Fleet operators, insurers, and automotive professionals brace for the annual challenges of hailstorms and their significant financial impacts. Each year, hailstorms account for over 1.5 million auto insurance claims across the United States, totaling roughly $10 billion, with the average insurance payout per vehicle hovering around $5,000. These events’ operational and financial burdens highlight the pressing need for advanced, technology-driven strategies to optimize post-storm remarketing and claims processes.
HAIL DAMAGE MANAGEMENT CHALLENGES
Historically, assessing hail damage has depended heavily on manual or machine-assisted inspections at designated scanning locations. Bob Finkle of NexGen Auto Solutions has effectively managed large-scale catastrophic (CAT) claim sites with specialized hail scanners. These sites inherently struggle to address the numerous scattered claims from outlying areas.
“The conventional method of handling claims can be overwhelming due to a lack of staff, volume of claims, human error, and other factors,” Finkle said. “When a large storm hits a populated area, CAT sites are set up, and a great volume of claims is estimated. However, the majority of claims are spread out, and it is not feasible to have the customers drive to one location. Technology can help process the claims faster, more accurately, and increase productivity. Another great benefit is improving the customer experience.”
The financial burden that hail damage causes can include repair costs, insurance deductibles, and a depreciated vehicle value. Hail can cause dents, cracked windshields, and chipped paint, with higher repair costs depending on damage severity and vehicle type.
Hailstorms account for over 1.5 million auto insurance claims across the United States, totaling roughly $10 billion.
Comprehensive insurance typically covers hail damage, but owners must pay deductibles (often $500 to $1,000), which can strain budgets. Even after repairs, vehicles may lose resale value due to a history of damage reported on platforms like CARFAX.
As a result of hailstorms, auto-body shops are in high demand, leading to weeks-long wait times and leaving owners without vehicles or reliant on rentals. Filing claims and coordinating inspections can also be time-consuming during widespread storm events.
In addition to the inconvenience and time requirements, vehicle owners can experience emotional stress in the form of frustration or anxiety, especially if their vehicle is new or uninsured for comprehensive coverage. Those without comprehensive coverage face full repair costs out of pocket, which can be prohibitive, leading some to drive damaged vehicles or forgo repairs entirely.
Insurance companies, fleet operators, covered individuals, and auto dealers all recognize the need for flexible inspection options in addition to these traditional approaches. As such, there is an industry-wide demand for innovative, scalable solutions that enhance claim accuracy, accelerate processing times, and reduce overall costs associated with storm-related damages.
LEVERAGING AI AND MOBILE SOLUTIONS
In response to these challenges, industry innovators are pioneering transformative digital solutions. One promising advancement is the development of mobile apps powered by artificial intelligence (AI) to streamline hail damage assessments and claims submissions directly through smartphones.
This AI-driven technology enables vehicle owners and fleet operators to immediately capture and upload high-quality photographs of their vehicles following a hailstorm. The app’s AI capabilities rapidly analyze the images, accurately detecting storm damage and severity.
This swift, automated assessment expedites the claims process and significantly reduces the logistical burdens traditionally associated with fixed-location inspections.
BENEFITS FOR FLEET OPERATORS AND INSURERS
The adoption of mobile and AI-based solutions presents substantial advantages.
- Speed and Efficiency: Automated image analysis dramatically reduces the time required for damage assessments from days to mere minutes.
- Cost Reduction: Lower administrative and logistical costs due to less reliance on inspection sites and personnel.
- Improved Accuracy and Fraud Reduction: AI-driven tools ensure standardized, objective damage assessments, significantly reducing opportunities for claim fraud.
- Enhanced Communication: Seamless integration with insurance platforms allows instant claim submissions and quicker payout processes.
Moreover, these mobile solutions could provide real-time weather alerts in the future, empowering fleet managers and individual vehicle owners with proactive measures to minimize potential hail damage, such as relocating vehicles to protected areas or using preventative covers.
TRANSFORMING REMARKETING STRATEGIES
Beyond immediate damage assessment and claim facilitation, these innovative tools hold remarkable potential for enhancing post-storm vehicle remarketing efforts.
Real-time damage assessments facilitate instantaneous vehicle condition reporting, enabling fleet operators, insurance companies, and dealers to initiate remarketing processes quickly. Vehicles can promptly enter online remarketing platforms, reducing downtime and financial loss associated with storm-impacted inventory.
“By transitioning the inspection capability directly to vehicle owners, adjusters, or anyone in the custody of the vehicle, you can instantly receive a graded condition report with all the damage notated and launch the vehicle for sale,” said Mike Francis, VP of sales at PAVE. “This is a true game-changer in terms of speed to listing that can extend far beyond hail events to any point where a vehicle needs remarketing.”
FUTURE-READY FOR STORM SEASONS
When severe thunderstorms and supercells (rotating thunderstorms) that can produce hail and high winds hit, it will take forward-looking organizations to prioritize implementing these advanced, scalable solutions. Collaborations between companies are setting new industry standards, ensuring resilience and efficiency in claims management and vehicle remarketing post-storm.
The transition to AI-powered mobile inspection technology promises to mitigate storm-related financial and operational disruptions and positions stakeholders to use these technologies advantageously in a rapidly evolving industry landscape.
Automotive stakeholders who embrace these innovative, data-driven inspection solutions today will undoubtedly lead the industry tomorrow, mitigate storm season challenges, and be in a position to operate their business in a forward-thinking and strategic way for all of their vehicle inspection needs.
About the Author: Jameel Ghata is the chief strategy officer for PAVE.
