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App-based repair estimates coming in thousands of dollars below the final cost

Workshop to address historic increase in auto insurance complaints as they jump 48% in last two years

Olympia, Wash.—Claims denied without a suitable explanation. Frustrating delays in hearing back from insurance companies. Initial app-based repair estimates coming in thousands of dollars below the final cost.  

Washingtonians have been filing complaints about their auto and homeowners insurance issues at a record pace, and Insurance Commissioner Mike Kreidler announced Monday he’s hosting a workshop next month to hear from consumers, insurers and other parties on the reasons for the increase. 

The Office of the Insurance Commissioner (OIC) has reported a historic volume of complaints since 2021. The OIC’s Consumer Advocacy Program received 467 complaints in April 2023, up from the historic average of 287 a month — a 63% increase. 

Complaints involving auto insurance are responsible for most of the rise, with the majority of the auto insurance complaints revolving around how (and how fast) claims are handled. Auto insurance complaints jumped from 2,216 in 2020 to 3,045 in 2021 and 3,276 last year — a 48% increase over a two-year period. 

Photo app-based repair estimates

Unsatisfactory settlement offers remain one of the largest drivers of auto insurance complaints, one contributing factor towards this issue is heavier reliance by insurance companies on photo app-based repair estimates. These estimates can be significantly lower than expected, which drives consumer complaints. Below are some examples provided by senior analysts within the Property and Casualty Unit.

Case 1690943 — A Seattle resident went to a local repair shop for repairs to his Porsche. His insurance company requested he use their application to photograph the damage. They prepared an initial estimate of $2,816 to repair the vehicle using photos submitted through the application. Both the repair shop and the consumer requested that the insurer conduct an in-person inspection, but company refused stating it was not possible at the time and that they would be doing a virtual inspection. The final cost to repair after supplemental estimates was $13,233, more than $10,000 higher than the initial estimate.

Case 1701312 — The insurance company’s initial app repair estimate was $6,481.28. The final repair invoice was $19,779.33. The insurance company requested the third-party claimant use their app estimator. The company disputed the repair shop’s labor rates, but the rates/cost approved by the insurance company to repair the Tesla was still $13,000 more than their app estimate.

Case 1676380 — A third-party claimant was asked to use the insurance company’s photo application to estimate the damage to their vehicle. The photo app estimate was $1,637. After the supplementals, the final repair invoice was $9,490, an almost $8,000 difference compared to the initial estimate.

“Most of the time, the claims process works as intended when insureds and claimants alike are made whole,” Kreidler said. “But when there are disputes, the industry needs to step up and do more to help resolve them in a timely, accurate manner.”

As of May 15, 2023, claim handling issues are cited in more than 80% of complaints — a record figure.

P&C Complaints Closed by Month — Last 8 Years 

Chart shows how dramatically consumer complaints against property and casualty insurers have increased over the last 8 years, particularly after the COVID-19 pandemic and its associated impacts. Recently hitting an all-time high of 467 complaints in a single month, up from the historic average of 287. Source OIC Washington State

Kreidler’s office will host a virtual workshop on July 17 to gather information from the insurance industry, the auto repair and restoration contractor industry, claim experts, and consumers to determine how the OIC will address the issue. 

Further details and an agenda will be announced a week before the event and will include information on how to testify. The meeting will be open to the public and held virtually, via Zoom, from 11 a.m. to 1 p.m. 

A video of the workshop will be posted online later that month.  

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