Insurance giant taken on over cash settlements

 

NRMA Insurance was taken to task by Seven Network program Today Tonight over third party cash settlements, as panel shop owners and insurance customers alike challenge the insurer over cash payments.

NRMA Insurance is reviewing its handling of third party cash settlements following the revelations that the insurer was offering to settle claims for much less that the cost of repair.

The issue was highlighted on a recent Today Tonight broadcast on the Seven Network. Assessor Adam Thomas told the program that when an NRMA assessor checks a repairer’s quote to fix a third party NRMA accident claim, they offer the driver a cash settlement.

He said they go through the quote scrubbing out many items needed to fix the car – like paint, sandpaper and work shop preparation.

These claims have been backed up by a quote obtained by Australasian Paint & Panel which shows items being removed.

Mohamad Rachidi of MBM Smash Repairs of Greenacre prepared a quote to repair a Mazda had $492 taken off the R&R section of the quote, $637.14 from refinishing and $462.246 from the miscellaneous section which included paint and consumables, set up times, cleaning and taping.

In total $1592.50 was wiped off the original quote of just over $7000. The owner of the Mazda 3, was offered just $2800 as a cash settlement.

Rachidi said with the assistance of Australian Automotive Repairers Group Inc (AARGI), and a $475 fee to AARGI, the owner agreed to a settlement of just under $5500.

For many repairers, the issue is the inclusion of items such as paint materials and consumables, sand paper, paint set up time, tape, etc.

Since the program aired, the NSW MTA has been  receiving information from other panel shop owners revealing similar situations.

In a statement, NRMA Insurance has said it is reviewing payments to all third parties who made a motor claim against NRMA Insurance customers since 1 January 2009 this year in NSW.

It said it wanted to ensure that anyone who had been through a new third party settlement process – that was no longer in use – had not been disadvantaged.

“Any impacted people are being contacted by mail and will receive an additional payment if required,” the statement read.