When you’re making a claim, your insurance company will often specify where to take your vehicle for your damage assessment and repair work. Sometimes their choice of repairer can be very inconvenient and not what you would have chosen for yourself, so for this post we will focus on the important question: why do insurance companies prioritise some repairers?
On the surface, the answer seems simple: it works out cheaper for them. Many insurers benchmark repairers based on pricing, and each insurer has their own classification system. One will list repairers under Red, Silver, Gold and Platinum priority ratings, while another will rank repairers from One (cheapest and most preferred) through to Ten (most expensive and least preferred).
This approach does make sense, but it has its downside. In many cases it disregards all of the different factors that contribute to the price of repairs, like the vehicle type and the size and extent of the repair job. For example, Superfast Repairs might complete a bumper cover replacement for a Hyndai for $800, while Megafast Repairs does the same job for a prestige vehicle and invoices $8000. Superfast is regarded as a much cheaper repairer and is more likely to receive a higher priority rating than Megafast, who will be tagged as a low priority repairer and sent much lower volumes of work (if any).
So far so good. According to logic, the cheapest repairers (the Rank One repairers) will receive the bulk of work when available and the lower-ranked repairers will receive less work, regardless of how conveniently located they might be or how good their work will be. And this is normally where we would be satisfied with the answer to our question and sign off.
But that wouldn’t be the whole truth – in reality it doesn’t always work that way. A certain insurer has recently been sending vehicles from as far as Floreat, Armadale and Victoria Park to a repairer in the Myaree area. That amounts to 45km, 59km and 26km round-trips respectively, three times over (for assessment, repairs and pick-up). The strange thing is that this repairer is a Rank Four. These vehicle owners actually drive past closer workshops with higher (i.e. cheaper) rankings on their way to their insurance company’s specified repairer. And this repairer apparently appears on the claims officer’s list for every postcode that’s entered.
We will admit that this leaves us a little confused, mainly because it doesn’t seem to be in the best interests of the owners or the insurers, who are the ones footing the bill and, in theory, making the decisions.
So the answer to our question is not so straightforward after all. If pricing is not the sole basis for comparison, as we’ve always believed it was, why do insurers prioritise some repairers?
Our conclusion: we’re not entirely sure.