Warning to all smash repairer's

The content on this page has been specifically designed as an information portal for all proprietors of motor vehicle collision repair shops. This is current and pertinent industry information offering relevant suggestions for your consideration towards securing your financial survival and continued longevity in the smash repair industry pursuant to the forthcoming implementations.

Whilst IVIC believe this information to be true and reliable at the time of writing, it is recommended each smash repair shop proprietor should seek independent professional advice concerning their own legal, financial and solvency position.

"The storm clouds cometh so too are the winds of change for each and every smash repairer"

In the third quarter of 2007 the International Vehicle Integrity Centre Limited (IVIC) will open its Victorian Head Office and Inspection centre whilst simultaneously will introduce the IVIC 'Structural Tolerance Report' onto the Australian market.

 

The IVIC 'Structural Tolerance Report' product is the result of over seventy (70) collective years of experience in the motor vehicle smash repair industry by senior IVIC personell. It is designed to dimensionally measure, analyse and account on all structural tolerance points in collision repaired motor vehicles.

The IVIC 'Structural Tolerance Report' performed very successfully in all real market prototype testing of approximately five hundred (500) collision repaired motor vehicles. The inspection results established that approximately ninety percent (90%) of all collision repaired vehicles having structural collision damage, failed collision repair integrity after each vehicle had been repaired and returned to their owners.

Pursuant to their repair warranty contract with the relevant insurers, the smash repairers responsible for the inferior repairs were later required to meet the total cost of all remedial reworks. Some smash repairers were further forced to purchase the repaired vehicles after customers not being satisfied, further pressured insurers to write-off the vehicle in lieu of having them remedially repaired. Some smash repairers subsequently purchased several vehicles.

Alarmingly the overall general quality and safety of collision repairs has diminished to very concerning culpable levels of negligence which can now be conclusively established that smash repairers are primarily responsible. Consequently we will soon see a marked increase in smash repairers being sued for compensation and some even charged with industrial manslaughter. Smash repairers might argue they do not get a 'fair go' with the quantum involved in repair budgets as approved by insurers, this alone will not absolve their negligence particularly when it is always the smash repairer's first choice to either accept or reject the insurer/assessor amended quote and quantum. It appears however the smash repairer's first choice is to accept the reduced quote only on the motivation to remain in business and is made without any regard toward upholding their Duty of Care responsibilities.

The underlying message here is that many smash repairers are knowingly being extremely foolish in not upholding their legal (and moral) Duty of Care responsibilities when they repair collision damaged vehicles.

In conjunction with the opening of the inspection centre, IVIC intend to commence promoting a continuous public awareness campaign to educate the Australian motoring population of the potentially fatal dangers and negligence involved in the smash repair industry.

 

What the smash repair industry must now come to understand is that there has never before been an active government or other responsible motoring authority, monitoring the quality or integrity of collision repairs. Quality and safety control has in the past been only measured by the strength of a customer's complaint and similarly, owners of collision repaired vehicles have not had access to where they could obtain a forensic styled technical report to determine the integrity of collision repairs, which is until now.

 

The IVIC inspection centre is designed to inspect up to two hundred (200) collision repaired vehicles each week. It is envisaged a further three hundred (300) national franchise inspection centres will open of which forty (40) are earmarked for Victoria . Therefore it will only be a matter of time before any number of vehicles repaired by your panel shop will undergo an IVIC 'Structural Tolerance Report.'

The ensuing problem for many smash repairers is perceived to be devastating. Approximately ninety percent (90%) of the smash repair industry hang a 'Recommended Repairer' shingle outside their premises and protect its consumer perceived stamp of approval as if it were something sacred to worship. However 'recommended repairer' shops rely totally on insurance funded collision repair work, yet they are the ones who 'cop it' the hardest and will continue to suffer further as the IVIC 'Structural Tolerance Report' is accepted and used by the motoring public.

IVIC envisages inspecting thousands of collision repaired vehicles resulting from complaints received from current and former aggrieved customers particularly those which had their collision damaged vehicles repaired by 'recommended repairer' shops.

Former customers have since claimed they have simply not been able to obtain crashworthy compliant integrity collision repairs even after returning the vehicle a number of times to these shops for remedial repairs. It appears the 'sausage factory' culture instilled into these shops negates the ability to produce integral quality collision repairs.

However these inferior and dangerous repairs are not limited to only the 'recommended repairer' shops, they are found throughout the smash repair industry. If early indications are correct, hundreds (or possibly thousands) of smash repairers in the very near future will begin to endure enormous personal and financial suffering as they, from their own resources, are forced to 'make good' their past wrong doings under their compulsory three (3) year (and in some case 5 year) workmanship warranty agreement. For many smash repairers these additional unexpected costs will certainly be cost prohibitive and they most likely will find themselves in liquidation or bankruptcy.

Some smash repairers who hold Workmanship Warranty Insurance will try to claim the additional costs against their policy; unfortunately for them such insurance does not provide cover where human negligence was the cause, it is unlikely that their claims will be approved.

What smash repairers must now accept is that whilst the Insurance Companies may hold the cheque book and certainly have a contributing involvement toward negligent collision repairs, the bottom line will always be that the ' buck stops with you '.

Are you going to be one of the many smash repairers who will suffer?

What should 'Smash Repairers' do to better protect themselves in the future?

IVIC acknowledge that smash repairers over the past two decades have been dealt the 'raw prawn' via their paymaster, the insurance company, when it comes to receiving a fair price for a collision damage repair quote.

Ironically however, smash repairers have become their own enemies and sealed their own fate by relenting to accept inadequate quantum reduced collision repair quotes, in fear that they will not acquire any new work from insurance companies if they do not conform to the unjust but established protocols.

Consequently and shamefully the standard of collision repairs has been reduced to reprehensible levels of negligence by the very members of the industry who need to better protect themselves. Smash repairers have put themselves into a very difficult position where they can no longer afford to produce crashworthy compliant integrity collision repairs within the allocated repair budget.

As preposterous as it may sound, most panel shops which accept insurer/assessor reduced repair quotes would be barely meeting business overheads let alone turning a profit. In most cases the risks taken by proprietors never seem to compensate the effort or responsibility required, as many panel shops are financially supported by overdrafts over the family home or other assets, with proprietors taking little or no wages after costs.

It has been suggested that if an audit were conducted on smash repair shops today sadly, many smash repairers would be deemed insolvent. Equally, very few smash repairers will be able to successfully re-engineer their corporate structure and address these new upcoming liabilities to start afresh, whilst others having the family home mortgaged to support the business will loose everything.

As IVIC gears up to inspect more collision repairs, the past wrong doings of smash repairers are going to be extremely difficult to overcome without huge cost sacrifice. Smash repairers must now immediately seek the appropriate professional advice and take affirmative action to better protect themselves from their past mistakes and equally, for all future collision repair work. Complete new mindsets need to be established and be empowered within the industry for repairers to not only survive, but also to make acceptable profits.

To achieve this smash repairers must commence to acknowledge the following:

  • Stand united together as a group not as individual smash repairers.
  • Ensure all quotes are quantum sufficient to repair all collision damage to safe crashworthy integrity and nothing less.
  • Reject any assessor/insurer reduced quote where the smash repairer reasonably believes the quantum offered is inadequate to reinstate crashworthy integrity.
  • Whilst the earlier point may in the early stages be somewhat difficult to enforce, smash repairers should accept the reduced quote only after the assessor/insurer has 'signed off' removing the smash repairer from all and any liability concerning the standard of quality and integrity of repairs pursuant to the amended quote.
  • Under no circumstances accept new work having an inadequate repair budget.
  • Do not accept 'cash settlement' repairs - in these cases the insurer has legally absolved itself from all legal, financial and warrantt costs, you will be left solely responsible for these costs for many years after the completion of the repair.
  • Complete all work and replace all parts as quoted.
  • Ensure to use only genuine replacement parts where the customer's insurance policy specifies and obtain written instructions from the insurer concerning the fitting of all other replacement parts.
  • Do not use substandard or antiquated smash repair equipment i.e. Mig welders
  • Ensure the collision repair equipment you currently use is manufacturer approved for each particular make and model of vehicle being repaired. Request the approvals from your equipment supplier and have them displayed in the repair shop to show your for customers. Use them as a sales tool to give your customers the comfort they want that their vehicle will be repaired correctly.
  • Do not repair collision damaged vehicles on non manufacturer approved smash repair equipment.

Those smash repairers who do not change from their current collision repair methods and practices, will quickly learn insurers will soon apply pressure to them to purchase many of the vehicles which they have repaired and have become 'problems' to the insurer, also compensate the insurer accordingly for any loss.

Not many smash repairers will be financially capable to absorb the cost of purchasing more than maybe one or two of their inferior repaired vehicles; however another difficulty for smash repairers will also be when they try to sell the structurally compromised defective vehicle to mitigate their own losses.

As smash repairers become the vendors of their collision repaired vehicles, their obligation to uphold their Duty of Care continues, they must disclose all faults with the vehicle they are selling to every potential private purchaser. This obligation also applies to advising auction houses and used car dealers accordingly. Severe penalties and or imprisonment may apply to offenders caught breaching their duties.

For qualification of the above, please be advised:

  • All complaints
  • All collision repair budget enquiries
  • All Duty of Care inquiries
  • All smash repairer warranty enquiries

should be referred to the relevant senior assessing manager associated with your contract provider (insurance company)