a backup clutch can re-connect the steering wheel and wheels mechanically, for traditional steering control.

Nissan says the technology will be equipped on select Infiniti models within one year to provide “Driving as Intended” and “Driving with Peace of Mind” for owners.

In related “self-steering” news from Nissan, the company recently demonstrated technology it is working on that allows a car to temporarily take control of the vehicle to avoid a collision. A video released by the carmaker shows a specially equipped Nissan Leaf swerving to avoid a pedestrian and returning to its intended lane of travel, all with no driver input.

by Nissan’s Press Release: http://www.nissan-global.com/EN/NEWS/2012/_STORY/121017-02-e.html

Nissan Debuts Efficient New Smyrna Paint Plant

The plant will use an innovative three-wet paint process that applies all three paint layers in succession, before the vehicle goes into the oven. Nissan’s previous process required the vehicle to bake in between the primer application and the topcoat layers. Implementation of this new technology reduces energy consumption, cost and emissions while increasing production efficiency.

Nissan Debuts Efficient New Smyrna Paint Plant

The state-of-the-art facility is capable of reducing energy consumption by 30 percent, carbon emissions by 30 percent and volatile organic compound (VOCs) emissions by 70 percent.

The 250,000 square-foot footprint plant is located adjacent to Nissan’s existing vehicle assembly plant in Tennessee and replaces Nissan’s previous paint system that has been in service for nearly 30 years.

by Nissan News: http://nissannews.com/en-US/nissan/usa/releases/nissan-debuts-efficient-new-smyrna-paint-plant

Insurers Not Pleased with New California Aftermarket Parts Regulations

FEATURE: The Association of California Insurance Companies (ACIC), a subsidiary of the Property Casualty Insurers Association of America (PCI), said in a statement on Wednesday that the new aftermarket parts regulations approved in California “essentially require insurers to pay whatever auto repair shops demand” and that insurers “no longer have the ability to negotiate the most effective, less costly repair.”

The new regulations, originally released by the California Department of Insurance (CDI) in June 2012, received final approval from the Office of Administrative Law (OAL) and are to go into effect on January 30. Insurers will be required to comply on and after March 30, 2013.

In an interview with Online Auto Insurance News (OAIN), Armand Feliciano, ACIC vice president, hinted at possible legal action against the CDI saying that PCI and ACIC are “exploring options” and “If action is taken, it will at least partly center on whether or not the regulators have the power to implement such rules.”

Challenging state regulators in court is not a new concept for insurance associations. In 2006, the ACIC was part of a lawsuit filed against the California Department of Insurance over a newly enacted regulation dealing with premium calculations. The ACIC asked the court to declare the regulations illegal and to grant a preliminary injunction to prevent the CDI from enforcing the regulations.

Under the new aftermarket parts regulations, insurer estimates for auto repairs must not “deviate from the standards, costs, and/ or guidelines provided by the [estimating software]” and any insurer adjusted estimate must be either “an edited copy of the claimant’s repair shop estimate” or a supplemental estimate that would “identify specific adjustment made to each item and cost.”

“The new rules also require insurers that encourage the use of aftermarket parts to provide written warranties on parts that the insurers did not manufacture,” said Feliciano. “The enabling legislation that authorizes these regulations required manufacturers to warrant the aftermarket parts, not insurers.”

In addition, the regulations would require any insurer that specifies aftermarket parts to cease using any aftermarket part if the insurer has knowledge that the part is not equal to the OEM part and pay for the costs associated with removing and replacing the part with one that is equivalent.

Feliciano said the new regulations give auto body repair shops “a distinct advantage in preparing scope of work estimates, which could drive up repair costs.”

Feliciano told OAIN that, “Auto repairers have resorted to legislation via the regulatory process. We feel that some of these regulations that have been put into place are outside of what the CDI has the authority to do.”

Former president of the ACIC, Sam Sorich, discussed the new regulations in his law blog this week and explained some of the insurance industry’s concerns. Sorich is now an attorney with the law firm Barger & Wolen LLP in Sacramento.

“Insurers argued that the department lacked the authority to impose auto body repair shop regulations on insurers,” Sorich wrote. “Insurer representatives also contended that the regulatory provision that an insurer must warrant a non-OEM part is inconsistent with a Business & Professions Code statute which explains that non-OEM parts warranties are provided by the manufacturer or distributor of the parts. Insurers pointed out that the amendments would be harmful to the public because the amendments’ restriction on the use of non-OEM parts will lessen competition in repair parts and will lead to higher repair costs.

ACIC did not respond to a request for comment by press time.

by Collision Week: www.collisionweek.com/cw/news/2013/f0111-insu.asp

ICAR Press Release: Esurance Earns I-CAR Gold Class

I-CAR announced that Esurance, a direct-to-consumer insurance company that writes policies in 34 states, has earned the I-CAR Gold Class Professionals designation at the corporate level.

Esurance was first recognized as a Gold Class business in 2009 and is now recognized under today’s more comprehensive Professional Development Program (PDP) training requirements. Insurance businesses can earn the Gold Class designation at a corporate level, as Esurance has, or at an individual business location level.

John Van Alstyne, I-CAR CEO & President said, “I-CAR is thrilled that Esurance has achieved Gold Class status. This shows not only a commitment to training and employee development, but also a commitment to performance of complete and safe repairs for Esurance customers.”

Joe Laurentino – Vice President, Material Damage for Esurance said, “We are pleased to join this elite network of Gold Class businesses. The training provided by the PDP will benefit our appraiser staff and most importantly, Esurance customers.”