Between those two articles, P&A readers responded with a total of 17 substantive comments. And these weren’t just “Great job!” comments – no, they were lengthy, detailed, and passionate. Clearly, Don and L’Tonya had struck a nerve.

Managing Editor Diana Jacobi noted this strong reaction in April of 2011 with her article “A Certification Program – Boom or Bust?” As if to confirm that this topic would not go away, that article generated another 12 substantive comments on the P&A website. In fact, the total length of the comments exceeded the length of the articles themselves. In the publishing world, this is remarkable.

The trio of articles and the comments they spawned raised a number of questions in need of answers, including:

• Who will administer the certification program?
• What will certification require?
• How will training and testing be handled?
• How much will it cost?
• Who will pay for it?

Let’s answer those questions.

Who will administer the certification program?

The recently-formed F&I Providers and Administrators Association (FIPAA) will ride point on this effort. In fact, the desire for independent inspector certification was the primary unifying topic in the pre-history of FIPAA. At times, it seemed this was the only thing everyone in the room (or on the phone) agreed on!

The significance of this cannot be overstressed. FIPAA, by its very nature, is focused on Providers and Administrators – those who depend on accurate and reliable inspections and ultimately pay the bills.

The vast majority of the comments to Don Larsen’s and L’Tonya Carr’s articles were written by independent inspectors. This could lead to the assumption that they are the only constituency that sees a problem and desires a solution. FIPAA taking the lead on this issue proves that isn’t necessarily so.

What will certification require?

In the immortal words of Shakespeare, “Ay, there’s the rub.” What level of education and experience should be necessary to achieve certification? Are there any other requirements that should be considered?

The inspectors themselves have suggested several. First and foremost is technical knowledge, objectively measured. The obvious measure of knowledge is ASE certification or, more accurately, certifications (plural).

The National Institute for Automotive Service Excellence (bet you didn’t know that was what ASE stood for!) has curricula and certification programs in over 40 substantive areas. Of greatest relevance to independent inspectors would be the Automotive & Light Truck Certifications. The distinct certifications under that rubric are:

A1 – Engine Repair
A2 – Automatic Transmission/Transaxle
A3 – Manual Drive Train & Axels
A4 – Suspension & Steering
A5 – Brakes
A6 – Electrical/Electronic Systems
A7 – Heating & Air Conditioning
A8 – Engine Performance
A9 – Light Vehicle Diesel Engines

Achieving the first eight of those ASE certifications earns the lucky candidate Certified Master Automobile Technician status. For inspectors, of course, that would be overkill. It is not an inspector’s role to diagnose the problem, much less fix it. Rather, it is for the inspector to confirm the technician’s diagnosis. To do this competently, A1 – 4, 6 and 7 would seem appropriate.

But technical knowledge alone is not sufficient. What about relevant work experience? Here again, ASE provides some useful guidance. To earn ASE certification, a candidate must prove at least two years of relevant, full-time, hands-on work experience. While one could argue an inspector should not require as much experience as the technician actually doing the repair work, two years seems a reasonable minimum. And requiring more experience than a technician is probably excessive.

Finally, are there any subjective factors that should be required? Those who responded to the three earlier articles consistently harped on “people skills.” But how does one measure something that squishy?

One approach would be to include levels of customer service that are expected of professional inspectors in the certification training and test on those points. This would allow one to at least objectively prove the candidate knew what kind of behavior is expected in the field. Whether the candidate lives up to those expectations is a separate matter.

But that matter can be addressed. What if FIPAA created a short, standardized feedback form for repair facilities and Administrators to complete and return to FIPAA in connection with a candidate’s application? FIPAA could take responsibility for calling the reviewers to confirm the accuracy of the forms. Some minimum number of positive reviews, or ratio of positive to negative, would be required before certification is awarded. Other suggestions are, of course, welcome.

At the end of the day, the industry would profit from some degree of standardized processes, forms, expectations and understanding. Such standards are currently lacking. As L’Tonya Carr put it, inspector standards “depend on which inspection company is utilized, and believe me the ‘standard’ varies significantly. Even when the same inspector is used by multiple inspection companies, the inspector’s work quality can differ.”

How will training and testing be handled?

Online, mostly. In order to make the program affordable, a web-based delivery is pretty much a must. The candidate would access a Learning Management System, or “LMS,” through the FIPAA website and enter a unique username and password. Material would be offered in short, digestible chunks of multimedia presentations. After each module is completed, a test covering that material would be presented. The LMS would track usage and test results.

After all required modules are completed, candidates would take a comprehensive final exam. Upon completion and verification of experience and performance (via the reviews), certification is conferred. A recertification test (shorter than the comprehensive certification test) could be offered every other year to maintain currency.

Recall that I said “mostly.” In discussion is the prospect of holding the initial certification review and test live and in-person in conjunction with the F&I Conference in Las Vegas this coming September. Watch this space for details as they become available.

How much will it cost?

Well, that depends. FIPAA’s Inspection Certification Working Group is in the earliest stages of its work, and much needs to be done before this program launches. But it is understood that for the program to gain traction, its value must exceed its cost by a wide margin.

So I ask the inspectors out there, what do you think the value of certification is, in dollars and cents? And understand that the infrastructure (LMS, bandwidth, development of curricula, staffing, fulfillment, etc.) is going to cost something. Certification is a good idea, but not a good enough idea to lose money on.

Who will pay for it?

In the first instance, the inspectors themselves will. But before you assault my home with pitchforks and torches, consider that it is in best interest of Providers and Administrators to engage certified inspectors. Isn’t that worth something to the P&A community? Of course it is. Should the P&A community pay some premium for a certified inspector? Justice and logic suggest the answer is affirmative. How much will the market bear? That remains to be seen, of course, but the certification program should allow independent inspectors a rationale for their first meaningful pay raise in years.

Jon Anderson, Vice President of Sales and Marketing for American Guardian Warranty Services, confirms the value of such certification. “Training and consistency are always things that help us all do our jobs more efficiently. The inspector is our eyes and ears at the dealership. The better equipped he (or she) is to do that job, the better we are able to serve our customers.” Certification obviously serves that end.

Final Thoughts

Previous articles in this publication and the reader response they triggered proves there is strong grassroots support amongst inspectors for a certification program. And the support of FIPAA indicates agreement within the P&A community. Now comes the hard work: making it a reality.

To that end, I encourage reader response on this topic with as much specificity as you dare. You may safely assume all such comments will make their way to the attention of the FIPAA working group that is charged with turning wishes into reality. This is your chance to shape policy and the future of the inspection market. We welcome your input, and look forward to incorporating it into the independent inspectors certification program.

So, I asked Jeff Roberts, Vice President of Claims Administration with Easy Care, Ron MacPherson, an independent inspector with Inspector LLC and L’Tonya Carr, owner of the inspection company Carr Appraisals, if they could provide their thoughts and ideas on ways they feel the process could be improved.

I first asked them what, in their opinion, was the reason for a decrease in volume of inspections that have occurred over the past couple of years. All three participants agreed that the economy was a major contributing factor to this decline. L’Tonya broke it down into three components:

• First, as Don Larsen mentioned in his article, inspections have historically been perceived as a “cause of considerable disruption, expense, and loss of productivity for the customer, dealership, and administrator.” In an attempt to control costs in a bad economy, many efforts are made to reduce this ‘necessary evil’ due to greater emphasis on customer service and retention.
• Second, as a result of the perception that there remains a lack of ‘quality inspectors/ inspections’ to choose from, Administrators/Providers may, and oftentimes do, decide to ‘cut costs’ by cutting out inspections altogether.
• Last, as history has proven, the worse the economy, the greater the fraud/upsell. So, although short-term costs of ceasing inspection services may be reduced, long-term costs of future claims can be exponential.

I next asked participants if they could provide some suggestions that they feel could improve any perceptions as well as reduce actual occurrences of disruptions, lost time and increased expenses?

Jeff Roberts noted, “There is no way around the fact that inspections are going to be disruptive, more expensive and create some lost productivity for everyone involved. But to put it in perspective, take a $4,000 transmission repair as an example, pulling it off the rack and pushing it aside for inspection doesn’t take any more time than waiting on a customer to make a decision on a repair. Most consumers will not provide an approval on your first call for something that expensive. They will likely call around for more estimates, talk to their friends and family for advice and then call back the next day or so with their decision. The repair facility ends up waiting on us or them either way.”

That being said, Roberts did go on to say that one of the best ways to minimize these perceptions &/or actual occurrences requires “good planning and good communication. The key is making sure the vehicle is truly ready for inspection, all disassembly is complete and the technician is available to show the failures.” Other suggestions included:

• The value of having the inspector called in should be explained to customers. They should be aware that inspections provide “protections” for them, as well as for other parties involved.
• L’Tonya recommended that Administrators and Providers could place greater emphasis on communicating their inspection expectations with the repair facility before the inspector arrives, and provided some examples such as, “type of testing, level of tear down, and how they want the failure demonstrated. Any of these would vastly improve overall process perception and relations between the involved parties.”
• Ms. Carr further recommended that a possible way to reduce perceived and actual disruptions, expenses and lost productivity for all parties involved is to put a tracking system in place which can “monitor and address issues that affect any of these areas, from both the Administrator and Inspection side.” She further explained that “Carr Appraisals tracks ‘re-inspections’ and looks for trends which impact expenses and performance; we track inspection ‘completion’ times/delays, and look for trends and issues which impact expenses, performance and productivity.” The system she uses reports the average time/hours of inspection completion by client and/or inspector, and can provide information on reasons and who caused them.
• Ron MacPherson has noticed that some repair facilities are trying to improve the process by utilizing extended warranty coverage as part of their customer servicing and some provide low cost rental or loaner automobiles to their customers.
• Lastly, L’Tonya suggested that there be better use of automated transfer of inspection requests and return of information. She noted that although almost all parties have the capabilities of doing so, a delay seems to occur which is often the result of being put at the low-end of the priority list and sometimes cost, though she stressed (and I have to agree) that with the “high-tech” world we live in today, there has been a decrease in most technology costs and therefore they shouldn’t be a driving factor.

I then asked, “What can be done to improve circumstances that lead an inspection to go awry due to poor communications with/from the repair facility, or poor preparation or insufficient processes within the administrator?”

All participants said that communication is of the utmost importance and that both inspectors and repair facilities need to be aware of any expectations that the Administrator and Provider have. Roberts noted that “the challenge is getting everyone on the same page. The service writer, the technician, the adjuster and the inspector all have to be on the same page as to what is trying to be accomplished.”

L’Tonya suggested that the Administrator/Provider provide as much information regarding the present claim and any past claim or occurrences available. And, Ron further commented that often times the repair facility has difficulties contacting the advisor or that time is wasted waiting for the advisor to return the call(s) regarding the claim. He suggested that alternative means of contacting these advisors by means of cell phones or by providing the advisor with an alternate contact at the repair facility like a shop foreman or service manager so that time is not wasted waiting for the advisor’s return call to the repair facility.

Not only do these solutions address the communication factor, they can also improve turn around time as well.

L’Tonya also mentioned that an area in need of improvement that affects turn around time is how quickly photo documentation is available. She noted that “there are several field inspectors who already utilize equipment in the field to transfer quality photo documentation directly from the repair facility and this has expedited the process immensely.”

Turnaround time at EasyCare is pretty satisfactory according to Jeff Roberts. He noted, “Sure we would like to have a quicker turn around time but almost all of our inspections are completed within 24 hours of the request and many are done the very same day. We are very sensitive to the needs of the repair facility where they need to be working on vehicles, not standing around waiting for inspections.” His thoughts are that if a clear expectation is communicated of what is needed to be reviewed when the inspector arrives, turn around time will remain optimal and hold-ups are less likely to occur.

While still on the subject of communication, L’Tonya said that if Administrator and Provider standards were possible, it would help with consistency among methods to communicate credible inspection findings & other information. An example she gave was that she could be looking at identical GM model transmissions with two different Administrators, and the inspection test or procedure and information required by each administrator could be VERY different. This not only can cause confusion but can also prove cumbersome for the inspector.

Technology is a major player in the job of the inspector. It also plays a huge role in the communication between the inspector and the Administrator &/or Provider. Don Larsen’s July 2010 article mentioned that we were on the threshold of having the ability to communicate with the inspector while they were still at the repair facility so that the review of photographic documentation could occur in real-time rather than waiting for uploads the next day. So, I was curious to find out if we have passed the threshold and if real-time communication was occurring almost one-year later. The responses I received varied.

Being in Hawaii proves to be a bit of a challenge for Ron MacPherson, and although calling in reports from repair facilities has been a part of their process for some time now, loading pictures (including formatting, titling and resizing) is not always possible. This is because 1) this process takes time, and 2) Wifi coverage is not always available, making it impossible to download the picture while on site.

Like Ron, L’Tonya Carr said that they have been verbally communicating with clients from the repair facility for years, but because the internet is much more reliable at her client sites, the majority of the inspectors who work with her are able to transfer the necessary photo documentation directly from the facility to Carr Appraisals website allowing “the Administrator almost instant access to the picture.”

Many of these roadblocks occur because everyone is pointing the finger at each other. So how do we hold everyone accountable? Based on L’Tonya and Ron, the following suggestions were recommended:

Repair Facility – Communication between the inspector and the repair facility is, again, of extreme importance and can stymie the entire inspection process. Number one is to make sure the vehicle is ready for inspection before the inspector arrives on site. Perhaps the repair facility should be monetarily responsible should the inspector incur prolonged wait time for the vehicle to be ready or should it be necessary for the inspector to make a return visit to complete the inspection. Repair facilities should not restrict needed customer information from the inspector.

Inspector – It is the inspector’s responsibility to make sure the inspection is thoroughly performed and completed before he/she leaves the premises. The inspector should be held responsible monetarily for any damage resulting from his/her neglectful actions.

Administrator &/or Provider – as mentioned earlier, expectations should be clearly communicated to both the repair facility and the inspector BEFORE the inspection begins. Perhaps a monetary responsibility should be imposed here as well.

My final question covered compensation. From both the inspectors view and an administrator view, the consensus was that there should be a standard “minimum” rate. Jeff Roberts commented that “Some inspections will be close by and take little time to inspect, while others will take longer and involve more traveling distance. By charging a ‘fair’ flat rate for all your inspections, you make it fairer for everyone and keeps things simple from a billing perspective.”

L’Tonya noted that though there is truth to this, she feels that additional monetary consideration should be given based on experience, education, technical abilities, full-certification, and locations of inspection site (especially if outside a particular range of the inspector’s base territory, for example 50 miles).

While Jeff, L’Tonya, and Ron provided a wealth of insight about the additional issues that are perceived or that actually occur in the inspection process, and they definitely provided some terrific ideas to improve the processes, it looks as though it may get rougher before it gets easier. The good news is that communication was the number one mentioned improvement or solution for almost all issues. If each party could simply work on ways to better improve the process through improved communication, it seems very likely that the changes to come will be off to a great start.

There have been an overwhelming number of reader comments and discussions, both among the staff here at P&A Magazine and among others in the industry. Because of this interest, I decided to consult with several people in the industry to see what they think an Inspector Certification Program should consist of and how it could benefit all parties involved.

All participants whom I spoke with agreed that there definitely appears to be a need for a certified inspectors program. These participants include Jeff Roberts with EasyCare, L’Tonya Carr with Carr Appraisals, and two independent inspectors, Len Marshall and Alan Bridges. All participants additionally agreed that the industry as a whole could benefit from such a program, but concerns exist, as explained later, as to whether it is even feasible to add another cost to the inspectors’ already expensive set of equipment.

There are several factors that contribute to this need. The prevailing factor being that the quantity of trustworthy, credible, quality inspectors has significantly decreased over the past few years, and that the industry remains to be plagued by those who are unqualified and oftentimes untrustworthy.

The decrease in quality inspectors is attributed to inspectors moving to jobs in other professions due to lowered income caused by (1) higher costs associated with maintaining a position as an inspector, and (2) less available inspections which are also further apart from each other caused from closings of dealerships and repair facilities. The latter part of which is is a direct result of the decline in economy over the past few years.

As L’Tonya explained in her November article, this smaller pool of qualified, trustworthy inspectors opened the door for those inspectors who are under-qualified, who are potentially less credible and who often times charge less. All participants I spoke with agreed, and most held the opinion that under-qualified inspectors had a lack of proper training and standards for what is necessary to have during an inspection.

The advent of a Certified Inspector’s Program may not solve all of the issues that can cause a bad inspection or that attribute to under-qualified and under-credible inspectors, but as L’Tonya Carr noted, “It’s a great place to start. Knowing that an inspector is well qualified through training and certification should allay some TPA concerns of trustworthiness.” She further commented that a program like this “may not ‘keep out’ a lazy or dishonest inspector, but it CAN protect good people and make it much more difficult for the others to operate.”

Len Marshall noted that “adjustors should be held to the same standards as well.” A certification for inspectors could very well include a program for adjustors. By doing so, accountability among both parties is sure to improve. If TPA’s and Insurer’s require that inspectors be certified, and if the inspector loses his certification, he cannot be used as an inspector. This in turn makes him or her accountable, and therefore encourages the inspector to do the best possible job he or she can. This also can create a sense of consequences for the inspector who currently performs under par. As a result they become more credible and trustworthy to TPAs, Insurer’s and Repair Facilities.

I asked these industry experts, “What should be included in a program like this? Should it only address ‘technical knowledge?’ What about a code of conduct, inspection standards, or continued education?”

Jeff Roberts provided a perspective from the TPA/Insurer’s side replying, “You would have to go beyond the technical aspect. There are plenty of very technical folks out there who I wouldn’t hire to inspect a vehicle. One big obstacle for any TPA is ensuring that the inspector is not perceived to be approaching the inspection as a match of wits to see who knows more, the technician or the inspector. ‘People’ skills are as important as the technical aspect.”

Inspectors I talked with expressed the same thing. All felt that focusing on technology alone was not enough. Len Marshall commented, “Technical knowledge itself is almost useless without the knowledge of all of the other components of a proper inspection.”

L’Tonya added, “the field needs to be educated on the ‘true role’ of an inspector today. The relationship between TPA, Insurer, and VSC holder has seen significant change over the past several years. Subsequently, the role and expectations for inspectors has changed. Technological knowledge alone, does not make for a ‘good inspector.’ You can be the most ‘technically knowledgeable’ inspector on the planet, but if you don’t possess good problem solving skills, reasoning skills, and communication skills (both oral & written), you are wasting the industry’s time and money.”

Roberts pointed out that “you have to go beyond the technical aspect. There are plenty of very technical folks out there that I wouldn’t hire to inspect a vehicle.” He further mentioned that ‘people’ skills are equally important.

Developing industry-wide standards and procedures (which include both TPAs and Inspectors) was considered by most of the participants I talked with to be very important and necessary to be included in such a program. Another idea was to incorporate standardized forms and photo requirements. This would streamline the process regardless of which insurer, TPA or Repair Facility one is working with.

I next asked if this certification should involve some form of apprenticeship program?

I got mixed opinions on this question. An argument for an apprenticeship program was that oftentimes there is so much to perform during the total inspection process that to throw someone out into the field without at least a minimum of hands-on training would defeat the purpose of the certification program. But as Alan pointed out, “Who would pay the apprentice? The Inspector? The organization providing the certification? Both?”

The thought of additional expenses for an inspector is a very sensitive subject as L’Tonya expressed in her article, “Where Have All The Good Inspectors Gone,” and will be addressed very soon to come.

So who or what is going to get this program off the ground? Back in his July 2010 article, Don Larson suggested that some form of independent organization, such as AFIP which is an independent organization for the F&I Industry, coordinate such a program.

Apparently, similar thoughts exist among inspectors as well, as both L’Tonya and Len thought it would be a good idea to have such an organization put together this certification program. Len suggested NAISE, or a similar entity, that would have at least 5-years of general automotive field background, that would understand and have a great deal of knowledge of automotive business operations, and that has diagnostic technical training.

Then, of course, is the question of how would the program be delivered?

Although it was mentioned that a classroom setting would be “ideal,” it was unanimous that on-line and web-interactive training and coursework was the “way to go.” It was also mentioned that the only true way to actually certify someone after his or her completion of training is through evaluation of actual field work. This brings us right back to the idea of whether an apprenticeship program is necessary as part of the program. Which also brings us right back to who is going to fund this type of program (apprenticeship or not)? What about fees to become certified?

L’Tonya suggested that it could potentially be funded by TPAs, Inspection Agencies, and Member Dues. This would definitely spread the cost of such a program over several sources and could possibly make the cost for the inspector fairly reasonable. A point I would like to make here that everyone should take into consideration is that there are many industries where licensure and accreditation come at a price.

Accountants have to take the CPA exam, a cost of over $1,000, and that is just to take the exam, that does not include any courses that may be necessary to pass this test or association fees that ensure the accountant his or her credibility. Lawyers have to pass the Bar Exam and pay any association fees necessary for credibility in their community. Insurance, Annuity and Financial Instrument Brokers have to pay for licensure, association and continued education courses in order to remain current and available to practice in their profession. My point here is that these certifications assure the public and potential clientele for each profession that the person in whatever profession they are in is properly trained, is credible and has the proper knowledge to perform the tasks they are representing they can perform. None of these come for free.

A certification program for the Inspection profession is a MUST. Not only will such a program address accountability and trust issues among TPAs, Insurers and Inspectors, it will also create an even playing ground for the Inspectors themselves. It will ensure that all inspectors who are used, are fully knowledgeable and trained in standardized processes that ensure all parties involved that they are working with credible, qualified inspectors making the inspection process as a whole a very dependable, efficient process.

I have written this critique to share my perspective as an inspector on our industry (the VSC claims administration industry) and offer ideas to solve the problems. I accept my share of responsibility for where the inspection industry remains today. And, although I am not claiming to have the magic bullet and don’t know if my ideas are among the best ones out there, I would love to hear your thoughts on what I do have to suggest so that we, as integral parts of this industry, can begin to work out solutions to our common problems.

The table below provides a comparison of the inspection process over the past 15 years and some of the changes that we have seen occur.

*Attributed to significant increase in multi-component failures inspected; increase in number of photos required; technical advances in vehicle design; intensity of testing required for failure verification; verbal report hold times; transfer of information from repair facility, which is not an entirely new process. There have been previous unsuccessful attempts in the past to replace inspectors through technological advances.

**Varies based on which inspection company you work for, and not necessarily based on technical knowledge/ability.

Increased Costs

Anyone who makes the claim that additional technological advances “don’t cost inspectors money or expose them to liabilities” is not viewing the industry through the eyes of an inspector. As the comparison shows, technological advancements have made it necessary for an INSPECTOR to make personal investments for often costly equipment such as digital cameras, desktop and/or laptop computers, Internet and WiFi service and cell phones – many of which require continual updating so that we can continue to stay current with the most recent technology necessary to keep up with our providers, dealerships and to stay ahead of our competition.

Then we have the effect of significant increases in gasoline prices since 1985 – approximately 166 percent. In spite of all these changes and efforts to improve our inspection processes, not only does it take longer to perform a single mechanical inspection, 95 percent of all inspectors have not had the option of increasing their base rate to cover these additional improvements and expenses. In fact, I have heard of many instances in which inspectors were required to LOWER their base fees. To an inspector, time is money, and this creates an unpleasant, yet unavoidable, dichotomy for the inspector because inspections are more time consuming, yet more inspections are necessary to maintain the same income level as 20 years ago. The result is that quality suffers!

Increased Competition

During the late 1990s through 2007, the volume of industry inspections was unbelievably high. There was a push for quicker arrival at repair facilities, much of which resulted in the birth of several new inspection companies (many of which have since gone out of business). Many of the here-today-gone-tomorrow inspection companies were started by former field inspectors, or claims adjustors who wanted to quickly cash-in on the significant money they saw being spent on inspections. They did so by arming themselves with proprietary information they “borrowed” while working with inspection agencies. Their strategy was simple, “we will offer lower inspection fees to gain a bigger share of the industry’s inspection volume.” And hence, the price wars began.

Quality of Inspectors

Yes, I have a vested interest in increased inspection fees, but right now I am focused on the problems that all of us have contributed to. As an industry, the quest to provide faster service has resulted in unintended consequences, from which we have yet to recover. Volume was at its highest, inspection prices were being reduced, everyone wanted 24-hr service and quicker return of written and photo documentation was being required. It was a mad rush to bring on new inspectors and accommodate the industry’s wishes. This is where we began to experience problems with the technical knowledge of inspectors.

From where I sat, with very few exceptions, the industry didn’t seem to want to hold inspectors or agencies accountable for their actions (or lack of actions in many cases). This further allowed for the expansion, and use, of technically unqualified inspectors. The unqualified inspection workforce (albeit presently still the minority) has led to trust concerns throughout the entire industry – and let’s face it, an inspector is one of the industry’s strongest lines of defense against fraud. We truly become dysfunctional without a high level of trust. This includes the inspection agencies as well, who should have the greatest control over an inspector’s use/performance.

The entire industry, including myself, has had a hand in creating these concerns, and it will take a commitment by the majority to fix it. Industry inspection volume has decreased significantly over the past 18 months, and the lesser qualified/lower paid (sometimes untrustworthy inspectors) have negatively impacted the financial viability of the good ones (many of which have taken part-time jobs to survive, or have quit altogether).

We must weed our garden now, and fertilize the remaining good crop of inspectors. I am committed, along with my organization, to helping in any way I can to bring about the necessary change(s). The following are suggestions about how we as an industry can begin to accomplish our goal and bring about change:

1. We acknowledge there are serious issues with QUALITY, TECHNICAL KNOWLEDGE, ACCOUNTABILITY, and TRUST, along with why they exist. If we continue to close our eyes to these issues, incorporating the available technical advances will just be “window dressing,” and in many cases not even “designer window dressing,” for a plethora of problems yet to come. A prime example is the use of the cellular phone for inspection photos. Phones without flash or manual focus capabilities can lack the necessary detail required for taking a useful photograph.
2. We acknowledge and accept that inspection fees at rates lower than 20 years ago are not likely to bring about the necessary change at the required pace.
3. Realize that inspectors’ compensation should be more in line with their counterparts/peers such as Shop Foremen and Lead Master Techs (on average, they are presently below these levels).
4. Realize that an inspector only has between five and six hours per day in which to perform inspections (especially considering travel, RF breaks and lunch hours, and customers in service lanes).
5. Realize that by not holding repair facilities accountable for their fraudulent actions, and by simply restricting an inspector from a particular facility upon request, may have consequences.
6. Realize the importance of knowing your inspection agency/partner (financial standing, how they treat their inspectors, how/what they compensate their inspectors, willingness to accept responsibility and accountability).
7. Establish an inspector certification and rating program to include code of conduct standards, technical knowledge, ongoing technical training, diagnostic capabilities, problem solving skills, communication skills (written and verbal), personal responsibility, trustworthiness and legal ramifications of their inspection opinions.
8. Establish an industry review panel, where concerns regarding an inspector’s lack of qualifications, accountabilities or trustworthiness can be reviewed and shared with the entire industry.
9. Consider standardizing inspection procedures (from an inspector’s point of view).
10. And last, but certainly not least, perhaps it’s time to consider two-tier inspection pricing, not based solely on an inspector’s technical qualifications, but consideration also given to the type/extent of information verification and how that information is being returned to the client.

A few years ago, as a VSCAC speaker, I expressed concern about the direction of the inspection industry. Today, I worry about how long a pool of inspectors will actually be around. I would greatly appreciate hearing your impressions and ideas, and hopefully we can start to improve things together.

The process is changing with the industry’s latest evolution. Warranty Inspection Services’ new inspection technology provides a new level of detailed vehicle data.

WIS’ VeriScan tool includes an OBDii interface unit that is able to access diagnostic information from the vehicle’s engine and power management control unit (ECU/ECM). VeriScan facilitates the encrypted WiFi/cellular transmission of vehicle data and photos, as well as the inspector’s written report, to WIS’ secure servers.

A vehicle’s OBDii data, mandated on all vehicles in the United States since 1996, allows administrators to recognize fraud, answer questions about pre-existing conditions, avoid misdiagnoses of vehicles and aid in the accurate determination of liability.

“Administrators have been asking for a faster process with more detailed, accurate information,” says Chris Rand, co-president of WIS. “They can now access all the information about the vehicle while the verbal report is being given.”

While the inspector is still on-site, the administrator can determine if any photos are blurry, if additional angles should be captured or if other technical issues need to be clarified.

Glenn Gonzalez, director of claims for SRI, says the availability of all the data at once is particularly helpful when there is a dispute. “Our job is to get the customer back on the road ASAP and collecting information from the vehicle helps us get to the correct answer faster. This system makes inspections happen in real time.”

WIS’ pricing structure has not changed with the release of VeriScan. “We don’t think price should be a factor and we don’t want administrators to bring price into their considerations,” Rand says. The company has assumed all the expenses related to the new system.

In addition, WIS provides laptops and the VeriScan system to the inspectors it works with and accepts all liability. Independent inspectors pay a refundable deposit before receiving a laptop, but do not have to purchase any additional equipment or pay any monthly fees.

“VeriScan does not cost inspectors money or expose them to liability,” Rand stresses.

Customers of F&I Administration Solutions and StoneEagle can use their existing software to connect to the WIS system, eliminating the need for a third-party software system.

F&I Admin has integrated inspections from WIS into its SCS Auto VSC platform. The integration includes the ability to submit inspection requests, receive alerts that inspections have been completed and links to completed reports all directly from within the SCS Auto system.

David Trinder, CEO of F&I Admin, expects this partnership to result in significant time saving during the claims process for F&I Admin’s SCS Auto users.

“Our company’s strategy is to connect to all partners that create value and add efficiencies for our customers,” Trinder says.

WIS is now working on an updated version of the VeriScan tool that will include video and sound. Rand says the goal is to make the process as close to a live inspection as possible. “These process improvements are not meant to be window dressing changes, but rather they are fundamental advancements for the industry.”

Vehicle service contract administrators require independent inspections prior to making decisions about the validity of claims for a variety of reasons and circumstances. Some of these reasons include

• verifying the vehicle’s odometer reading
• verifying that an actual covered “failure” occurred
• determining the extent and the cause of damage
• confirming there are no vehicle modifications, commercial use or physical damage

While these are all legitimate grounds for interrupting the flow of the claim process, the assignment of an inspection has historically been viewed as a cause of considerable disruption, expense and loss of productivity for the customer, the dealership/repair facility and the administrator.

There is no questioning the validity of the occasional call for a second set of eyes and ears to verify reported findings, substantiate that the vehicle hasn’t been abused or confirm that some other non-covered condition exists. However, many in the industry have been questioning whether something can be done to further enhance the process to make it more dependable and efficient.

The matter of turnaround time is only one frustration related to independent inspections. Another issue is the credibility and qualifications of the independent inspectors of today. The reality is that not all inspectors are created equal.

As mentioned in previous articles and presented at various trade gatherings, the automotive industry has experienced tremendous technological changes and growth in the last 10 years. These changes have made the world of automotive mechanical repair a much more challenging environment than it ever has been. Service contract administrators often depend on a third party to help them evaluate reported conditions and the reported cause(s) of failures to determine whether a covered breakdown has occurred.

This process can be derailed when an under-qualified inspector is assigned to assess the situation. Sometimes the culprit is a lack of technical knowledge and other times it may be an indifference or inability to produce a quality report of their findings. Either way, the administrator, the repair facility and the consumer are usually caught in an untenable situation when the inspector fails to perform effectively.

Many factors can cause an inspection to go awry and some have nothing to do with the inspection assignment process, the inspection company or the inspectors themselves. In some instances, poor preparation or insufficient processes within the administrator can be blamed. In other cases, it can be the result of poor communication with or from the repair facility.

This occurrence is most prevalent in the area of diagnosis when component disassembly is required and information relating to the level of diagnosis or the stage of disassembly is miscommunicated by the repair facility or the administrator.

In other words, a number of factors can make the inspection process a positive or negative experience.

However, when the snafu is the result of an under-qualified inspector, administrators typically feel they have little recourse. They depend on the inspection agency that assigned the job to instigate corrective measures. In many cases, the agency has little or no leverage over the independent inspector.

When inspection agencies try to hold an inspector accountable (sometimes monetarily), they sometimes hear the following: “I just won’t do any inspections for that (service contract) company anymore” or “I don’t need to work for you anymore, because no one else beats me up like you do”.

Ineffective or sub-standard results in any other trade would certainly result in remedial action and/or loss of work. Apparently this does not necessarily hold true in the inspection industry.

Inferior Inspectors Give All a Bad Name

We certainly have indications that not all inspectors are created equal. However, it should be made clear that there are many very qualified inspectors working in the industry. The point is that the industry lacks standards or criterion to gauge the credibility and qualifications of an inspector.

Inspection agencies can inquire about whether the inspector applying to do business with them is “ASE Certified;” however, that measure alone is not sufficient to identify undesirable candidates.

While the agency is responsible for producing a quality final product (i.e., a written inspection report) that reads and translates correctly and represents the facts by painting an accurate picture, the theory of “garbage in-garbage out” does come into play.

In addition, standards relating to the manner in which inspectors conduct themselves and communicate with the administrator’s dealers and repair facilities must be spelled out and considered as well. Industry experts and inspection agencies largely agree that little can be done and little is done to regulate and control independent inspectors.

As a matter of fact, almost anyone can decide to perform inspections for a living. They can “hang a shingle” and start their business as an independent mechanical inspector. It is likely that hundreds of inspections are being performed every day by less-than-qualified individuals.

Until some sort of certification process is put in place, the overall quality of inspections will continue to decline. This industry needs a sanctioning body similar to the Association of Finance and Insurance Professionals (AFIP), which serves this function for the F&I industry.

Certification will instill the ethical guidelines, training and ongoing support that is necessary. This foundation is tremendously important to the service contract administrator’s bottom line because this is truly where the claim disbursement process starts in many cases.

As in other trades, a certification program would include requirements the candidate would have to meet to become an inspector. This would eliminate someone with limited or no automotive mechanical experience from becoming an independent inspector. Depending on the criterion, applicants may have to apprentice under an existing certified inspector for a period of time.

Short of creating a national inspector certification program, which would require cooperation from a number of service contract administrators and inspection agencies, a recognized industrywide “do not use list” could be developed. An independent group would need to be formed that would establish the benchmarks, review and monitor who and why an individual would be placed on this list.

In addition to independent inspectors, not all inspection agencies are created equal either. About seven to nine major inspection agencies serve the automotive industry, as well as a number of smaller entities that are typically start-ups by former independent inspectors.

As one would expect, some of these start-ups may lack the capital and infrastructure that a larger agency has in place and they often operate under informal processes and procedures. Considering almost all of the inspection agencies use the same pool of inspectors, the real differences from one agency to the other are in the controls, expectations and accountability each agency implements and enforces within their business model.

Technology Supports Value-added Services

While technological advances have certainly improved and sped up the inspection process, the next step is to create more timely and consistent methods to communicate credible inspection findings and other information to the administrator.

We are on the threshold of having the ability to communicate with inspectors while they are still on-site at the repair facility and review the photographic evidence in real time rather than waiting for the pictures to be uploaded to the inspection agency’s website the next day.

The technology is available and only waiting for the infrastructure to be implemented and embraced. In addition to a number of procedural benefits and the reduction of substitute transportation expenses, advances in this area could eliminate the need for certain re-inspections that will result in the savings of thousands of dollars.

Additionally, first-class technology and advanced processes are the initiatives that really allow inspection agencies to rise above the others and enable them to provide more accurate information in a timely manner. This is where agencies can seize opportunities to develop and provide value-added services that reduce the disruption factor, downtime and additional claim expenses that are part of the current inspection process.

Difficult economic times have forced many vehicle service contract companies to re-examine how they do business and it has led to staff reductions and a greater reliance on third-party inspectors. Carr Appraisals Inc. is one company that provides independent confirmation of repair facility diagnoses and an opinion as to the cause of mechanical breakdown failure.

Vice President of Operations, Ted Ginnity, says Carr Appraisals tailors inspection programs to its customers’ needs, which provides a more streamlined, less expensive inspection program. For example, in many cases, there is no longer a need for a vehicle service contract company to keep an inspection coordinator on staff. Additionally, the use of electronic reporting and imaging reduces the storage and filing difficulties of paper forms.

Economic concerns have also led to new services such as targeted audits. These can be less expensive than full audits and often produce greater results. Specific dealers and repair facilities are audited based on customer complaints or claims that don’t fit the norm.

“Customers may receive satisfaction survey cards for work they never had done and this raises a red flag,” Ginnity explains. “Significant financial reward can be gained from targeted audits if you know what you’re looking for. The use of this type of audit can also reinforce the VSC/Dealer contract.”

Challenges of Direct Marketing

The emergence of the Internet and other avenues of direct selling to customers have changed how service contracts are sold. There is no longer complete dependence on the F&I department and this has prompted administrators to look for new ways to keep risks low.

In response, Carr Appraisals has developed pre-purchase inspection programs to cut down on short-term claims. By inspecting a vehicle before it has a contract issued, the administrator can expect some assurance that a vehicle is in decent shape and is not sitting on a lot somewhere with a failed engine or transmission. The programs are not going to catch every defect, but 30/60/90 day claims are reduced substantially.

The emergence of direct call centers in the marketing of service contracts has also prompted numerous new regulations and challenges for the industry. “Consumer regulations are a mixed bag because they are based on good intentions but the variability by city and state makes them difficult to manage,” Ginnity says.

The inspection process has become more challenging because administrators in some cases are not permitted to provide full information about the vehicle to be inspected due to privacy concerns. This can create a guessing game when an inspector goes to inspect a vehicle.

On the other hand, an increased focus on customer service and satisfaction is a by-product of ever increasing scrutiny. “We know our clients are trying to be as fair as possible and find in favor of the customer whenever possible,” Ginnity says. “The old myths are not true. It is possible to be for the customer and still make a profit.”

Accounting for Technology

No industry in the world has had more technological advances in the last 10 years than the auto industry. Vehicles have been profoundly changed by computer controls, high-tech materials, better emissions and increased fuel economy.

These developments require vehicle service contract companies to understand the technology because it tends to be more complicated and expensive to repair.

“It is the responsibility of third-party inspectors to learn about the technology and help service contract companies understand the nature of the failures so they may determine liability and a reasonable repair,” Ginnity explains. “This requires a huge amount of research and learning.”

Technological advancements are being driven by emissions standards, customer requirements and government regulations. Independent inspectors have also changed their processes to keep up with the industry. The use of high-tech testing devices, electronic reporting and scheduling, and real-time information is necessary to satisfy VSC clients in an ever-changing industry. More changes are guaranteed in the future, so it is the responsibility of independent inspectors to continue to be innovative and flexible.

“Even with all the changes and obstacles we face, we strive to be more client-friendly every day. Some things will never change and we keep looking for ways to give the most beneficial and cost-effective service to our clients,” Ginnity says. “What has worked for us for the last 20 years should help to carry us on for the next 20.”