At the core of many problems experienced in the Collision Repair Industry is the fact that insurers have disowned consumers of their freedom to select a Motor Body Repairer (MBR) of their choice.
Instead they have sold the consumer’s rights to entrench their position of dominance in the industry. The outcome gives them the power to decide if a repairer will receive work or not.
In a recent communication we note an Insurer claiming they have the right, as per their contract with the client, “to decide how we will indemnify the client, and decide which supplier we use to do the repairs. This is a practice that most insurers in South Africa are following. Our responsibility to our client is thus to put them in the same position as what they were before their incident.”
The problem is however, that insurance companies do not have the ability to put the consumer “in the same position they were before the incident”, neither do insurers have the ability to control this. The task rests squarely on the shoulders of the MBR establishments. This is achieved through consistent compliance with strict standards by qualified journeymen in properly equipped and accredited repair facilities.
Total reliance is therefore placed on the MBR’s, but the desired outcome is distorted by draconian direction of spend policies and methodologies, often to the detriment of a major portion of repairer establishments.
We should also own up to the fact that accident repairs are not comparable to say routine maintenance on vehicles. The vehicle safety and quality of the repair are far more reliant on the expert skills, care and even the ethics of the MBR.
It is clear from a simple check, such as the customer satisfaction rating on Google Maps, that not all MBR’s give the same quality of repair and service to consumers. The question therefore begs to be asked why insurers often insist on using repairers that rank amongst the lowest in the industry and are content to subject customers and their costly vehicles to this?
This tendency is confirmed by the number of vehicles that have to be re-worked by a second repairer to achieve the desired quality. This questions the integrity and consistent application of systems used by insurers to direct work allocation in the industry.
In line with this disregard for policyholder satisfaction, we note through discussion with personnel from various Insurers, who interact with our CRA members face to face on a daily basis, that they are challenged with the dissatisfaction on repair outcome that has increased exponentially. However senior management fail to rectify this unnecessary admin and related burdens by minimising negative satisfaction experiences and allow for the best quality.
Why would an industry on a broad base show so little respect for their customers in terms of the basic right of choice, while splashing millions of Rands on advertising to demonstrate their customer satisfaction focus at the lowest premiums, but without respect for the policyholder rights? Have the public become so complacent with this image of legitimacy portrayed by insurance companies that we no longer read the small print until it is too late? It harks back to the romance of smoking portrayed by the cigarette advertisements of the past.
The root cause of the outright usurping of a consumer’s rights lies in the devil of the fine print detail. On almost all insurance contracts there is a clause that states they can do almost as they please once the vehicle is in an accident, acting on the owner’s behalf. In a way they take ownership of the damaged unit.
This clause should be prohibited completely in insurance contracts for it compromises the three major consumer rights – service quality, affordable pricing and the right of repair choice. It is quite clear that these contentious and onerous clauses need to be focused on by the repair trade right now.
It is time for a big change in insurance with their blatant work steering against their process partnerships that operate on the basis of “free enterprise” where a meritocracy is supposed to be the golden rule of business.
Insurers argue that they need to be able to direct their spend to meet BBBEE targets, but with over 63% of CRA members already more than 51% black owned, this should no longer limit consumer choice.
The selective application of BBBEE by insurers has blurred the lines between transformation and enrichment to the extent that we believe their true objective is completely based on false pretence.
Several insurers also appear to be stuck in volume-based agreements where the economic downturn due to Covid-19 has made it a huge challenge to meet committed volumes, to the extent that they are now forced into direction of accident damaged vehicles outside of the policyholder local community.
The honourable Minister Patel from the DTI urged support for local business in his addressed gazette of 12 May 2020 for applying rules with the move to level 3 at that stage. Alas, this plea has fallen on deaf ears and the economic activity has almost ground to a halt at some repairers, forcing businesses to close or retrench and affecting thousands of people in the process.
We ask the question if it is even legal in terms of the Consumer Protection Act to commit other people’s assets (customer’s vehicles) to such a process, as in its very nature it deprives the consumers of their right to choose and should therefore be prohibited.
Customer choice and satisfaction needs to be re-established as the centre of our focus as it should ultimately allow those that can do the job best, to get the job done!
By Steve Kessel, CRA operations director