Big Jim owns a towing service, and his lot can store up to 100 vehicles. Every time there is a road accident in town, Jim gets a call to tow the vehicle. The vehicle then remains in his lot until he gets direction to transfer it to either a repair shop or a salvage yard. Sometimes vehicles will sit on Jim’s lot for three to four days or longer. Jim is happier on Fridays like all workers, though his happiness stems from the fact that all new vehicles towed in will remain in his lot through at least the weekend. On average, Jim’s lot is 75% full. As the only towing operator in town, business is good for Big Jim.
For most claims where the vehicle isn’t drivable, insurers are likely to incur storage costs until the vehicle is moved from the primary tow facility. This scenario results in costs in two key areas: (1) storage of the vehicle at the tow yard and (2) rental car charges until the vehicle is picked up by the claimant or replaced in the case of total loss. Adjusters struggle to easily identify and prioritize their tasks around dormant vehicles as they manage the hundreds of claims files on their desks, resulting in an increase in claims costs and cycle times.
Unbeknownst to Jim, insurers can now leverage predictive analytics along with real-time access to key claims data to better manage dormant vehicles and claim costs. For an average insurer processing 50,000 auto physical damage claims per year and with Jim charging $30 per day for keeping the vehicle on his lot, imagine how much money can be saved just by reducing the number of days the vehicle sits dormant by one day?
Predictive analytics combined with real-time claims data can help claims adjusters and supervisors:
Minimize the time a vehicle sits in the tow yard by early detection of non-drivable and total-loss vehicles
Minimize the time a vehicle sits in the tow yard through prompt approval by the claimant to move the vehicle through a prioritized triage list
Minimize the time from estimate received to approval for repair
Avoid weekends by not scheduling the vehicle to be dropped off for repairs on a Friday and scheduling pick-up before the weekend
The result is a win-win for both claimants and insurers. Claimants get their claims processed faster, and insurers manage costs while improving adjuster productivity.
Now Big Jim may not be very happy upon learning this, but since his lot could now only be half full, perhaps he can rent out the other half to some other business.