When an auto accident occurs, the driver works with their insurance carrier to kick off the claims process. Vehicle photos are provided. Repairability is determined. If the vehicle is a total loss, the carrier runs a valuation and captures lienholder information for vehicles with outstanding loans.
But while the insurer guides the driver through the first steps of the claims process, the automotive lender is often unaware that a loss has even occurred. This disconnect between parties can lead to settlement delays and a negative customer experience.
Pulling lenders into the process early is essential to timely, efficient resolution. With earlier notice of total loss, lenders can achieve not only faster payments but also higher customer retention and satisfaction.
Total loss settlements can take nearly a week longer to pay than repairable claims. In fact, just about every aspect of total loss claim resolution takes longer.
Digitizing the process can save significant time and overhead. It’s critical for lenders who want faster payments after a total loss. Digital connections with insurers can automate and accelerate the exchange of documents needed to reach settlement. And ACH payments ensure funds arrive quickly and securely.
But many lenders are leaving value on the table when it comes to total loss notification. On average, the total loss claims process can take around 12 days from date of loss to the last vehicle valuation. That’s 12 days before the lender gets involved, putting them at an immediate disadvantage. The lender must catch up quickly to keep the resolution process moving.
Earlier notice of vehicle total loss can give the lender a head start on the lien/title release process to proactively engage with customers and avoid early delays. By the time the vehicle valuation is run, the lender will have already been pulled into the process, improving visibility while creating a seamless customer experience.
For a financed vehicle, it could be days, weeks or potentially months before the automotive lender is notified of the total loss.
A lot can happen during this time.
If unaware that vehicle loan payments are still required on the totaled vehicle, the customer could miss payments and slip into delinquency. In some cases, it’s only through the delinquent payments that the lender learns of the total loss.
These blind spots could be avoided by reducing the lender notification period. With immediate notice when a financed vehicle is declared a total loss, lenders can proactively reach out to their customers to provide support and discuss the loss process.
Earlier notice of total loss can also help lenders guide their customers through next-purchase decisions. The earlier lenders can engage with their customers about consolidating payments into new vehicle loans, the better the experience will be for both parties.
After working with the insurance carrier for the first days or weeks of the claims process, the customer may have already developed expectations for the remainder of the experience.
If the insurer experience is poor, a negative lender experience could further erode customer trust in both parties. If the insurer experience is positive, then the customer will expect the same from the lender. Either way, delivering a seamless experience can help improve retention and satisfaction.
Customer satisfaction is typically lower for total loss claims than repairable claims, and longer cycle time is a major reason for that. The longer the process takes, the more opportunity there is for additional complications like missed customer payments.
With complaints against automotive lenders on the rise, proactive customer communications and faster settlements can go a long way toward improving customer satisfaction with lenders. Earlier notice of loss helps make that possible.
Visit cccis.com/lenders to learn more about how CCC can help lenders optimize the total loss claims process.