The Motor Trades Association of Australia (MTAA) has condemned insurance companies, saying collision repairers are on the brink of collapse due to the failure of insurers to compensate them fairly and reasonably.
According to the MTAA, the collision repair industry “must be treated as a partner rather than a pariah” by insurance companies that ignore mounting skills shortages, high labour, and crippling supplier costs.
The association said repairer cost increases are compounding “unsustainable cost containment business practices” of insurance companies.
“For decades, insurance companies have deployed deliberate cost containment strategies by denying to adequately pay for some legitimate costs incurred and refusing to consider meaningful adjustments for rising labour, parts and materials, and business operation costs,” said MTAA CEO Richard Dudley.
“Collision repairers have exhausted productivity improvements and cost absorption strategies across all expense areas of their business, and enough is enough. Repairers have reported one insurance company has not adjusted the price it compensates repairers for automotive paint and coatings for an unbelievable 14 years. Now, and despite three increases in price by one paint company in the past 14 months, they still refuse even to sit down and discuss the matter,’ Dudley said.
According to Dudley, the MTAA, on behalf of state and territory associations and the Australian Motor Body Repairers Association, has written to the Insurance Council of Australia seeking an urgent summit to discuss a resolution before more businesses close.
“Collision repair small businesses are already dealing with historic skills shortages and ballooning labour, parts and materials costs, and adapting to changing technology and materials in new cars,” Dudley said.
“The containers that bring parts, panels, components, wheels, [and] accessories to our shores have increased by 453 per cent since before COVID,” he added.
Dudley said these costs are being passed directly to small businesses without any ability to have them reflected in compensation.