Can an Insurer Assess and change your estimate without consultation?
Believe it - This is still happening and the answer is: NO.
Adjustments to your estimate without consultation is a breach of section 4.2 (b)(ii) and 6.1(a), 6.3 of the 2017 MVIRI Code of Conduct
4.2 Insurers will:
(b) in their dealings with Repairers in relation to Repair work:
(ii) consider estimates in a fair and transparent manner, and will not refuse to consider an estimate on unreasonable or capricious grounds;
6.1 Where competitive estimates are sought:
(a) Insurers will ensure the estimation process is fair and transparent;
6.3 Without limiting Insurers’ and Repairers’ rights to fair and transparent negotiation, the Insurer may not unreasonably or arbitrarily alter the Repairer’s estimate unless the Insurer insists on changing the repair process, parts or materials to be used (subject to sub-clause 7.4).
You are also exposed to rectification guarantees if your estimate doesn’t say:
“Any changes to this estimate are subject to clause 7.4 & 7.5 of the 2017 MIVIR Code of Conduct”
This is because:
7.4 If repairs are carried out under a contract between the Insurer and a Repairer, where an Insurer requires a Repairer to use a repair method or part that differs from that recommended by the Repairer, and the Insurer and Repairer are unable to reach agreement to that change, the Insurer will provide such a requirement in writing
7.5 Where the Insurer provides a written requirement under sub-clause 7.4 the Insurer agrees to pay the direct loss or liability incurred by the Repairer by reason of a quality, structural, Presentation or safety defect caused by complying with the requirement.
The Repairer must immediately notify the Insurer of any claim made against the Repairer that may give rise to a claim under this sub-clause.
The Insurer is not liable to pay any loss or liability incurred by the Repairer to the extent that the loss or liability arises from faulty workmanship.
This includes changes to repair times (method), fitment of parallel or aftermarket or used parts, or materials used the course of returning the vehicle to pre-accident condition.
A recent code determination in NSW found in favour of the repairer in an example of this through several of the findings.
If you have any questions please don’t hesitate to contact our Industry Engagement Specialist, Paul Back by clicking here for more information.Don’t let it happen to you!