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Letter to the Editor
Monday September 30
eAutoclaims' New Auditing Tool Aims to Help Insurers Cut Costs by 'Red-Flagging' Labor and Parts Costs
eAutoclaims, Inc. has launched a new claims auditing application. The new application, eAudit(TM), enables insurance companies to electronically audit an auto insurance claim to "red flag" exceptions, allowing an unlimited number of guidelines to be entered in the process.As part of the launch of eAudit, the company will be offering insurance carriers a free evaluation of the application.
eAudit's operating system features built-in logic that mathematically identifies claims for probable leakage based on historic data from previous claims exceptions. When dealing with auto claims, insurance companies need to track the cost of labor versus the cost of parts and estimate a number or percentage that is acceptable. The companies set their own internal guidelines for repairs and evaluate them on a claim-by-claim basis. Often, special cases arise when those guidelines are not met. When this happens with a single claim, it may not seem significant. However, if such incidents are repeated over time, it can become quite costly to the insurer.
"This technology enables the user to identify those claims that fall outside of their auto estimating guidelines and also 'scrubs' the claim and compares it against a mathematical model for probability of leakage," stated Eric Seidel, CEO and president.
Now insurance adjusters and claims managers can quickly pinpoint inflated body shop labor rates. eAudit automatically identifies instances when a shop's labor rate exceeds the acceptable estimated amount set by the insurer, and the inflated rate is immediately flagged. The new application also verifies the accuracy of the repair and parts' costs.
When it comes to getting estimates, insurance carriers often go by "averages" and random sampling. eAudit takes the guesswork out of auditing claims. It reviews the estimate and pre-audits each claim, which streamlines the entire process. Claims will be batched for an electronic audit and then sent to auditors for double-checking. Should the auditors miss something due to human error, eAudit will catch it and compare it to the insurance company's guidelines.
For example, if a policyholder reported water damage to a car with a newly installed top-of-the-line stereo system and did not report the new accessory to the insurer, funds will only be provided in the amount of the original stereo, rather than the new one. eAudit can also determine if the body shop is using the Original Equipment Manufacturer (OEM) parts and whether the procurement of the parts falls within the insurance company's guidelines.
Such functionality streamlines the claims process for insurers, who no longer have to rely solely on manual auditors to catch these situations.
"Rather than looking for a needle in a haystack, eAudit finds all the needles with the click of a mouse," says Seidel.
eAudit is being released as a follow-up to eAutoclaims' popular eJusterSuite.
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