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There is no shortage of examples that show the impact of supply chain issues in our current reality. The world entered into a time of turmoil with the Covid-19 pandemic but has seen light at the end of the tunnel lately. The aftermath has brought on significant changes for everyone. One such change is supply issues coupled with a recession. This economic change touches most of us in some way or another whether it was the rise and fall of gas prices, the need for a new computer server, or your attempt at an affordable rental car on a recent vacation. These economic factors affect insurance as well. We are seeing significant changes in our expectations for claims being closed in a reasonable time frame. There are 3 of things most affected during the claims process; parts delays, staffing of claims experts, and rental car availability and time needed.
New cars are being delivered to clients without all the necessary chips needed to make all the features function. For example, a car may be purchased and finally received by the new owner without a chip that runs the heated seats and steering wheel. This is due to chip manufacturing delays and the scarcity of parts. This filters into the need for parts for cars to be repaired after a claim has occurred. Therefore, you likely can not get your car fixed quickly nor will it be completed on time as there may be delays in receiving parts during the repair process.
Additionally, insurers are having a tough time filling job openings for claims individuals to adjust, appraise, and service the claims. This leads to a back log in communications and many that are working are having to work many cases simultaneously. The additional work results in claims not closing as quickly as they used to.
The last part is related to rental cars and their need and availability. Many rental car fleets were sold off during the pandemic as the need was not there. When things started to ’open up‘ and the need for rental cars returned, the aforementioned delays with vehicles being produced led to delays of rental car fleet returning to capacity. A factor I recently found out was that if a vehicle has a recall that needs to be addressed, it can not be rented out. Thus, if the part needed to fix the recall is delayed, that vehicle must sit on the lot awaiting to be repaired further leading reduced vehicles available. Imagine if you had a fleet of 100 vehicles and 50 of them were of one manufacturer that issued a recall. Your working fleet is now cut in half increasing demand and wait times.
There is a compounding affect of things as it relates to claims and the speed to which they are closed. We are working hard to relay communications during the claims process. Claims are undeniably frustrating at times but we are set up with companies that care a lot at the time of a claim and are very willing to make the claim experience a good one, despite some things outside their control.