When choice of repairer really isn't choice of repairer
Have you had a car accident recently and had to get your car repaired by a smash repairer? Then chances are you can probably relate to most of the content in this article. For many years now "choice of repairer" has been a staple in the majority of car insurance policies sold in Australia. Consumers have become accustomed to expecting this feature as standard with their insurance. In short, as the name suggests if your car is damaged you're given a choice of taking your vehicle to a repairer recommended by your insurer, or should that repairer not be convenient, and you wish to have your vehicle repaired by another panel beater of your choosing you can elect to have your car fixed there. A by-product of cost cutting exercises from most motor insurers is an increased focus on motor vehicle claims costs. Which inevitably is largely focused on reducing the invoices of panel beaters. Insurers are pushing harder and harder to funnel motor insurance repair work to their recommended repairers where they receive preferential rates compared to random repairers not on their agreements. For smash repairers not "recommended" this means a reduction in work and an inability to compete on profit margins. Associated with this is often an ultimatum from the large insurers to complete the work at the rate a recommended repairer who received bulk volume of work would charge. Or not get the authority for the job. This is unrealistic and is leaving customers worse off as they wait in the middle for this stalemate to resolve itself. You would think that "recommended" repairers would be living the high life. But, these repairers are often forced to complete work below cost in order reach certain metrics imposed on them to retain their "recommended" status. What we're seeing is a supermarket style price squeeze on smash repairers that is unsustainable and forcing many to exit the industry or complete work at a below par standard. This is frustrating to many in the insurance industry who have seen the impact that cost cutting has had on a service perspective in other underwriting and claims areas. Which ultimately will lead to more horror stories like those exposed by the royal commission and reflect poorly on the industry while it is constantly fighting to regain trust. Now I know what you're thinking. It's easy to articulate the problem and much harder to solve it. Shareholders are demanding a return from a product that historically has run quite poorly. My solution would be for motor insurers to be more open about the issue and either provide a reduction in premium and/or excess for using their preferred repairer. Conversely an increased premium and/or excess could follow someone wishing to use their own repairer. I however like the carrot more than the stick. This would give the power back to the consumer to choose their preference. It would also force consumers to compare their car insurance provider both on price and repair process. Such change would put the consumer in the driving seat (pardon the pun couldn't help it) making them more educated on what they're paying for and help restore some faith in the industry. What are your thoughts?