IAG responds to MTA claims of insurers underpaying collision repairers

In response to the Motor Trade Association’s (MTA) press release: “Insurance payments to collision repairers not keeping pace with costs“, IAG NZ has prepared the following statement:

“In the release, MTA Advocacy and Training General Manager Dougal Morrison states that: “… insurer-controlled rates for crash repairs have not kept up, making many businesses unprofitable”.  However, it is inaccurate to quote a rate per hour as collision repairers who are part of IAG NZ’s Approved Collision Repairer Network are not remunerated on the amount of time it takes for a repair.

In response to Mr Morrison’s quote: “Apprentice numbers are continuing to fall…”, for more than a decade, IAG has supported the crash repair business through sponsorship of the State Apprentice Scheme, which has assisted a large number of skilled and qualified graduates to successfully enter the vehicle repair industry.  Each year, we receive feedback from our repairers who consistently tell us that our sponsorship of the scheme directly contributes to ensuring a steady stream of skilled and qualified people are available to repair vehicles safely.

Mr Morrison also states that insurers dictate where repairers buy parts from but for a number of years, repairers have sourced new and used vehicle parts online from Partstrader.  This site is independent of insurers i.e. insurers do not select nor enforce to repairers the specific parts that suppliers should use. The ability to source parts from across the country often assists repairers, particularly when they are located in a more rural location.

The safety of our customers, and so the quality of repairs to their vehicles, is of paramount importance to us so any commentary regarding vehicle safety and repair standards is of interest to us.  The MTA’s claim that reputable collision repairers are finding increasing numbers of repairs that they would describe as substandard is therefore of serious concern to IAG NZ.  We have no evidence of falling repair standards and have an interest and a passion for supporting the industry to ensure high standards are maintained.

A vehicle that is referred by an insurer is highly regulated to ensure a safe and quality repair, which mitigates the possibility of substandard repairs.  Many insurers – including IAG NZ– require their repairers to confirm that they meet the manufacturers’ specifications i.e. use the correct tools for each vehicle, and are qualified to complete a safe repair before works commence.  In the case of a structural repair, i.e. when a vehicle is damaged and requires welding to mend the frame, the repairer is required to have the correct equipment and the welder must be qualified.

All of IAG NZ’s assessors are qualified ex-panel beaters and or tradesmen. The majority are also I-Car Bronze qualified – a trade qualification that is recognised industry-wide on an international level (more information about this qualification can be found here:  http://www.i-car.co.nz/mig-steel-welding-qualification/).  Any assessor who is new to IAG is required to attend the course.  As qualified tradesmen, our assessors routinely discuss the repair, methodology and quality of parts used in a repair with the repairer before giving their approval for any works.

We have a team of Quality and Compliance Analysts – all of who are qualified ex-panel beaters and motor assessors – who carry out random inspections of our customers’ vehicles both during the repair process and upon completion.

The repair industry is not regulated and so there are no barriers to entry.  IAG NZ is currently conducting its Request for Proposal (RFP) for new and existing collision repairers to be considered for its Approved Repairer Network from 01 July 2014.  All collision repairers who wish to be considered for our network have until 20 December 2013 to submit their application.  More information about our RFP is available on
IAG NZ’s website.”

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