The country’s largest insurer is opening its own panel beating shop under a new trial.
However, Collison Repair Association (CRA) is warning the quality of vehicle repairs may drop under this new model proposed by insurance firm IAC (in New Zealand includes Lumley, NZI, State and AMI).
Customers will be required to have their vehicle repaired at an IAG owned repairer, and CRA general manager Neil Pritchard says the move is anti-competitive and signals a lack of consumer choice and competition in the industry.
“Our concern is that under a model where the insurer dictates the standard and scope of the repair, there will be no oversight in place to protect the consumer.
“Even seemingly minor or cosmetic repairs to modern vehicles may have underlying damage to sensitive radar and sensors – requiring specialist expertise and equipment to diagnose and effect suitable repairs.
“It is important that motorists have a resolution structure in place which provides a degree of independence in the event of any issues,” Pritchard says.
Customers may find their new vehicle warranties voided if repairs are not made at an approved repairer, particularly if non-genuine parts are used.
Pritchard says motorists would not want to face-off their insurer in a disputes tribunal hearing.
“It is also unclear what happens if a customer has a poor service interaction with an IAG repair shop and whether they will be forced to use it again in the future if they remain with that insurer,” he says.
Communicating this move to customers may be a concern, Pritchard says.
“Existing customers of IAG may see the fine print of their terms and conditions simply adjusted when it comes to their annual renewal; new customers may be required to ‘opt-out’ when applying for insurance for the first time or face higher premiums.”
The IAG’s claims that the new venture is necessary due to processing delays in the current repair network is just a ruse for a profit-driven strategy.
“This model is rare overseas, and the move to become more vertically integrated here is purely profit-driven and at the expense of consumer choice.
“We would like to see the insurer working more closely with existing repairers to help reduce repair times and communication with customers.”
