The Ultimate Guide to Insurance Car Repairs in Australia

Insurance car repairs can be a minefield for many Australian car owners. From the paperwork and assessment process to understanding your rights and options, there’s a lot to navigate. This guide will give you practical solutions, expert advice and clear information to help you through it.

At CPK McLaren, we believe passionately in educating customers about their rights when it comes to smash repairs and as the provider of one of the most reputable smash repairs in Gippsland, we want our local customers to have knowledge on their side.

How Insurance Repairs Work in Australia

Over 80% of Australians have comprehensive car insurance, so it’s essential to know how it works. But with rising repair costs, disputes over repair quality and insurer cost-cutting tactics, it’s a challenging time to be a car owner. Repair costs have increased by 33% due to inflation, labour costs, supply chain disruptions and technology in vehicles.

Statistics

  • 80% of Australians have comprehensive car insurance.

Common Issues

  • Rising repair costs
  • Disputes over repair quality
  • Insurer cost-cutting tactics

Impact of Rising Costs

  • Repair costs have increased by 33%

Contributing factors:

  • Inflation
  • Labour costs
  • Supply chain disruptions
  • Technology in vehicles

Your Rights as a Car Owner

Australian consumer law allows you to choose your repairer, even if your insurer recommends a specific shop. This is backed up by the Insurance Contracts Act 1984 which states that insurance agreements must be fair. But insurers have preferred repairer networks that prioritise cost savings over quality and they may not tell you about them. These networks may use non-OEM parts or follow insurer-mandated cost-cutting measures that compromise repair quality.

Court cases have established that car owners can challenge insurers over repair quality and claim disputes. The Australian Financial Complaints Authority (AFCA) is where you can escalate complaints when insurers don’t follow fair practices. AFCA data shows that disputes over repair quality and claim delays are a big chunk of complaints, so it’s essential you understand and assert your rights as a policyholder.

Step-by-Step Insurance Repair Process

1. Report the accident and lodge a claim

Call your insurer as soon as possible to report the accident and start the claim process.

2. Insurance assessment and delays

An assessor will inspect your vehicle. Delays can occur for various reasons, such as assessor availability, complex assessments or high claim volumes.

3. Insurer-preferred vs. independent repairer

You have the right to choose your repairer but insurers will often steer you towards their network. Consider quality, cost and convenience when making your decision.

4. Repair authorisation and parts quality

Once you’ve chosen a repairer they will work with your insurer to get repair authorisation. Discuss Original Equipment Manufacturer (OEM) parts vs aftermarket parts as this can affect quality and cost.

5. Dispute resolution

If your insurer undervalues your repairs or disputes your claim you can go through their internal dispute resolution process or escalate to AFCA.

Cost Differences: Insurer vs Independent Repairers

Insurers negotiate lower rates with their preferred repairers which can result in lower quality repairs. The “Funny Time, Funny Money” issue is a problem in the Australian smash repair industry where repairers inflate the number of hours quoted for a job to compensate for the low hourly rates offered by insurers.

How it works:

  • Low Hourly Rates: Insurers negotiate low hourly labour rates with repairers, especially those in their network.
  • Inflated Time Quotes: To make up for these low rates, repairers quote a higher number of hours than needed for the repair.
  • Hidden Costs: This practice hides the true cost of repairs, making it hard for consumers to compare quotes and understand the value of the work.

Why it happens:

  • Insurer Pressure: Insurers put pressure on repairers to reduce costs, resulting in a race to the bottom on hourly rates.
  • Lack of Standardisation: There’s no industry-wide standard for calculating labour times or hourly rates, so it’s easier for repairers to inflate quotes.

Concerns:

  • Higher Costs for Consumers: While it may seem like repairers benefit, it can ultimately lead to higher overall costs for consumers and distort the true cost of repairs.
  • Reduced Transparency: It reduces transparency in the quoting process, making it harder for consumers to make informed decisions.
  • Quality Concerns: It can incentivise repairers to rush jobs or cut corners to meet the inflated time quotes, potentially affecting the quality of repairs.

Efforts to Address the Issue:

  • Productivity Commission Recommendation: The Productivity Commission has recommended abolishing “Funny Time, Funny Money”.
  • MTAA Real Times Guide: The Motor Trades Association of Australia (MTAA) is promoting a “real times guide” to increase transparency and standardise labour times.
  • ACCC Authorisation: The Australian Competition and Consumer Commission (ACCC) has proposed authorising the MTAA’s guide to promote competition and efficiency in the quoting process.

You can read more about this here.

Independent repairers like CPK McLaren endeavour to provide a high level of workmanship and use OEM parts when possible to ensure quality repairs. However, the timeframe for repairs can vary depending on part availability, extent of damage and insurer timelines.

Total Loss & Write-Offs

In Australia, your insurer may declare your vehicle a total loss if the cost of repairs exceeds a certain percentage of its market value.  This threshold typically ranges between 65-75%, but it can vary depending on the insurer and your specific policy.  Several factors contribute to this decision, including the vehicle’s age, pre-accident condition, and the estimated salvage value.    

Calculating Payout Amounts

Insurers use various methods to determine the market value of your vehicle, such as industry guides like Redbook or Glass’s Guide, online valuation tools, and independent appraisals.  The final payout amount is typically based on this market value, minus any remaining salvage value and your policy’s excess.    

What to Do if You Disagree

If you believe the insurer’s valuation is too low, you can take the following steps:

Provide evidence: Gather supporting documentation such as independent appraisals, recent sales of similar vehicles, or records of the vehicle’s pre-accident condition.    

Negotiate: Engage in discussions with your insurer to explain your perspective and seek a revised offer.    

Escalate to AFCA: If negotiations fail, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA) for an independent review of your case.    

Emotional Considerations

Losing a vehicle can be emotionally challenging, especially if it holds sentimental value.  Remember, it’s okay to seek support during this time.

Common Delays & How to Speed Up Your Claim

Delays in the car insurance repair process are frustratingly common. Data from the Australian Financial Complaints Authority (AFCA) shows that 25% of complaints involve delays, while 19% involve disputes over repair costs. Understanding the reasons behind these delays and knowing how to navigate them can help you get your vehicle back on the road sooner.  

Common Causes of Delays

  • Assessment delays: Scheduling an assessment with an insurance assessor can sometimes take longer than expected, especially during peak times or after major events like storms or natural disasters.  
  • Parts availability: If your vehicle requires specific parts, delays can occur if those parts are not readily available, especially for older or imported vehicles.  
  • Repairer backlogs: Repair shops can sometimes have a backlog of work, which can delay the start of repairs on your vehicle.  
  • Communication breakdowns: Miscommunication or lack of communication between you, the insurer, and the repairer can lead to delays and misunderstandings.  
  • Disputes over repair costs or methods: Disagreements over the appropriate repair methods or the cost of repairs can also cause delays in the process.  

How to Speed Up Your Claim

  • Report the accident promptly: Contact your insurer as soon as possible after the accident to initiate the claim process.  
  • Provide complete and accurate information: Ensure you provide all necessary documentation, such as police reports, photos of the damage, and witness details, to avoid delays in the assessment process.  
  • Follow up regularly: Maintain regular contact with your insurer and the repairer to stay informed about the progress of your claim and address any potential issues promptly.  
  • Choose a reputable repairer: Select a repairer with a good track record and efficient turnaround times to minimize delays in the repair process.  
  • Consider using an insurer-preferred repairer: While you have the right to choose your repairer, using an insurer-preferred repairer can sometimes streamline the process and reduce delays.  
  • Understand your policy: Familiarize yourself with the terms and conditions of your insurance policy, including any specific timeframes or procedures related to claims and repairs.  

Escalating Delays

If you experience significant delays or encounter difficulties with your claim, consider taking the following steps:

  • Contact your insurer’s internal dispute resolution department: Most insurers have an internal dispute resolution process to address customer complaints and resolve issues.  
  • Lodge a complaint with AFCA: If you are unable to resolve the issue with your insurer, you can lodge a complaint with AFCA for an independent review of your case.  
  • Seek legal advice: In some cases, it may be necessary to seek legal advice from a lawyer specialising in insurance law to protect your rights and interests.  

By understanding the common causes of delays and taking proactive steps to manage your claim, you can help ensure a smoother and faster repair process.

How CPK McLaren Ensures High-Quality Insurance Repairs

Choosing an independent repairer like CPK McLaren Motorbody offers several advantages. You gain more control over the repair process and can be confident of receiving high-quality workmanship. CPK McLaren Motorbody’s commitment to excellence includes:  

  • Negotiating with insurers: CPK McLaren will handle negotiations with your insurer on your behalf, ensuring your vehicle is repaired to the highest standards without compromising on quality or safety.  
  • Using OEM parts: CPK McLaren uses only Original Equipment Manufacturer (OEM) parts, guaranteeing the best fit, performance, and safety for your vehicle.  
  • Utilising high-tech facilities: CPK McLaren’s state-of-the-art facility in Leongatha is equipped with the latest technology and equipment to ensure your vehicle is restored to its pre-accident condition.  
  • Adhering to best practices: Their qualified technicians follow current, correct, best-practice vehicle repair methods and processes in accordance with vehicle manufacturers’ specifications and systems.
  • Focusing on customer service: CPK McLaren prides itself on providing customer service excellence in an efficient, professional, and transparent manner.
  • Protecting your investment: They understand the importance of your vehicle’s value and safety, ensuring the best quality reinstatement of damaged vehicles to their pre-accident condition.
  • Environmental responsibility: CPK McLaren’s facility uses Spies Hecker Permahyd Hi-tec waterborne automotive refinishing technologies and solar power equipment to reduce energy consumption.
  • Award-winning service: CPK McLaren is a multi-award-winning business, recognized for its commitment to quality, service, and innovation in the automotive repair industry.

CPK McLaren’s dedication to quality, customer service, and environmental responsibility makes them the ideal choice for your insurance car repairs.

FAQs About Insurance Repairs

Can I get my own quote before going to an insurer?

Yes, getting your own quote can help you understand the repair cost and negotiate with your insurer if needed.

What if the insurer undervalues the repair?

You can negotiate with the insurer or seek an independent appraisal to dispute the valuation.

Will my premiums increase if I claim?

Your premiums may increase after a claim, but this varies with your insurer and policy.

How long do insurance repairs take?

The timeframe depends on the complexity of the damage, access to and availability of parts.

Am I eligible for a courtesy car?

Insurers may offer courtesy cars in their policies, but it’s policy-dependent.

Get in Touch

Contact CPK McLaren today for an insurance repair consultation. Our team will walk you through the process and make it easy and hassle-free. We guarantee high-quality repairs and great customer service. Contact us today.

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