The recent Seven Sharp media coverage of the rocky relationship between the panelbeating and insurance industries has put the problem in the (very) public domain. The problem raging is the dominance of the ‘big name’ insurers and the perceived mis-use of that dominance in dictating harsh terms on the small owner-operated business that constitute the panelbeating sector. For instance, it has been revealed that the impossibly low hourly rate of between $45 – $50 is imposed by some insurers – seems implausible, you certainly can’t engage the services of a mechanic, plumber or electrician for less than $80 – $100/hr, so what’s going on?
The collision repair sector was well represented in the recent Seven Sharp expose by their trade association CRA (Collision Repair Association) who explained the high investment in facilities, equipment and training required to repair modern motor vehicles. No-one seems to be listening though.
The second Seven Sharp show ended with Craig Foss, Minister for Commerce and Minister for Consumer Affairs inviting unhappy panelbeaters to write to the Commerce Commission, and the CRA agrees that their members owe it to the industry to grasp the opportunity and act. They say that not to do so implies that the panelbeating industry is happy with the way its treated. They’ve provided the link below that will take you to the Commerce Commission website: http://www.comcom.govt.nz/the-commission/making-a-complaint/ . They also say that If you want it to be confidential, then mark it as such. In a recent email to members they also state that its important that members list the reasons why they believe the market is flawed and why free market is not working. The CRA believes this includes the following factors:
• Cars are now built differently – they are increasingly complex to repair
• Compliance is a minefield & costly
• We are paid at a set rate dictated by insurers
• It’s not inflation adjusted – in the last 9 years rates have increased by 7% vs the CPI at 27%
• Rates are well below what it actually costs to run businesses up to the required standard of repair
• It’s “take it or leave it”- rates are non-negotiable
• Parts margins are also controlled by insurance companies
• No real choice – many Insurers direct work to their network, so if you are not in and agree to their terms, you get none.
• The non insurance work is small and cannot sustain most businesses
• Yet ICNZ Figures show that Motor Vehicle Insurance has never been more profitable
• The free market no longer works – we are unable to pass on cost increases and rely on the generosity of the few remaining insurance companies. Repairers are captured & exploited
• As numbers of insurance companies have reduced, the remaining insurers are mimicking each other in terms of how claims are handled & paid.
• This issue affects not only business owners and their families but also employees and their families and dependants.
• Qualified staff are hard to get & retain
• As we are unable to pay staff what they are worth, they are leaving the industry for better paid jobs.
• It is increasingly difficult to attract apprentices to an industry unable to pay competitive wages.
The CRA has also suggested contacting local MPs, or even Craig Foss, and provided the following website which lists email addresses – http://www.parliament.nz/en-nz/mpp/mps/current/. CRA General Manager Neil Pritchard also invites contact on 021 663 459