Upset over new guidelines
14 Mar 2017
The collision repair industry is upset over insurers position on parts procurement and selection which they say raises potential issues around warranties, work volumes and resulting delays. They are very concerned about the implications for all new vehicle owners.
IAG have issued a New Zealand parts procurement update in which they say claims volumes have continued to increase along with claims costs and as a result "IAG has been reviewing its approach to parts procurement as this makes up a large amount of the overall repair costs."
They go on to clarify IAG’s position on parts procurement and selection by saying assessors have been asked to use the following guide:
- Vehicles up to 2 yrs old new parts preferred (incl. NZ new or parallel imported)
- Vehicles over 2 yrs old recycled parts preferred
Exceptions may apply due to structural repair requirements, mechanical, electrical and electronic considerations, and parts availability/pricing.
The repair industry say the common approach for insurers is to use new up to 3 years and often more. They say "there are potential issues around body warranties if non-genuine parts are used." The industry is concerned they will face increased volumes of work and repair delays.
"These are exacerbated by the use of recycled parts which often present additional challenges around quality and completeness.
"We also worry where warranty liability will rest. IAG will guarantee the repair for as long as the insured is the owner, but what then if a 10 year body warranty rusts out after the vehicle changes hands."