Issue Date: Warranty Administrator for Dealers Nov 15, 2010, Posted On: 11/15/2010
Five suggestions for getting difficult claims approved faster One of the most difficult situations to overcome in warranty administration is getting approval from the factory for claims that go beyond your self-approval limits. But a good first step is providing the critical information the factory needs to make your authorization requests go smoother.
For most manufacturers, 85 percent or more of claims are paid routinely with no approval or review. Another 10 percent will require the dealership to use its self-approval or obtain prior approval from the factory due to the nature of the repair. Then there are those 3 to 5 percent of claims that you have to have your service representative or someone inside the factory to approve in order to get paid.
This could be done via a phone call, a review in person, or sent electronically through the claims system. It allows your rep the opportunity to review the claim and your comments before making a decision to approve, or reject the claim submission and payment. Regardless of how it is done these claims sometimes end up in payment limbo waiting for the factory to approve them.
This is almost totally dependent on the quality of service rep or factory support your dealership enjoys. It is unclear why some reps have this aversion to authorizing claims. Authorizing claims is a vital part of their job duties, if not one of the most essential. Dealerships are obligated to fulfill factory's warranty commitment to the customer. When the dealership proceeds with a repair that they know will need authorization, they are going the extra yard for the customer and indirectly the factory. Some factory people seem to think they are doing you a favor by approving these claims and convey that they would really rather you work around the approval process. Just why do some reps shrug off authorizing claims?
To be fair, through these economic times the factory is running as thin as dealerships. Reps seem to be spread even thinner across larger geographic areas. It can be an overwhelming struggle for the rep to keep up with everything. There is also some blame to be shared on the dealership side. On occasion a dealership will request some very dubious claims for authorization that can increase a rep's frustration. Even if you have done everything right when it comes to approving claims, the rep's time too often gets occupied by other dealerships not so proficient.
To help put your dealership in the positive category, you should follow a set format when making your request, especially those done electronically. Even when fax or personal review claims are reviewed, a short note outlining these points can be helpful.
1. What authorization do you need?
If you have already obtained a return/reject code (such as excessive labor, beyond warranty, etc.) or if you know the problem, always start with why you need approval. This helps focus the rep's attention on the specific issues of the claim without having to digest the entire repair order and then essentially process the claim in their head to figure out the problems.
2. Remind the reps of previous conversations (if applicable).
If you have previously spoken to the rep about this vehicle or situation, then remind them right up front. For instance, "This is Mr. Jones transmission issue we discussed last Tuesday."
3. What were the three C's?
The next thing the factory will want to know is the complaint, cause and correction. With the cause or correction, make sure there are specific notes that relate to the need for approval as necessary. If asking for extra parts, labor or materials, this is the time to justify those needs.
4. Note any specific considerations
If the repair was done under the advice of technical assistance or you have other prior approvals, mention them as further support.
5. Thank them for their assistance.
Please and thank you goes a long way in making the request as professional and trouble-free as possible.