IMI Magazine

Accident Repair

Former panel beater Andrew Moody is challenging the practice of vehicle insurers and fleet management companies 'steering' customers into their approved repair networks.

Moody, now a lawyer, has posted an anti-steering petition* on the Number 10 Downing Street website as part of a campaign to highlight tactics routinely used by some work providers to pressure motorists into using one of their preferred repairers.

He believes that legislation is needed to ensure "a free trade area" for accident repairs. So far, more than 600 work providers and motorists have signed the petition, which is due to remain on the website until the beginning of next year.

"With the vehicle body repair industry widely adopting a recognised standard, there is no valid reason why consumers should not be able to use a repair business of choice, providing it has achieved and maintains a recognised quality standard," said Moody.

One supporter of his campaign is Richard Brinklow, owner of Hillarys Coachworks in Tunbridge Wells, who commented: "Insurance companies are in the business of restricting customer choice as much as possible in order to reduce their costs and I don't think they are entitled to do that. They do not inform the customer of their rights, that is the right of choice.

Fair choice
"Consumer law depends on customers having a fair choice to select the grade of business that suits their purpose, or a business that they have used before."

Insurers claim that the approved repairer system works to the consumers' advantage in a number of ways. For example, if a policyholder chooses a bodyshop outside the network, there may be a delay in getting the work authorised. Policyholders may also experience problems in the provision and insurance cover for courtesy cars, repairs cannot be guaranteed, and if the cost of work at a non-approved bodyshop exceeds the estimated cost of the insurer's approved repairer, the customer is liable to pay the difference.

However, according to independent assessor John Bell, the issue of "settling the difference" is harming the body repair industry's reputation. "If insurers don't get the figures they want, they will send a cheque straight to the client and say 'here is the sum to cover the cost of repairing your vehicle', and that's totally wrong. It's tempting for the policyholder to think 'great, I've got a cheque for £1,500,' although to do a proper repair would cost £2,100. He then goes to a back street garage and gets the car patched up as cheaply as possible. This encourages bodged jobs and unsafe repairs," explained Bell.

Again, insurers argue that it costs them more to manage a claim outside the approved network and that because of Duty of Care responsibilities, settlement is the only option if a customer is determined to have their car repaired elsewhere.

"Not all customers have an idea of who they wish to carry out repairs," said Adam Murray, motor technical manager of Aviva UK. "We offer freedom of choice to customers and support their selection of repairer when known to us, but recognise many customers need some assistance in making the correct choice. In our experience, around 30% of customers have a repairer or settlement option in mind when they contact their insurer to report the incident.

Peace of mind
"I have seen many examples each year of vehicles that end up in the wrong repairer for a variety of reasons," continued Murray. "Where possible, Aviva offers support to deliver the right outcome to ensure peace of mind to our customers and in situations where either equipment levels or issues such as warranty will be invalidated, our staff provide a full explanation of our concerns to ensure customers vehicles are repaired correctly."

Jon Parker, managing director of bodyshop IT and engineering specialist Byteback, believes that individual bodyshops need to decide the type of work they want to focus on. "If they predominantly try to attract retail type work, then their focus needs to be 'customer centric'," said Parker. "If their decision is to look for contract business, or provision in larger numbers from work providers, then they will need to concentrate on providing the supplier, before the customer, with added value.

"Trying to invoke legislation that will prevent insurers directing work into their approved networks is, in my opinion, futile, as the insurer is responsible for the repair, and has a duty of care and corporate social responsibility to ensure methods of repair are correct. In addition, it is highly likely that insurers can obtain a cheaper repair from their own accredited networks. That's just business. A policyholder who is directed to either a Kitemark or vehicle manufacturer approved repairer by their insurer should receive the best possible repair," Parker maintained.

Pressure selling
All this seems to cut no ice with Andrew Moody, who extends his unfair practice argument by claiming that pressure selling practices are brought to bear on bodyshops as well as motorists. He cites one work provider that requires repairers in its network to "introduce" a minimum of 10% of so-called "innocent party" customers - people who have been involved in a crash through no fault of their own.

"In practice, this means that for every 10 repair jobs provided, the insurer expects one non-fault customer in return," said Moody. "What's more, if sufficient customers are not referred, then the repairer is penalised. Some repairers have been docked £150 for every customer below an expected number."

What opposing sides do appear to agree on is the need for policyholders to be made more aware of restrictions on insurance cover. As with most insurance, consumers tend to be influence more by price than range of service and it's not until a claim that they discover the limitations of cover.

Of greater concern to bodyshops is that despite an increase in car insurance premiums - around 12% in the last 12 months - there has been no proportionate rise in hourly labour rates.

Heather Grant

To view Andrew Moody's petition, log onto: http://petitions.number10.gov.uk/Anti-Steering/. A paper version can be downloaded from www.retailmotorlaw.co.uk.