Paperless Storage and Retrieval of Auto Inspection Documents Improves Insurance Company

Cracking Down

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To combat the fraudulent claims that cost hundreds of millions of dollars every year for automobile insurance companies, a growing number of states including New Jersey, New York, Massachusetts, Florida, and California have passed laws requiring photo inspection of vehicles.

Why?

• A vehicle with a dented fender might be sold over and over again. Each owner claims payment for the damage but never repairs the car.
• An expensive car might be insured with several companies. When it’s damaged, or perhaps deliberately totaled, the owner puts in multiple claims.
• A vehicle that never existed is reported stolen. The “insured” collects. Very often, this phantom car is even reported several times to different insurers.
• The variations are many, but the result is higher premiums for honest drivers.

Photo inspection laws require an inspector to complete a form listing the year, make, model, options and accessories and the physical condition of a vehicle and to take three color photographs...the front and passengers’ side, the rear and drivers’ side and the vehicle EPA sticker with its VIN number. On the positive side, these documents will confirm that the vehicle being insured does, in fact, exist and whether or not is has damage.

But there’s also a negative side: these forms and photographs for hundreds of thousands of vehicles each year must be stored and kept available for viewing whenever a vehicle is involved in a claim.

Enter an Automobile Information Company, which provides the service of electronically archiving inspection documents and color photos for insurance companies.

"We're using the new technology of optical disk storage and the DocFinity® Imaging software system with its comprehensive database capability to turn a mandated cost for insurance companies into an opportunity to improve their profitability in underwriting and reduce the cost of claims," says the Automobile Information Company's President.

Optical Image Technology, Inc. (OIT) developed DocFinity Imaging for applications like the insurance companies that have traditionally archived records in rows of filing cabinets in warehouses.

"With the Automobile Information Company, the insurance companies benefit in a number of ways," The Company's President explains. "Their documents are more secure. Their cost is lower than using Polaroid photographs and storing them in filing cabinets. And, their existing applications like policy management and claims management can easily be interfaced with our system."

"The DocFinity Imaging system also gives insurers the ability to utilize the information in their records in data form with special reports generated for management. For example, an electronic system minimizes the costly possibility of unnecessary suspensions and reinstatements that can occur when paper records don't keep up with the fact that an inspection has taken place within the mandated period."

getting started

The process starts when an insurance agent sends the vehicle owner, for example, to one of the more than 350 inspection stations operated by The Automobile Information Company in New Jersey. The Company also has about 150 stations in New York, and the number is growing. New cars and those that have been insured by the same company for at least five years are exempt from the inspection requirement.

After completing the form, the inspector uses a still video camera to record the three images of the vehicle on a computer diskette. The form and the digital photos are then sent to the Automobile Information Company’s data center in New Jersey, where they are scanned into the system.

The Automobile Information Company has multiple 12-inch optical disk drives on-line. A 12-inch disk can store records on up to 60,000 vehicles. As usage grows, the company plans to add a jukebox containing fifty 12-inch disks, expanding its capacity to 3 million vehicles and enhancing its on-line information retrieval capabilities.

At the end of each day, selected information is transmitted directly into the mainframe data bases of the insurance companies that request it so that they can update their files and close their books.

"The essence of our business is the ability to use new technology to efficiently manage information," says The Automobile Information Company's Vice President of Marketing. "By making the process paperless, we save time and money for the insurance company, and accelerate the claims process that benefits car owners."

a wise decision

The Automobile Information Company serves more than 30 insurance companies, including many nationwide carriers. The insurance companies’ staffs use PC workstations that communicate with the Automobile Information Company’s data center over telephone lines when files need to be checked. Hard copies of the forms and photographs can be printed if necessary.

"From the DocFinity Imaging system's fourth-generation-language database, we generate reports that are used by the insurance company management to analyze their book of business," The Automobile Information Company's Vice President of Marketing explains.

"We can correlate, for example, the number of anti-theft devices on vehicles, the physical damage by age of vehicle, and whether the vehicle is brought in for inspection by the owner or by someone else who may be an unlisted driver in the same household."

The benefits of DocFinity Imaging for an operation like The Automobile Information Company are many, Company’s President points out.

"A company's files are efficiently organized into electronic claim folders complete with forms, color photos and associated data," he explains.

For The Automobile Information Company, growth as a service bureau and as a provider of turnkey systems is planned in the number of states and insurance companies that they serve. Also, the capabilities of the DocFinity Imaging technology make it possible to take photo inspections into new business areas such as homeowners’ insurance.

The Automobile Information Company’s President says, “We like the fact that DocFinity Imaging is easy to use. Workstation operators are trained on the system in just a few hours. Each user can view multiple images at one time, and several users can view the same image simultaneously at different locations.”

"Our records can't be misfiled or lost. And they can't be overwritten, altered or erased. Working with Optical Image Technology, we developed a proprietary color capability that enables us to store the true color pictures from our still video cameras or any film media."

"As our clients and our opportunities grow, we plan to grow right along with them," The Automobile Information Company's President says.