Why Auto Insurance Claims Processes are Far Behind the Mortgage Industry and How to Turn it Around

By Teresa Urban

Why Auto Insurance Claims Processes are Far Behind the Mortgage Industry and How to Turn it AroundThere are several similarities between the processes for filing auto insurance claims on repossessed vehicles or damaged returns, and filing hazard claims for mortgagees. In the auto industry, an auto finance company notifies a service provider about a list of repossessed vehicles for inspection. The provider then travels to auction sites or uses technology to view images of the vehicles for specific damage, insurance carrier and date of loss. As expected, the date of loss is more difficult to identify with auto claims since historical photos of the vehicle do not exist. After the necessary inspections, the service provider runs reports for additional information, files the claims, remits the package back to the auto finance company and recovers as much money as possible for damages.

When choosing a service provider to assist with filing your auto insurance claims, auto finance companies need to look at companies that are leveraging expertise in order to get more money for their clients. Service providers who work in the hazard claims industry do not automatically have experienced staff members with knowledge of the auto market. Auto finance companies need to do their research and ask questions regarding the adjusters’ background who will ultimately be performing the work.

Along those lines, auto finance companies should make sure that their service provider’s adjusters and processers are certified in auto insurance claims. Expertise, combined with proper certification and training will return more money to offset losses.

In addition, auto claims service providers should be investing in innovative technology in order to help recover more money for their clients by tracking claims on tighter timelines. Auto insurance claims should be adjusted and resolved much faster than hazard claims processing, usually taking between 30 and 35 days for auto compared to 45 days for mortgagee hazard claims. With the adoption of technology that enables adjusters to view detailed images of damaged vehicles, the process becomes even faster, saving the servicers both time and money.

The Consumer Financial Protection Bureau (CFPB) looks into every loan servicer’s processes and operations, so it is important to make sure that your vendor abides by all regulations concerning IT compliance, data compliance and security.

Your service provider should also be well versed in the regulations set by the Office of the Comptroller of the Currency (OCC), and they should be able to prove that they not only know each rule, but are compliant with every transaction.

Auto insurance claims providers should give auto finance companies the care they deserve. It is vital that auto loan servicers seek out a partner with experienced adjusters, appropriate compliance training and access to innovative technology in order to provide the largest return to their clients.

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