Becoming An Insurance Estimator: A Step-By-Step Guide

If you're interested in cars but don't want to become a mechanic or technician, becoming an insurance company estimator could be a great way to get into the automotive industry. Insurance company estimators are responsible for checking insurance claims for fraud, assessing vehicle damage, and calculating the cost of repairs or the value of a settlement. To become an insurance company estimator, you'll need a combination of skills, including communication, analytical abilities, and math skills. Most estimators have some type of formal education, such as a 2-year vocational program or associate's degree, along with additional certifications. However, shorter programs are also available, especially if you already have experience in the automotive industry.

Check for fraudulent claims

Detecting fraudulent claims is a key part of an insurance estimator's job. Here are some detailed methods and strategies used to check for fraudulent claims:

Analyze Claims History

An individual's claims history is a key indicator of potential fraud. Submitting a large number of claims or claiming significant losses over time can be red flags. Insurance companies keep detailed records and conduct in-depth analyses of claims data, including the frequency and type of claims. Deviations from typical patterns may trigger further investigation.

"Suspicious Loss Indicators" Checklist

The National Insurance Crime Bureau (NICB) has developed a list of "suspicious loss indicators", which are specific items or circumstances within a claim that suggest it may be fraudulent. Some examples include a claimant who is unusually calm after submitting a large claim, handwritten repair receipts, or a fire damage claim shortly after a family argument. While these indicators do not confirm fraud, they prompt further scrutiny.

Private Investigators

Insurance agencies may employ private investigators to verify the legitimacy of claims. Private investigators employ various tactics, such as researching claimants' backgrounds, interviewing involved parties, inspecting relevant sites, and conducting surveillance to uncover potential fraud. Their expertise in investigation and law enforcement makes them valuable assets in fraud detection.

Detect Personal Injury Mills

Personal injury scams are common, where claimants fake or exaggerate injuries to receive compensation. Insurance companies monitor for patterns, such as multiple claimants receiving similar treatments from the same medical provider or lawyer. This can indicate a coordinated scam.

Computer Systems for Billing Fraud Detection

Billing fraud is prevalent in medical and auto repair claims. To combat this, insurance companies utilize sophisticated computer systems to identify suspicious billing patterns. These systems can detect inflated costs, double-charging, or unbundling of claims to identify fraudulent activities.

Special Investigation Units

Many insurance companies have special investigation units (SIUs) staffed with professionals from law enforcement, medical, and investigative backgrounds. SIUs employ advanced techniques, such as burn pattern analysis, computer simulations, injury assessments, and financial reviews to thoroughly investigate suspected fraudulent claims.

Social Media Surveillance

Social media platforms have become a valuable tool for insurance companies to gather information on claimants. Insurers may monitor claimants' social media activity to identify inconsistencies or evidence that contradicts their claims. This can include posts, photos, or videos that indicate a different level of disability or damage than what is claimed.

Cross-Checking Claims

A simple yet effective method is cross-checking claims across different insurers' databases. By identifying patterns, such as multiple payments to the same person or address, insurance companies can identify potential fraud rings or multiple claims for the same loss. ISO ClaimSearch, an anti-fraud information system, is a valuable resource for cross-checking claims data.

Public Assistance and Reporting

Insurers encourage the public to assist in fraud detection by checking bills, filing police reports, and taking photos after accidents. Additionally, individuals are encouraged to report suspected insurance fraud to relevant authorities, as it directly impacts insurance premiums for everyone.

Assess damage and salvage value

To assess damage and salvage value as an insurance estimator, you must first understand the role of an insurance adjuster. An insurance adjuster's primary role is to investigate claims and determine an insurance company's liability in a given situation. They may decide on a fair settlement amount and ensure that claims are legitimate.

As an insurance estimator, you will need to be able to assess the damage to a vehicle to determine its value. This involves a few steps:

• Inspecting the damaged vehicle: This involves conducting a thorough inspection of the car to estimate the extent of the damage.
• Assessing the car's condition: You will need to determine the actual cash value (ACV) of the car by evaluating factors such as its make, model, year, mileage, and pre-loss condition.
• Estimating the cost of repairs: Compare the fair market value of the car with the estimated cost of repairs to determine if the vehicle is worth repairing. If the repair costs are more than 70% of the ACV of the car, it will likely be declared a total loss.
• Determining the salvage value: If the vehicle is deemed a total loss, the insurance adjuster will then deduct the salvage value from the ACV to determine the final payout. The salvage value is the estimated value of the damaged vehicle's parts and frame. This can be calculated by using a company software program, an online resource, or an outsource company.

It is important to note that each insurance company may have its own formula for calculating the salvage value of a vehicle, and there is no universal list for the salvage value of a particular car. It depends on the vehicle's specific characteristics, damages, and worth in its current state.

Calculate the cost of labour and parts

To calculate the cost of labour and parts, it is essential to consider both direct and indirect costs. Direct costs refer to the expenses associated with employees directly involved in producing goods or providing services, while indirect costs are related to employees who support the production or service process.

Direct labour costs can be calculated using the following formula:

> Direct labour cost per unit = direct labour hourly rate x time needed to produce one unit

To determine the direct labour hourly rate, divide the labour cost by the number of hours worked:

> Labour cost / number of hours worked = direct labour hourly rate

For instance, if the total labour cost for an employee is calculated to be $17 per hour, and it takes them 0.2 hours to produce a single product, the direct labour cost per product is $3.40:

> Direct hourly rate x hours to produce one product = labour cost per product ($17.00 x 0.2 = $3.40)

Indirect labour costs include payroll taxes, insurance, holiday and sickness pay, training, and other employee benefits. To calculate the total labour burden, sum up these indirect costs and express them as a percentage of direct costs:

> Labour burden (%) = Indirect costs / direct costs x 100

Additionally, the labour burden can be calculated as an hourly cost by dividing the total yearly labour burden by the number of hours an employee works. For example, for an 8-hour workday over 52 weeks, with a 20-day holiday allowance and 25 days of predicted absences:

> Total workable hours = Total hours – (Holiday hours + Absence hours)

> 2,080 hrs – (20 days x 8 hrs) + (25 days x 8 hrs) = 1,720 hrs

>

> Total annual labour burden / Total workable hours = Hourly labour burden

> £9,000 / 1,720 hrs = £5.23

When calculating the cost of parts, it is important to consider the cost of materials and equipment required for the job. This may include protective gear, uniforms, cell phones, desks, chairs, and any other supplies necessary for employees to perform their jobs.

By considering both direct and indirect labour costs, as well as the cost of parts and equipment, you can more accurately estimate the total cost of labour and parts for a project.

Fill out insurance forms

Filling out insurance forms is a key part of the role of an insurance company estimator. Here is a step-by-step guide on how to fill out insurance forms for claims:

Step 1: Check for Fraudulent Claims

Insurance estimators must be vigilant for fraudulent claims, which may be made by unscrupulous individuals seeking to profit from an accident that was not their fault. This could involve checking for inconsistencies in the claimant's story or looking for evidence that the damage to the vehicle was intentional or pre-existing.

Step 2: Assess Vehicle Damage and Salvage Value

When filling out an insurance form, the estimator will need to carefully assess the damage to the vehicle. This includes calculating the cost of labour and parts required to fix it. They will also need to determine the salvage value, which is the value of the vehicle in its damaged state.

Step 3: Collect and Organise Supporting Documentation

To support the insurance claim, the estimator will need to gather and organise various documents. This includes original hospital reports, hospital bills, pharmacy receipts, and any other relevant paperwork. It is important to arrange these documents in chronological order, with the most recent ones first, to make it easier for the insurance company to process the claim.

Step 4: Calculate the Claim Amount

Based on the assessment of the vehicle damage and the supporting documentation, the estimator will need to calculate the total claim amount. This should include pre-hospitalisation expenses, hospitalisation expenses, post-hospitalisation expenses, and any other relevant costs such as ambulance charges.

Step 5: Complete the Insurance Form

Once all the necessary information has been gathered and the claim amount calculated, the estimator can begin to fill out the insurance form. This will involve providing details of the insured person, including their name, address, contact information, and insurance policy number. The estimator will also need to provide information about the hospitalisation, including the dates of admission and discharge, the reason for hospitalisation, and any relevant medical history.

Step 6: Submit the Form and Supporting Documentation

Finally, the completed insurance form, along with all supporting documentation, can be submitted to the insurance company for processing. It is important to keep a copy of all the submitted documents for reference and to follow up with the insurance company to ensure that the claim is being processed in a timely manner.

Authorise payments for damages and repairs

Authorising payments for damages and repairs as an insurance estimator, or insurance claims adjuster, involves several steps and considerations. Here is a detailed guide on how to navigate this process:

Understanding the Role of an Insurance Claims Adjuster:

Insurance claims adjusters are responsible for evaluating insurance claims and determining the liability of the insurance company. They assess the legitimacy of claims and decide on a fair settlement amount. Adjusters may work in various insurance areas, including automobile, health, life, and property insurance.

Inspecting the Damage:

When a claim is filed, an adjuster will inspect the damage to the insured property, whether it is a home, vehicle, or other insured item. This inspection involves a detailed assessment of the repairs needed and the costs associated with those repairs. Adjusters may use industry-standard software, such as Xactimate, to estimate repair costs accurately.

Determining the Settlement Amount:

Based on the inspection and the terms of the insurance policy, adjusters offer a settlement amount to the claimant. This amount is typically based on the replacement cost or the actual cash value of the damaged property. The replacement cost covers the expenses to rebuild or repair using similar materials and achieving similar quality. The actual cash value considers the age, condition, and market value of the property.

Handling Multiple Checks and Payments:

In cases where both the structure and personal belongings are damaged, insurance companies usually provide separate checks for each category. If the home is uninhabitable, additional living expense (ALE) checks are issued to cover expenses like hotels, car rentals, and meals. It's important to note that the initial payment is often an advance, and further damage findings can lead to reopening the claim and filing for additional amounts.

Managing Mortgage Lenders and Contractors:

If the claimant has a mortgage on their house, the check for repairs is typically addressed to both the claimant and the mortgage lender. Lenders usually require this to protect their financial interest in the property. In some cases, the lender may put the money in an escrow account and release funds as the repairs progress. Additionally, some contractors may request a "direction to pay" form, allowing the insurance company to pay them directly. It is crucial to carefully review such forms to ensure the entire claim is not assigned to the contractor.

Dealing with Vehicle Repairs:

When it comes to vehicle repairs, insurance companies cannot force claimants to use a particular repair shop. However, they may require additional estimates, depending on the quoted price. Claimants have the option to meet with an estimator at their home or submit a virtual estimate, especially if their vehicle is in poor driving condition. It's important to remember that the repair estimate is negotiable, and claimants can work with their repairer and insurance representative to agree on a final number.

Complying with State Laws and Regulations:

It is essential to be aware of the laws and regulations in your state regarding insurance claims. Most policies require claims to be filed within a specific timeframe, usually within one year from the date of the disaster. Additionally, each state has its own licensing requirements for insurance adjusters, and maintaining licensure through continuing education credits is crucial.

Frequently asked questions