There are car repair shops that practice unreasonably high rates, both for repairs (which reach the amount of 1,000 lei per hour of work) and for cars rented for the period of repair (car rental), requests for compensation, in this case, even exceed 100,000 euros. and all of this is also affecting prices in the RCA market, the Insurance Fraud Collaborative Association (ACADA) warned on Friday.

Given the current context in the insurance industry, the Association signals that “recently we have observed an alarming increase in the phenomenon of insurance fraud, as well as a series of abuses, a situation that significantly affects the evolution of compensation in the case of RCA type policies.

Permissive legislation gave rise to the emergence of so-called loss intermediaries

ACADA’s representatives argue that “permissive legislation has artificially created a category of so-called loss brokers, people whose primary goal is to maximize compensation for their own benefit.”

• “Such speculative actions (which present themselves as support services for injured parties) consist of loss notices, assignment of claims, loss advice, thus contributing to unjustified increases in compensation, and in most cases, the injured parties are unaware of it. the large sums required for car repairs and rentals are exaggerated.
• All these abuses and frauds significantly increase the cost of claims, which leads to higher insurance premiums, ultimately the honest consumer/policy holder suffers the most, who is forced to pay a higher insurance premium to compensate for the loss.” This is stated in the ACADA press release.

Example: Compensation for car repair in the amount of 62,000 lei is required

In support of the above assertions, the association presented a case of compensation being sought for a car whose market value was significantly lower than the valuation that the injured party came with from the car repair shop.

In particular, for a 2012 Volkswagen car with a mileage of 270,000 kilometers, the insurer assessed the compensation at approximately 62,000 lei.

The estimate with which the injured party later presented himself for settlement, from the car repair shop where he had his car repaired, was 102,000 lei, including the repair costs of 58,000 lei plus the cost of 44,000 lei related to the rental (car rental) of another car during the repair of a damaged car.

In this case, the insurer paid for this repair, precisely because it is required by law.

• “The current RCA legislation says that the repair company, not the insurers, installs the technological solution. Under current law, unscrupulous services are allowed to bill the maximum amount of compensation to treat a damaged car as a total loss, even if the damage is minor, such as a side door.
• In this case, it is an old Volkswagen, which is no longer produced, the doors are aluminum, and the technological solution of the car service was replacement, not repair. The cost of such doors is somewhere around 29,000 lei.” ACADA representatives explained to HotNews.ro.

According to them, there are many situations when such cars are not actually repaired according to the estimate, and the putty and repair are superficial, the rest of the money remains in the car service, which additionally exposes non-use. and renting another car for the repair period (rent a car).

How car repair fraud works

Generally, when someone is involved in an accident, the first step is to report the claim to the RCA insurer of the at-fault driver’s car.

• “With the relevant insurance company, the claims adjuster carries out the assessment and calculation in specialized systems such as Audatex and issues a claim assessment report to the injured party.
• This means that the insurer takes over the compensation that it could have awarded according to calculations in specialized systems.
• In addition, the injured party can choose to repair the car at any authorized service or receive money on his account from the insurer and then repair the car himself.
• In this case, if the victim is unscrupulous and has a contract with a car service, this repair department repairs his car at a much higher cost than the insurance companies estimate.
• Many insurers have agreements with service providers (partners) where certain processing fees are agreed upon. Other services may charge any rate at their discretion. An unscrupulous service can estimate the payment for settlement with the insurer much higher than the market average, and this is allowed by law,” ACADA representatives also clarified for HotNews.ro.

Car repair price caps “escaped” from 2 HG projects on RCA price caps

It should be noted that the Government has so far rejected two draft Government Decrees on limiting RCA prices, but none of them took into account the limitation of the cost of repairing a car, although this is reflected in the compensation that insurers are obliged to pay. , which is further transferred into the final price for RCA.

The Competition Council gave a favorable opinion on the establishment of maximum rates for RCA, but with a recommendation: during the 6-month price freeze on RCA, the upper limit of compensation related to material damages should also be established, i.e., the limitation of repair costs in car services.

The Competition Council’s recommendation for the opinion given on RCA’s price cap was as follows:

• “When applying the provisions of this Government decision, the level of compensation for material damages will be established on the basis of information received through platforms specializing in the assessment and management of car damages at the time of their assessment.”

With the appeal of HotNews.ro, the president of the Competition Council explained the following:

• “We propose that repairs should be carried out during the limitation period, but not only based on damage assessment platforms such as the Audatex platform,” said Bohdan Chiritsoyu, president of the antimonopoly body.

What does this mean for drivers?

The platforms referred to by the authority are actually specialized loss calculation systems such as Audatex, DAT, Eurotax, etc.

In other words, property damage costs should no longer exceed the value in systems like Audatex, which receives data from automaker importers.

Currently, according to insurance specialists contacted by HotNews.ro, there are car dealers who have contracts with insurers and charge lower prices than the dealerships listed on Audatex, while some independent car repair shops charge prices 70% higher. than this system.

• SEE THE CONCLUSION OF THE COMPETITION COUNCIL HERE

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