The Documentation Strategy That Stops Insurance Denials

Let’s face it, dealing with insurance agencies can be frustrating. No matter the industry, hoping that insurance accepts your claim is an anxiety-inducing ordeal. In the collision repair world, insurance claims are especially important as nearly 90% of shop revenue across the industry is paid by insurance agencies. 

This presents a challenge as insurance agencies and body shops don’t often see eye-to-eye on labor rates and parts price estimates. 

This article walks you through the strategy to drastically reduce insurance claim denials. This strategy includes airtight documentation practices that will improve your relationship with insurance agencies and get you paid quicker on average.

Why are your insurance claims getting denied?

Insurance claim denials are not a black box. Agencies are strict, yes, but also predictable and straightforward. Once you learn the parameters that these agencies use to determine the outcome of claims, you can drastically reduce denials.

So, why are claims denied?

Insurance agencies want to look for any reason to deny your claim; that’s just the name of their game. Their business model depends, like any other, on maximizing revenue, and to them, that means limiting payouts. There are various reasons that insurance agencies deny claims, including:

• Service not deemed “necessary”
• Price estimation gap
• Incorrect tools or environment for calibration
• The customer was not aware of the service
• Improper or lack of  documentation

The best way to avoid these missteps is to ensure your shop has a documentation protocol that follows OEM-compliant steps. This way, you can limit these delays and denials.

The negative impacts of lengthy insurance processing times

The process of submitting an insurance claim for reimbursement and repair approvals is already long enough. 

These delays in reimbursement can detract from other aspects of your business, causing disruptions in your daily operations. If you must continue to revisit a reimbursement claim from weeks or months in the past, your focus is taken off of the car currently sitting in the bay.

Your margins are already thin, waiting on insurance determinations for payment can be stressful. Perhaps you wouldn’t have enough cash on hand to deal with a current customer. Avoiding claim denials is a must for you in this situation.

Insurance delays have materially negative impacts on your business. These impacts can be limited and even avoided with the right documentation strategy. Let’s look at how you can implement an airtight documentation protocol for your shop.

Your strategy to eliminate insurance claim denials

Here we will lay out your foolproof strategy to reduce insurance delays and denials. Understanding what insurers need to see to approve claims sets your shop up for success.

Pre-repair system scans

Diagnosing a vehicle is important to ensure you provide the correct service, and documenting this process is especially vital. Insurance agencies require you to prove what you serviced was needed in the first place.

Make sure you document:

• Any codes and readings from the scanners
• Your diagnosis
• Your plan to deal with the diagnosis

Calibration procedure documentation

The process by which you calibrate or service ADAS systems is heavily detail-oriented.

OEM specifications change rapidly, in as little as weeks, so ensuring that you are up to date on the service requirements is vital. 

Documentation should include:

• A detailed explanation of the tools used
• Any measurements found
• Verification that your shop followed the correct procedure.

Post-repair validation results

Once you complete the service, the job is not yet complete. You now must perform tests to verify if you conducted the service correctly. 

Your post-repair documentation should include:

• Static test results with the vehicle stationary
• Dynamic test results where the vehicle is in motion
• The results of any verification test to ensure all diagnosed issues have been resolved

Imagine a scenario in which you properly diagnosed and followed proper procedure in calibration, the vehicle passed validation tests, but you failed to document your results. Then, the system you serviced malfunctions again. Not only will you not be reimbursed, you may even be held liable for the malfunction.

Environmental condition verification

Environmental conditions during calibration are also extremely important. Make sure you are up to date with OEM environmental standards when it comes to your calibrations. You should ensure that you document:

• Temperature
• Humidity
• Level working surfaces
• Depending on the service, more such as air pressure

Failing to prove that you had created the correct working space for a calibration can null your insurance claim. While vital to a successful calibration, it’s also vital to your reimbursement.

Customer acknowledgment forms

One last method you must add to your documentation process is ensuring your customers are aware of the services that you are providing. While ADAS integration continues to skyrocket, only 18% of drivers can correctly identify what ADAS is. This means that they may not understand the importance of the service you’re offering, and may feel like you’re trying to upsell them.

Proper customer education is vital to the success of your shop, and having your customers sign acknowledgement forms takes your insurance claims to the next level. Insurance agencies will attempt to find any reason to delay or deny your reimbursement. Showing that you have a strong relationship with your customers, not simply trying to upsell them, goes a long way in building trust.

How does this strategy improve your shop’s operation?

So what does this mean for your shop? 

Simply put, you will see claim processing times and denials decrease. This can have a great impact on the overall operation of your shop in the short term and in the long term. Let’s look at material gains for your shop in implementing this strategy.

Short-term gains

Implementing this documentation strategy can have great immediate impacts on the overall operation of your shop. These improvements include:

• Your focus will be on the car currently in your bay, not on getting paid for last month’s project
• With precise documentation, your workflow will be improved as your technicians will be following the correct OEM procedure from A to Z
• Quicker turnover as fewer mistakes will be made if your technicians are following a more precise protocol

Apart from improving your insurance claim process, airtight documentation has these other material improvements to the overall operation of your shop. Technicians who are more mindful of details will ultimately prove to be beneficial.

Long-term gains

Over a few months or years, improving your documentation protocol will have immensely positive long-term impacts on your shop. Apart from more precise work and better attention to detail, more robust documentation will lead to:

• A better relationship with customers, who will know you provide honest work
• A better relationship with insurance agencies will lead to fewer denials and shorter wait times. Don’t make insurance agents do extra work; they will repay you by making your life easier
• Better margins, more profit, and higher overall efficiency

Building a strong professional relationship with your insurance agency is a must. Think from their perspective: they run a business that also tries to increase profitability, they will look for reasons to not pay out a claim. They also deal with aggravated customers on a daily basis. If you make their job easier and less frustrating, they are more likely to pay out your claim in a more timely manner.

Having tight documentation standards for your shop can drastically improve your shop’s overall success. Not only will you see insurance delays and denials plummet, you will also experience a huge impact on other facets of your business.

How Revv enhances your documentation process

While creating a robust documentation strategy seems like a tall task, there are great tools to help you get started. Revv’s AI powered search and generation tools to get you documenting and calibrating with confidence.

When it comes to all your record-keeping needs, Revv can auto-generate OEM-compliant documentation for each step of the way including:

• Pre-service scans and diagnostics
• Calibration checklists
• Environmental checklists
• Post-service validation tests
• Customer acknowledgement forms

Revv truly does it all, not only does it provide these documents for you, it also provides up to date information on constantly changing OEM specifications and tool or measurement requirements.

Improve your insurance claim wait times with Revv, get paid sooner and more often. Set up a call with one of our experts to see just how Revv does the heavy lifting, leaving you focused on your customers.