Saturday, September 23, 2017
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Debate over processing of vehicle claims

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The average time taken to repair a vehicle in New Zealand could be reduced by a third if insurers reduce unnecessary red tape according to a new industry survey.

New research released by the Collision Repair Association, an industry body covering hundreds of panelbeaters from around NZ, shows the average time taken to repair a vehicle is around six days – of which more than two days is lost in administration between the insurer and vehicle repairer.

But the Insurance Council has disputed this claim, saying a panelbeater skill shortage is causing delays in repairing insurance customers’ cars, not insurer red tape.

CRA general manager Neil Pritchard says the level of red tape required for each repair is unnecessarily high and means the customer is without their vehicle for longer than they should be.

“Under the current model, the typical repair process requires the insurer to accept a claim for repairs, assess the vehicle, then authorise the panel beater to quote on the repairs. Once the estimate is accepted the panelbeater can begin repairs.

“The issue is there is no industry standard covering the documentation required for an insurance claim and some insurers are regularly making requests for additional information after the estimate has been submitted by the repairer.

“The time taken up with completing this extra paperwork can be as long as the repair itself; for the customer this means their car is off the road for up to twice as long as it needs to be,” he says.

But Insurance Council chief executive Tim Grafton says the CRA’s claims are “an empty beat-up to disguise the failure to address the industry’s skill shortages.

“Neil Pritchard has a short memory because earlier this year his organisation approached the Insurance Council to partner in joint communications regarding their skills shortage causing delays in car repairs. He is creating tension between the smash repair industry and insurers that is unnecessary.”

Tim says the CRA needs to wake up to the real issues with delays in repairs. “They need more skilled staff who know how to work with high tech cars and they need more staff in repair shops in the major cities where we have seen an increase in both cars on the road and crashes.

“There will always be cost negotiations between panelbeaters wanting more profit and insurers wanting to keep costs down so that insurance remains affordable for everyone. All insurers are asking for is the evidence of the damage to support the recovery of the costs which is no more than any other business requires when paying for services,” he says.

Neil says the current industry model for vehicle insurance which is used in NZ is not helping to speed up repairs.

“In the US, insurers are required to provide a suitable replacement vehicle while their customer’s vehicle is off the road – the daily cost of running the vehicle provides an incentive for the insurer to expedite the process.

“In NZ it is usually the panelbeater who provides a courtesy car,” he says.

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