Partner not pariah – it’s time for insurance companies to compensate the Australian collision repair industry adequately and fairly

Partner not pariah – it’s time for insurance companies to compensate the Australian collision repair industry adequately, fairly and reasonably

Australia’s collision repair industry must be treated as a partner rather than a pariah by insurance companies, ignoring growing skills shortages, high labor and crippling supplier costs.

The Motor Trades Association of Australia (MTAA), backed by the Motor Traders’ Association of NSW (MTA NSW), says rising costs due to supply chain delays and increases caused by the pandemic are compounding the already unsustainable business practices of cost containment by insurance companies.

MTAA CEO Richard Dudley says otherwise successful, sustainable collision repair businesses are on the brink of collapse because insurance companies are failing to compensate collision repairers fairly. and reasonable.

“For decades, insurance companies have deployed deliberate cost containment strategies by refusing to adequately pay certain legitimate costs incurred and refusing to consider meaningful adjustments for rising labor costs. labor, parts and materials and commercial operation,” said Mr. Dudley.

“Bodyshops have exhausted productivity improvements and cost absorption strategies across all areas of their business spend and enough is enough. Repairers reported that an insurance company has not adjusted the price it pays repairers for automotive paint and coatings for 14 years. Now, and despite three price increases by a paint company in the past 14 months, they still refuse to even sit down and discuss the matter,” he added.

MTA NSW CEO Mr Stavros Yallouridis said the MTAA, on behalf of MTA NSW and the State and Territory Associations and the Australian Motor Body Repairers Association, has written to the Australian Insurance Council asking an urgent summit to discuss resolving the issue before other businesses shut down well. .

“Small collision repair businesses are already facing historic skills shortages and rising costs for labour, parts and materials, and are adapting to changing technology and materials. in new cars,” he said.

“Containers bringing parts, panels, components, wheels, accessories to our shores have increased 453% since before Covid.” He added that these costs are passed directly on to small businesses with no opportunity to have these cost increases reflected in compensation.

“Furthermore, the behavior of the insurance industry for many years in not properly addressing rising material costs in the supply chain is completely inconsistent with its obligations under the ‘Code of conduct of the motor vehicle insurance and repair industry”. These obligations require the insurance industry to promote cooperative relationships between repairers and insurance companies based on mutual respect and open communication If the insurance industry continues to flout its obligations under the Code, then the only action left is legislative government intervention to force the insurance industry to behave in a manner consistent with its obligations,” Mr. Yallouridis said.

/Public release. This material from the original organization/authors may be ad hoc in nature, edited for clarity, style and length. The views and opinions expressed are those of the authors.