Spare parts shortages continue to cause significant auto insurance claims delays, and a scarcity of adjusters is, in some cases, exacerbating the issue.
Many problems brokers are now seeing and helping clients manage wouldn’t have popped up in prior years, said Jesica Ryzynski, a claims specialist at Mitch Insurance.
“The fact that people can sometimes be waiting for three-to-six months for a part to come in just to complete the repairs is unprecedented,” she told CU. “And delays are also due in part to there being a shortage of adjusters industry wide.”
Despite global parts sourcing, a car’s origin also can increase timelines between an accident and when it’s back in a client’s driveway.
Longer supply chains, particularly for vehicles made in Europe, mean repairs are taking longer, said claims specialists at two other brokerages. A tendency of some Asian manufacturers to locate plants in North America has helped reduce strain on their supply chains somewhat.
Rising collision rates as drivers return to pre-pandemic driving habits also are straining parts supplies, they added. Likewise, semiconductor shortages extending back to early 2020 continue to plague parts makers and, by extension, repair shops.
Soothing clients
Auto policy terms vary from insurer to insurer. And the specifics around rental car coverage offered by each company can create some work for brokers, who must explain benefits details to clients.
“It is a new problem and companies are [working to] figure out, ‘How can we manage this? How can we mitigate this? What do we need to do to benefit the client in this moment, while also making sure that all insureds don’t suffer from rate increases as the result of extended payments for rental cars?’” she said.
“In a lot of cases, if it’s a parts delay, the companies are not going to pay for an extension on that rental.”
That can lead brokers to have to work with people who, in reality, have few options.
Meanwhile, adjusters have also told CU that “significant increases in rental costs” due to delayed parts delivery has led insurers to more quickly total cars out.
That’s a trend Ryzynski’s also seen.
“I am definitely seeing more total losses for things that you wouldn’t usually [total out]. And often the client is being given that option and they’re taking it because it’s just crazy to wait and drive a rental for four or five months.
“They want to be driving their own vehicles. I’ve been in the industry for 26 years. I have never seen anything like this.”
Feature image by iStock.com/justocker
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.