Insurance company inflating repair costs
Discussion
I can't say I'm the slightest bit surprised by this:
http://www.myfinances.co.uk/insurance/2011/09/17/j...
Insurance company has a car repaired. It then passes the invoice onto its subsidiary, who adds arbitrary and made up costs onto it, who then pass it on to the at fault party's insurance company to pay.
The insurance companies go on about how personal injury claims are bumping up insurance costs, but while they are involved in this kind of blatant fraud it's hard to take what they say at face value. I wonder if this is common practice across the industry.
http://www.myfinances.co.uk/insurance/2011/09/17/j...
Insurance company has a car repaired. It then passes the invoice onto its subsidiary, who adds arbitrary and made up costs onto it, who then pass it on to the at fault party's insurance company to pay.
The insurance companies go on about how personal injury claims are bumping up insurance costs, but while they are involved in this kind of blatant fraud it's hard to take what they say at face value. I wonder if this is common practice across the industry.
A similar story came up a few months ago (will look for link) and I don't think it was the same insurer so not that uncommon.
They are always very keen to bring out the "£120 or so paid out in claims for every £100 paid in premiums" quote, maybe selling customer's details to ambulance chasers and falsifying repair costs is a way to stay afloat?
They are always very keen to bring out the "£120 or so paid out in claims for every £100 paid in premiums" quote, maybe selling customer's details to ambulance chasers and falsifying repair costs is a way to stay afloat?
The modus operandii of insurers is to get a quote from a bodyshop - usually though some industry-standard tool like AutoData - based on standard repair times, manufacturers list-price parts and an agreed hourly rate.
That's the 'repair cost' they quote and list on your history - but they don't pay that or anything like it.
They expect a heavy discount on parts (often the entire discount that the bodyshop gets) and a much lower hourly rate (often half of the agreed sum) - typically they pay about 50-60% of the total (and take their sweet time about doing that).
Any jobs which take longer than the 'book' says are the bodyshop's loss for the most part. They can raise additional issues if they arise, but it often takes EONS to get approval and it's usually simpler just to bodge them. This explains why so many accident repairs are shoddy and poor prepped - the system simply doesn't work towards a quality result.
I've always thought this entire system was fraudulent - they come up with a figure for the repair which in no way represents what they, or the third-party, will actually have to pay - that's misrepresentation at the very least.
In the case of someone choosing to pay for the repairs themselves (to save their NCB), the insurer will simply pocket the difference - this is outright fraud (and it's why, if you choose to self-repair, you should take the car to a bodyshop yourself).
That an insurer would find more ways of embezzling money isn't surprising but I think it IS time they were called-out on it because it IS fraud and their excuse is always that they're "losing money" (using complex maths which proves this despite not being based on anything like common sense).
That's the 'repair cost' they quote and list on your history - but they don't pay that or anything like it.
They expect a heavy discount on parts (often the entire discount that the bodyshop gets) and a much lower hourly rate (often half of the agreed sum) - typically they pay about 50-60% of the total (and take their sweet time about doing that).
Any jobs which take longer than the 'book' says are the bodyshop's loss for the most part. They can raise additional issues if they arise, but it often takes EONS to get approval and it's usually simpler just to bodge them. This explains why so many accident repairs are shoddy and poor prepped - the system simply doesn't work towards a quality result.
I've always thought this entire system was fraudulent - they come up with a figure for the repair which in no way represents what they, or the third-party, will actually have to pay - that's misrepresentation at the very least.
In the case of someone choosing to pay for the repairs themselves (to save their NCB), the insurer will simply pocket the difference - this is outright fraud (and it's why, if you choose to self-repair, you should take the car to a bodyshop yourself).
That an insurer would find more ways of embezzling money isn't surprising but I think it IS time they were called-out on it because it IS fraud and their excuse is always that they're "losing money" (using complex maths which proves this despite not being based on anything like common sense).
Gassing Station | General Gassing | Top of Page | What's New | My Stuff