Code Hammered Out For Car Repairers

Sydney Morning Herald

Wednesday May 3, 2006

Jonathan Pearlman

A MANDATORY code of conduct for car insurers will be introduced by the State Government to try to settle a long dispute between smash repairers and NRMA Insurance.

The Minister for Fair Trading, Diane Beamer, said the code was a breakthrough and would provide guarantees to consumers, repairers and insurers.

"The dispute between IAG-NRMA Insurance and the Motor Traders Association has highlighted the need to put rules into place that ensure a fair deal for consumers and a sustainable industry for both repairers and insurers," Ms Beamer said.

The code of practice, expected to be announced today, will be based on a voluntary code being drawn up by a federal taskforce. It will aim to resolve a fierce battle between NRMA and repairers who say that an internet system set up last year forces them to underbid for repair work and results in unsafe and shoddy work.

Instead of seeking quotes for repairs, NRMA customers take their cars to assessment centres. Photographs and descriptions of the damage are posted online, and the company's preferred repairers are invited to bid for the work.

The Motor Traders Association campaigned against the system, saying it encouraged cost-cutting and the use of unsafe parts.

In March an independent MP, Richard Torbay, introduced a private member's bill that proposed jailing insurers who used preferred repairers or parts.

This prompted NRMA Insurance's parent company, IAG, to let customers choose their own repairers. This began this week and will be monitored by the Government.

Ms Beamer said the Government would not support Mr Torbay's bill but she credited the threat of his legislation with having resolved the dispute.

"The proposed anti-steering legislation introduced by independent MP Richard Torbay focused the Government on the need for alternate negotiated solutions in this dispute," she said.

The state code is expected to include arrangements for dispute resolutions by an independent umpire.

© 2006 Sydney Morning Herald

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