Insurance company has to take the blame for driving up insurance cost too

[Wt_know]

April 28, 2008

Not fair to blame all car workshops for high claims

I REFER to last Monday's article, 'Puncturing inflated motor claims'.

We take this opportunity to correct some misconceptions concerning motor insurance claims and put them in the right perspective.

 

Repair costs usually vary due to different repair methods, parts used and quality of repair. In cases of cash repair, owners usually ask workshops to minimise repair cost, by repairing instead of replacing parts. In such instances, workshops are also not obliged to provide repair warranty on jobs and materials used. Incidental cost like loss of use or replacement cars will also not come into the picture.

 

On the other hand, in the case of insurance claims, professional loss adjusters appointed by the insurance company or car owner assess the damage and recommend the cost to repair the car back to roadworthy or pre-accident condition. In the case of newer cars, new and genuine part replacements are often expected. It is also essential for workshops to ensure good quality repair and to provide warranty. With the involvement of adjusters, workshops are therefore not in a position to 'inflate' repair bills. The total claim amount submitted to insurance companies would also include the incidental costs not found in the case of cash repairs. While insurers have pushed the bulk of the blame for their losses on 'inflated' claims, they have not detailed their respective payouts on repair cost and expenses for car rental, medical expenses, survey fees, search fees, legal fees and so on, thus casting a wrong light on repairers.

 

It is also interesting to note that insurance companies are often willing to pay distributor workshops a premium price for repair, but accuse independent workshops of inflating claims, even though they charge a much lower price.

 

We give an example here. In one instance, our member proposed to replace a windscreen for about $700 but was turned down by the insurance company. It later came to light that the insurance company paid around $1,500 to the distributor workshop for the same job.

 

There are black sheep in every trade but the majority of honest workshops should not be unfairly implicated with such general accusations. We are open to work with the General Insurance Association to address the industry issue if it is willing to respond to our numerous requests for dialogue sessions.

 

Bernard Low

President

Singapore Motor Workshop Association