Nrma Gives Free Rein To Customers On Car Repairs
Sydney Morning Herald
Saturday March 11, 2006
NRMA Insurance has succumbed to growing criticism of its controversial internet-based smash repair system by announcing a plan to allow customers to choose their own repairer.
Customers will still be required to bring their cars to a centre for assessment but will not be forced to use the insurer's preferred repairer.The head of NRMA Insurance, David Issa, said premiums would not rise and the company would bear any additional cost. "Customers are saying to us that they want to have choice," he said. "We will continue to recommend our preferred repairer network as it's made up of quality repairers who continue to meet our high expectations."But Mr Issa said NRMA was still committed to its care and repair system, which requires repairers to bid for work by examining online photographs of damage to cars. The Minister for Fair Trading, Diane Beamer, welcomed the announcement but said the State Government was still concerned that NRMA's system may be unfair to customers and repairers. The system, introduced in July last year, has angered the repair industry, led by the Motor Traders' Association, which says it forces repairers to undercut other bidders. The industry's claims were backed by a report, released in December by Parliament's Staysafe committee, which found the system resulted in unsafe repairs and should be suspended. The head of the Motor Traders' Association, James McCall, welcomed NRMA's announcement but urged the Government to introduce legislation to abolish the use of preferred repairers. "There should be regulation to make sure insurers - not just NRMA - behave fairly and equitably," he said. "Anti-steering legislation would improve the quality of repairs so they are based on a standard of safety and quality, not price." This week, an independent NSW MP, Richard Torbay, added to the pressure on the Government to deal with the industry's concerns by announcing he would introduce a private member's bill that would impose jail sentences and penalties of up to $165,000 on insurers that use preferred repairers or parts. Mr Torbay said yesterday he still intended to introduce the bill this month."We wedged the Government right up the guts," he said. "It will be very difficult for the Government to walk away given this is an obvious acknowledgment that NRMA's practice is unfair." The Premier, Morris Iemma, would not say if he would support the bill but said the Cabinet Office was examining ways to support repairers.Ms Beamer said she had ordered an independent review of NRMA's system and would prefer a negotiated settlement between the insurer and repairers. NRMA has about a million customers in NSW and a market share of about 50 per cent. From May 1, customers will be able to use their own repairer as long as the quote is "fair and reasonable".Mr Issa said the company expected that only about 3 per cent of customers would want to use their own repairer."Customers call us and tell us they want to be able to have free choice, but when they need repairs done most want us to look after their car," he said.
© 2006 Sydney Morning Herald