South Australia introduces new bill for crash repair industry

Sam Duluk MP, the South Australian member for Waite and former presiding member of the Economic and Finance Committee, has introduced the Fair Trading (Motor Vehicle Insurers and Repairer) Amendment Bill 2021 in South Australia (SA).

In his address to the State's House of Assembly, Duluk said the Economics and Finance Committee initiated an inquiry into the motor vehicle insurance and repair industry following discussions with his constituents and crash repairers in his electorate. They continued the inquiry by following committees leading to his lodging of the amendment, as reported by Paint and Panel.

Duluk stated that the bill highlights the crash repair industry's efforts to raise key issues with car owners' “right to repair” over the years, such as:

• Insurers steering customers to their preferred repairer network;
• Insurers setting repair allowances for altering a repairer's cost estimate;
• Insurers using “funny time, funny money” to convert a repairer's estimate to their preferred estimation methodology;
• Insurers using a “two-quote model” to force a cash settlement; and
• Insurers requesting repairers to use non-authorised genuine parts or incorrect repair methods without consumer knowledge.

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According to Hansard, the Economics and Finance Committee received 53 written submissions and heard from 35 witnesses across seven public hearings and two on-camera hearings about issues encountered while trying to get vehicles repaired as part of an insurance claim.

The issues included:

• difficulties in consumers accessing a repairer of choice and claims of insurers steering consumers toward their preferred network;
• using second-hand and/or non-original equipment manufacturer parts in repairs and related safety, warranty, and liability concerns when using those parts;
• a lack of transparency of information, with consumers often not being made fully aware by insurers of all the details related to their repairs and/or insurance policies;
• disagreements over the methodology used by crash repairers and insurers to assess the repairs needed and the cost of said repairs to restore the motor vehicle to pre-accident condition and the quote negotiation process; and
• insurers choosing to provide cash settlements to consumers instead of repairing their vehicles.

According to the Paint and Panel report, the committee made 11 recommendations focusing on increasing transparency, consumer choice, and awareness across the motor vehicle insurance and repair industry while maintaining consumer safety by ensuring that motor vehicles repaired as part of insurance claims are restored to their pre-accident condition.

So far, Western Australia (WA), New South Wales (NSW), and the SA parliament have all prepared reports demonstrating the need for action. In addition, the NSW passed legislation already, but without penalties, and has shown that its legislation does not have the requisite teeth to assist consumers or small businesses.