Is the Insurance Photo Apps an Investment Ploy?

When you get in an accident, your insurance company might send you an app that guides you through taking a series of photos.

Ask yourself… is this accurate?

Why would insurance companies go this route? As we know the photo estimates are not going to be 100 percent accurate, and the intention might be a little different. You might think that the insurance company might low-ball your estimate upwards to 70% to save money paying out the claim… you might be correct…but it goes much further.

State legislation typically requires an insurance carrier to hold back 10 times the first estimate amount until the repairs are complete. This gives motivation to write the original estimate conservatively.

A $10,000 original estimate is going to require an insurance company to pull $100,000 out of their investments into escrow. Now you multiply this by how many claims an insurance company has in a month. (State Farm handles 15,000 claims a day)

$100,000 belt in escrow means an insurance carrier is sitting on $5 billion dollars. Hypothetically if that much was invested in the S&P 500 it would have made the insurance carrier $100 million today.


ANSWER: You aren’t required to use these insurance estimating apps. As they are next to never accurate, you are also putting the company that is required to set aside up to ten times the amount of your claim.