The Victorian Automotive Chamber of Commerce (VACC) has told its body repair members that they should not unreasonably delay insurance claims when undertaking work on behalf of insurers due to ASIC’s new focus on claims handling efficiency.
“Most likely, you or your business is an Insurance Fulfilment Provider (IFP). IFPs are an insurer’s representative by law because they provide claims handling and settlement services on an insurer’s behalf. If you are an IFP, then you are involved in the claims handling process,” said Kathy Zdravevski, Industry Policy Advisor at VACC.
“If you are involved in the claims handling process then be aware that in 2024, ASIC is turning their attention to failures in insurance claims handling. As a business that undertakes work on behalf of the insurer, please ensure in 2024 you do not cause any delay in the claims handling process (that includes from the time the vehicle arrives in your shop to the time it leaves). We know insurers are less than perfect at this – they will and must improve their claims handling services. Equally, so do we as an industry, for a few reasons.”
Zdravevski offered advice on maximising claims efficiency irrespective of how good or bad the insurer’s claim handling processes are:
- Ensure estimates are sent to an insurer as soon as practicable after the vehicle has arrived at your shop. If you can’t write an estimate promptly, then release the vehicle – do not stockpile. Stockpiling may be viewed as delaying the claim’s handling process.
- Follow up insurers within two to three business days of sending the estimate if you have not heard from them, to ensure your business stays proactive (send a quick email following up the assessment – do not stay on hold for two hours waiting for the insurer to answer the phone). Ask the customer to also follow up their insurer.
- Book vehicles in as soon as possible. If you are making bookings months ahead, ensure that is what the customer wants and is happy with, and that the insurer is also aware that the ‘book-in date for repairs’ versus when the vehicle was authorised is months apart.
- Do not stockpile vehicles if you are too busy to fix them, or make a customer wait excessively to have an estimate completed and sent to their insurer. If you cannot fit in any more work, release the vehicle or ensure the customer is aware of the time delay and that the insurer is happy with you booking in the vehicle months away. Your business should not be the reason to cause any delay to the claims handling process.
- Do not become the reason for an insurer to blame you for delaying a claim or claims. When the insurer sends you an authority to repair, they are responsible for you to ensure the vehicle is repaired and returned to the customer. As an AFS licensee, the insurer is obliged under section 912A(1)(a) of the Corporations Act 2001 to do all things necessary to ensure that the financial services are provided efficiently, honestly, and fairly. IFPs and other service providers acting on the insurer’s behalf should be sufficiently overseen by the insurer to ensure they do not cause delays, as stated under the Corporations Act 2001. This includes being responsive to complaints about the quality and timeliness of work they perform, as stated under the Corporations Act 2001. Therefore, insurers need to correct their own failings with overall claims handling and processing / assessing issues, just as how a repairer must ensure an efficient and timely service is provided to the customer.
Zdravevski advised members who believe a financial firm is delaying a claim due to claims handling, poor communication and record keeping, and inappropriate use of exclusions under the policy, to contact ASIC.