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How to Keep a Warranty Claim from Growing Childish

It can be an ugly situation. Days or weeks after leaving your shop, a customer develops car problems. The vehicle you serviced suffers damage of some kind. The repair shop tells the customer you’re responsible. And the customer arrives at your door, bearing a nasty letter from his attorney threatening legal action. It’s enough to ruin any lube operators day, but there are things you can do to take back control of the situation and potentially save yourself a nasty claims fight.

For many lube operators, the first call to make is to an independent third-party inspector who can arrange to take a look at the vehicle in question and verify items like what failed (i.e. oil filter, drain plug, etc.), what likely caused the failure and the extent of the damage. Any inspector worth his salt will want to document all observed facts and make a photographic record of his findings.

“The inspection/validation process is identifying the factual evidence and documenting the ‘cause’ and ‘effect’ of what happened,” said Tom Powers, director of Business Development for Magoo’s, a leading inspection and assessment company with more than 4,000 inspectors in the United States and Canada.

According to Powers, most fast lube claims scenarios involve a he-said, she-said argument, with customers insisting the damage was caused by a lube center’s service and lube operators/managers insisting the damage had nothing to do with the service. Ultimately, lube operators are often left holding the bag.

“You were the last one to touch (the car), so you’re it,” Powers said. “It’s a very adversarial confrontation from the get-go.”

Where inspections play a role in resolving these claims situations is breaking the failure down to what Powers called “known knowns” and documenting them.

Powers said a vehicle inspector will look for certain things, among them the sequence of steps that lead to the problem. “An inspector will look for evidence of improper installation, anything that might have been wrong with the vehicle prior to service, isolated problems that are not global — a pre-existing condition like an old engine with a bad bearing, for instance, heat discoloration in components, etc.,” he said.

In the event you’re presented with a damage claim, Powers said getting an inspector involved quickly sends a positive message. “Having an inspector says that you’re acting quickly, that you have the resources to use an independent third party and that something is happening with the claim,” he said, adding that an immediate inspection is your best defense.

Powers said the complaints his company most often sees involve oil filters that were improperly installed, drain plugs that were left out, oil that wasn’t added to the engine, transmission lines that were improperly installed after a transmission fluid flush, fluids that were mixed together improperly, the wrong viscosity of oil being used, or the wrong type of fluid being installed.

According to Powers, while third-party inspectors can be helpful in damage claims there is a limit to what they can and cannot do. “Inspectors are not insurance adjustors or repair estimators, and they are not legal advisors. They do not dispense legal advise,” he said. “They are trained, experienced mechanics — an independent third party with an objective opinion who can arm you with the best mechanical information possible about the claim you are facing (and what might have caused it).”

However, inspectors can testify in court cases, if need be.

Powers said a typical standard inspection runs an average of $150, though in cases where a vehicle caught fire or suffered major damage the inspection can run $300 or more.

As part of a company that has helped conduct nearly one million automotive damage inspections, Powers had some advice for lube operators.

“Before you touch the car, look for the ‘ins’ — if it’s ‘leakin,’ ‘smokin,’ ‘knockin,’ ‘bumpin,’ etc., advise the customer to have the vehicle looked at for the problem before you service it,” he said.

To further protect yourself, Powers recommended documenting on the service order, prior to doing so, what services you are going to do so customers are aware of them. He also recommended installing a video surveillance system to verify that procedures were followed in the event of a claim.

“Use the ‘buddy system’ or a ‘checks and balances’ system to verify that work was performed and to double check that everything about the vehicle and its components is accurate, the model, type and size,” he said. “Use tamper-proof seals and be careful when someone asks you to top off their fluids.”

Powers also recommended carefully cleaning the surface area where a filter is removed and installed to ensure the old filter gasket is removed, a common problem that almost always leads to double-gasketing and filter failure.

There are some services Powers said lube shops should be especially leery of, specifically citing transmission fluid flushes on cars with more than 100,000 miles, particularly when the service history isn’t known. Too often, consumers believe fluid maintenance services are cure-alls for their vehicles when they’re not.

“Oil changes (and other fluid maintenance services) are preventive maintenance, not liquid repair,” he said. “Call a third party at the first sign of an engine- or drivetrain-related claim.”

Claims are an unwelcome but near-certain part of doing business in the lube industry, though they can deliver lessons. “If you gain nothing else from a claims experience, learn to be careful what you work on,” Powers said. “Don’t get stuck holding the bag.”

In the end, using a third-party inspector to isolate and verify damage to a vehicle can keep operators, repair facilities and customers from getting involved in a child’s game. Fighting a claim by yourself, Powers said, is like joining a game of tag.

“And the last one to touch the car is it!”