Your shop strives to communicate and educate the customer. You fix cars every day, but the average driver in the United States will experience only three or four accidents in their lifetime. But some aspects of a repair don’t present themselves right away.
Picture this shocking scenario for your customer. Your shop has done its job; you’ve followed all the proper procedures, restored the vehicle perfectly to pre-accident condition, and sent your satisfied customer on their way. But years down the road, when your customer goes to sell that vehicle, they’re told that because it was in an accident, it’s worth less than it should be. Your shop did nothing wrong. But maybe a bit of education could’ve saved that customer money and enhanced your shop’s reputation.
What this hypothetical customer has run afoul of is called diminished value, and it can cut thousands of dollars off a vehicle’s sale price just for popping up on a Carfax report. Recouping the diminished value is ultimately between the customer and their insurance company. But helping the customer at the time of loss, as opposed to at the time of resale, is advantageous.
“There’s so much they can lose out on if their vehicle gets damaged and they go to trade again,” says Mitch Buhr, who as owner of Nexus Claims Services LLC helps people with diminished value claims every day. “Without that additional money from the diminished value, they might not even to have the money to be able to pay off their vehicle or cover the whole trade-in without that additional money being on top of it.”
Buhr takes a hands-on role in assisting clients, personally handling negotiations with the insurance company and utilizing his experience working in a body shop to help get people the help they need. But Buhr’s approach is not the only solution to this problem. Jeff Zigman’s TRUEclaims platform seeks to remove some of the manual work, generating electronic reports in just minutes that can be effective tools in the negotiation process.
“TRUEclaims makes it so that a diminished value report and/or a fair market value report can be produced in two to five minutes, equivalent to — I’ve heard from numerous appraisers —two to four hours of manual work,” says Zigman, a tech entrepreneur who has designed or led the development of more than 300 software systems.
FenderBender spoke to both Buhr and Zigman about how they come at this problem from different angles—and where body shops fit in.
“What’s in it for me?”
Buhr began working in a body shop in 1994, and even back then it was clear to him that insurance companies were not giving claimants complete information. He started Nexus Claims Services a bit more than four years ago, and today he helps clients with not only diminished value claims but also total losses and associated claims. And he still is fighting an education gap.
“All insurance companies I’ve ever talked to do not tell any of the claimants that they’re entitled to diminished value,” Buhr says. “Which I personally think that’s wrong myself. Unfortunately, the average Joe in the public doesn’t know things like that.”
Buhr says he gets most of his clients referred to him through body shops, and for obvious reasons. Most people don’t know this is something that exists until it happens to them. That’s where the body shop can be such a valuable resource.
“Some of the shops reply with, ‘OK, but what’s in it for me?’” Buhr says. “And that’s pretty easy. I mean, you try to help your customer out to where they can actually recuperate more money that’s deserved to them.”
Nexus Claims has produced its own documentation and metrics to produce reports that outline the basis for a claim. Consider things like lost certifications — as for some manufacturers, an accident means that vehicle can no longer hold certified pre-owned status, which of course affects the resale value. That’s worth a certain percentage, and spreadsheet tallies all that up, and that becomes the starting point for the negotiation with the insurance company. How that goes varies a lot, but it’s rarely easy.
“Each insurance company has a different way of looking at it,” Buhr says. “Some of them, it’s a fight, other ones — I did one today that was fairly easy, I spoke with a gentleman from the insurance company, was very knowledgeable, and he was able to see my point of view on it, and we were able to come to a really good agreement. But that’s a rarity.”
Buhr would like to see more body shops be proactive in communicating with customers. His consultations are always free, he says, meaning it costs customers nothing to become more informed. But they need to know what services there are to assist them.
“My discussion with (body shops) is, every claimant that they have, they need to send to me to talk to about diminished value,” says Buhr. “Whether they’re able to get it or not, it’s still something that we can educate them on.”
“More word of mouth”
As a CTO and tech entrepreneur for the past 11 years, Jeff Zigman has led his share of multimillion dollar enterprise software projects. But what tops all of those in complexity, he says, was developing the TRUEclaims platform. Zigman met with an appraiser in the summer of 2023 who told Zigman that he had spent 15 years and hired 19 different software companies to try and develop an automated process for diminished value and fair market value reports. Most said it couldn’t be done, and one said it would cost $1 million just to find out.
“I built a first version of a fair market value report by around one and a half months after that,” Zigman says. “…Then I repurposed it for a diminished value report made for attorneys. Then I built a different module made for appraisers. I also created a way that body shops could help their clients with an intake process that feeds it in so the attorneys can take on the diminished value claim.”
It is likely for reasons of complexity that expert adjusters like Buhr are still in demand, and TRUEclaims has no competitors, that Zigman is aware of. His platform is in use so far by more than 20 body shops, but by many more adjusters and attorneys. Individual claimants can also start their claim on the TRUEclaims website, taking just minutes to submit their information, which then gets sent to an appraiser, who generates a report that the claimant can take to their insurance company.
“It creates eight- to 20-page reports, with an extensive comparable vehicles analysis, using more than 30 data points and doing over 60 calculations, showing all of the numbers in the report clearly,” Zigman says.
Zigman reports that while there is more of a track record of success with total loss claims submitted through TRUEclaims, the early indicators show a large number of successes, with one claim settling on the amount the appraiser asked for, more than $32,000. That’s a great sign that the platform is accurate in replicating a process that takes hours manually. However it gets done, both Buhr and Zigman agree that when the customer is more educated, the body shop wins.
“I imagine they might get more good reviews and happy customers, leading to more word of mouth,” Zigman says.
“They’re going to remember that the next accident they have,” Buhr says. “Or, the next person they know who has an accident, they’re going to send them to your shop.”
