NZ insurers ‘slow to process vehicle claims’

Panel & Paint
NZ insurers ‘slow to process vehicle claims’

The average time taken to repair a vehicle in New Zealand could be reduced by a third if insurers reduce unnecessary red tape, according to a new industry survey.

New research released by the Collision Repair Association (CRA), an industry body covering hundreds of panel beaters from around NZ, shows the average time taken to repair a vehicle is around six days – of which more than two days is lost in administration between the insurer and vehicle repairer.

CRA general manager Neil Pritchard says the level of red tape required for each repair is unnecessarily high, and means the customer is without their vehicle for longer than they should be.

"Under the current model, the typical repair process requires the insurer to accept a claim for repairs, assess the vehicle, then authorise the panel beater to quote on the repairs. Once the estimate is accepted the panel beater can begin repairs.

“The issue is there is no industry standard covering the documentation required for an insurance claim, and some insurers are regularly making requests for additional information after the estimate has been submitted by the repairer.

"The time taken up with completing this extra paperwork can be as long as the repair itself; for the customer this means their car is off the road for up to twice as long as it needs to be,” he says.

Pritchard says some of the country’s largest insurers have the longest administration time with IAG, NZI, State and AMI group considered by respondents the most bureaucratic.

He says these insurers required documentation after the claim was submitted, making more additional requests for digital images and copies of invoices than companies such as Medical Assurance, FMG and Allianz,who were ranked as having the least red tape.

Pritchard says the current industry model for vehicle insurance which is used in NZ is not helping to speed up the repair.

"In the US, insurers are required to provide a suitable replacement vehicle while their customer's vehicle is off the road – the daily cost of running the vehicle provides an incentive for the insurer to expedite the process.

“In NZ it is usually the panel beater who provides a courtesy car,” he says.

Pritchard says many policies have a clause which provides for customers to rent a new vehicle while their car is off the road, but this is not commonly exercised.

Pritchard says the organisation’s research shows Vero/AMP, Youi and Zurich were rated as the slowest to assess, process and authorise claims, with Medical Assurance, FMG and AA/SIS the fastest.

The CRA survey also asked panel beaters which insurers they would be most like to recommend to friends and family.

NZ owned cooperative Farmers Mutual Group (FMG) was the most likely to be recommended.

 

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