Scanning and calibrations, or more inclusively, vehicle diagnostics, accounted for an immeasurable amount of claims expenses prior to 2015.

Due to system and vehicle design changes, the operation of certain components was directly tied to the vehicles safety systems. To ensure legal protection of the OE, they all released position statements directing shops to complete pre-and-post scans of vehicles that had been involved in collisions. Those position statements set off a series of industry awareness campaigns, most notably an insurer panel discussion featuring State Farm at NACE 2015.

It seemed that overnight the entire collision repair industry could talk of nothing but scanning. A flood of peripheral companies to the industry such as Bosch, Autel, Launch, etc immediately begin a mass marketing campaign to sell diagnostic equipment to shops. Instead of focusing on the safety and precision requirements of diagnostics, it was presented as a financial opportunity for repairers to “sell” within estimates. That didn’t stop as more and more mobile diagnostic companies and software service providers exploded in the industry. Just about everyone, including the estimating companies, wanted to enter the “scanning” business.

Insurers were caught off guard. Due to rapidly changing employee structure, there was not a viable solution for training adjusters on evaluating and determining diagnostic  requirements from a collision. As a result, the default claims management technique rested with submitted invoices of services provided by repairers. Unfortunately, many providers and repairers saw this as an opportunity to create invoices for whatever amounts they determined. In the same city, it was not uncommon for the exact same services for the exact same vehicle to differ by thousands of dollars.

For insurers to predict losses incurred, they must have some reference or structure to base risk evaluation. Years of previous collisions provides underwriting for an average of loss based on certain makes and models with varying multipliers such as the zip code of the garage or the age of the primary driver. However, ADAS components and repair (scanning/calibrations) had no reference for cost. Insurers struggled between 2015 and 2020 (COVID) to find ways to control loss severity and adjust premiums accordingly.

With some adjustments, by the beginning of 2023 insurers were seeing a return to profitable underwriting, but there was still issues for the claims department to address.

First, there must be a way to address potential fraud in the estimating of diagnostics, that is not dependent on the adjuster. In other words, the current claims environment does not allow for adjuster training. Software or AI is needed to provide a framework of repair requirements for claims consideration or compensation. This document is separate from OE repair procedures and should reduce friction between repairers and claims adjusters.

Next, there exist a certain implied liability for any insurer with a direct repair program. If a service is offered to customers and in some ways quality checked or supervised by an insurer than there are certain duties the insurer must meet. Primarily, the duty of safety. Can the customer be reasonably assured that the insurer actively works to supervise providers within the program. Based on estimate data released by CCC during 2022 and 2023, there was still a significant deficiency in shops performing just scans on collision damaged vehicles. In fact, in 2022 only 51% of estimates included any diagnostic operation. If an insurer is going to continue with a Direct Repair Program, having a process for identifying required diagnostic operations for the repairers was essential in avoiding potentially costly liability lawsuits.

This led State Farm in early 2022 to begin testing software providers and services within the industry that specialized in the identification of required scans and calibrations. It is important to note that while State Farm also agrees no software is perfect in their identifications, the most complete offering in testing was Opus ADAS Map.

Opus ADAS Map

Opus ADAS Map is a software that uses the repair facilities created estimate to generate an automated detailed report of all suggested/required operations based on OEM repair information. This report is fully integrated with ALLDATA as well as CCC. This document can not be altered by the repairer or insurer. It ensures that the data or report seen by the insurer will be identical to the repairer. By not allowing alteration, there is transparency in the credibility of the document produced. **Integration with Mitchell is in progress and
expected completion by 1st Quarter 2025**

Select Service Pilot Program

Within the two selected states, the DRP locations are being instructed to begin using OPUS ADAS Map on every estimate. The cost will be $3.00 per report to be paid by the Collision center. OPUS did offer discount pricing to shops; normal price is $5.00 per report. Typical pilots run 4 to 6 months with a constant running data table. State Farm will be comparing the repairable claims from within the test states to selected control states. While it is expected to observe severity differences, the main objective will be to determine if the pilot resulted in safer or more accurate repairs.

What is different about State Farm and Opus compared to asTech and GEICO?

The first major difference is that State Farm has recognized the complexity of diagnostics and calibrations as being a service that bodyshops may not or can not perform as an in-house service. They have also acknowledged the requirement of OEM tooling and OEM procedures.

The asTech and GEICO agreement appears to be a pure pricing structure program. To put pricing caps on scanning and calibration services with little to no account for who or where the service would be provided to the vehicle. It is important to note that at some point, State Farm will also establish some pricing guidelines for its operations. They are actively working with multiple mobile diagnostic providers as well as the National MSOs to determine what cost should be based on a 3rd party expert’s servicing shops.