When your insurer’s repair cost estimate feels off, you can challenge it. Insurers often use cheaper parts, outdated labour rates, or miss hidden damage, leaving you short-changed. Here’s a quick rundown of how to dispute their assessment:
- Understand their process: Insurers use assessors, preferred repairers, and aftermarket parts to cut costs, which might compromise quality.
- Collect evidence: Take detailed photos, keep all communication, and get independent repair quotes.
- Compare quotes: Look for differences in parts, labour hours, and repair methods between your quotes and the insurer’s.
- File a complaint: Write a clear, professional letter to your insurer, highlighting discrepancies with evidence.
- Escalate if needed: Use the insurer’s internal dispute process, then take it to the Australian Financial Complaints Authority (AFCA) if unresolved.
- Stay mobile: You’re entitled to a replacement car during repairs or disputes – services like Not My Fault can help.
How Insurers Calculate Repair Costs
The Repair Cost Assessment Process
Getting a clear picture of how insurers calculate repair costs is essential if you ever need to challenge their estimates. Once you file a claim, the insurer typically sends an assessor to evaluate the damage. This person’s job is to identify the necessary repairs, estimate the time required, and calculate the associated costs.
"Insurance estimating refers to the process of calculating the expected costs associated with an insurance claim, particularly the expenses required to repair or replace damaged property or cover other insured losses." – Project Plus Services
Most insurers rely on preferred repairer networks – workshops that agree to negotiated rates, helping insurers control expenses. While this arrangement can keep costs in check, it might also limit your repair options and potentially affect the quality of the work done.
Another cost-saving measure insurers often use is opting for aftermarket parts instead of Original Equipment Manufacturer (OEM) parts. While aftermarket parts are cheaper, they may not offer the same fit or performance as OEM parts, which are made by the car’s original manufacturer and are designed to match your vehicle perfectly.
Labour costs also play a big role in repair estimates. Insurers negotiate lower hourly rates with their preferred repairers, which can lead to a practice known as "Funny Time, Funny Money". This is where repairers may inflate the hours worked to compensate for the reduced rates. The Motor Trades Association of Australia has been advocating for fairer practices by promoting transparent "real times guides" to address these discrepancies.
For vehicles with severe damage, insurers use what’s called the total loss threshold. This applies when repair costs exceed 65–75% of the car’s market value. To determine this value, insurers turn to industry guides like Redbook or Glass’s Guide, factoring in details such as the car’s age, condition before the accident, and potential salvage value.
These practices lay the groundwork for some of the common issues you might face when dealing with an insurer’s assessment.
Common Problems with Insurer Assessments
While the process above outlines how insurers calculate repair costs, it’s not without its flaws. Several common issues can put vehicle owners at a disadvantage.
Rising repair costs are one such challenge. Inflation, labour shortages, supply chain disruptions, and advanced vehicle technology have all driven up costs. However, insurer assessments don’t always keep pace with these realities, leaving you with estimates that may fall short of what’s needed.
Assessors can also overlook hidden damage, underestimate repair times, or use outdated labour rates that don’t match current market conditions. These factors can lead to repair quotes that don’t fully cover the necessary work.
Another issue is the reliance on aftermarket parts, which, while cheaper, may not fit as well or perform as reliably as OEM parts. This can affect your vehicle’s safety, resale value, and long-term performance – factors that insurers might not fully account for during their assessments.
Delays in processing claims are also a frequent problem. According to the Australian Financial Complaints Authority (AFCA), 25% of complaints involve delays, while 19% specifically relate to disputes over repair costs. These delays can leave you stranded without transport for weeks or even months as disputes drag on.
The preferred repairer system can sometimes work against you too. While insurers benefit from cost-saving agreements with these workshops, you might find yourself limited to repairers who prioritise cutting costs over delivering high-quality work. Independent repairers often provide better service and use OEM parts, but insurers may discourage their use by imposing financial penalties or delaying approvals.
Lastly, your geographic location can play a role. In rural or regional areas, there may be fewer approved repairers available, leading to longer wait times or requiring your vehicle to be transported over long distances for repairs.
How To Handle Repair Disputes? – Auto Coverage Explained
Collecting Evidence for Your Dispute
Once you understand how insurers calculate repair costs, the next step is to gather evidence to address any discrepancies. A strong case relies on clear and organised documentation. The better your evidence, the stronger your position to challenge the insurer’s figures and achieve a fair resolution.
Required Documents and Records
Start by collecting all the paperwork related to your claim and the accident. Photos taken immediately after the incident are crucial for documenting the damage before any repairs take place. Capture the damage from multiple angles to ensure nothing is missed.
Request and review your insurer’s detailed report. If the report lacks itemisation, ask for a breakdown of the calculations to better understand how the costs were determined.
Keep a record of all communication with your insurer, including emails, letters, and notes from phone conversations (include dates, times, and names of the people you spoke with). Retain original repair quotes for comparison purposes. Additionally, invoices from completed repairs, your vehicle’s service history, and its registration papers can help validate the car’s condition before the accident and support your claims about necessary repairs or parts quality.
Getting an Independent Repair Quote
An independent repair quote can be one of the most effective tools for disputing your insurer’s assessment. Platforms like AutoGuru allow you to obtain instant quotes and book mechanics, making it easier to gather multiple evaluations.
Seek quotes from various sources, including local independent mechanics, specialised repair shops, and services like Motostead, which offers "Car Repair Cost Assessing" and "Car Repair Estimating and Quoting." These experts provide detailed, impartial evaluations of the required repairs and associated costs.
Be cautious when considering quotes from chain mechanics for non-critical repairs, as they may recommend unnecessary replacements. When requesting quotes, provide the same damage details and photos you shared with your insurer. Ask for a written report that outlines the required parts, labour, and estimated completion time. Independent assessors often check for issues like uneven panel gaps, paint quality, and hidden damage that may not have been addressed in the insurer’s report.
Motostead highlights the value of independent assessments:
"Our independent assessment will give you the information you need to reject the repair and request that it is completed correctly. It will also strengthen your case if you have to go to court."
― Motostead
Finding Differences in the Assessments
After obtaining independent quotes, compare them against your insurer’s assessment. Focus on the itemised breakdown in both reports, including parts, labour hours, and associated costs.
Pay special attention to part prices. Look for significant differences in the cost of parts between quotes. Similarly, compare the labour hours and hourly rates. With the average mechanic’s rate in Australia typically exceeding $150 per hour, noticeable discrepancies warrant further investigation.
Ensure both assessments address the same repairs and damage. Independent evaluations should confirm that the proposed repairs meet the car manufacturer’s standards and restore your vehicle to its pre-accident condition. This comparison can reveal whether the insurer’s assessment includes any shortcuts or lower-quality repairs.
Document every inconsistency you find. Creating a simple table or list that compares the insurer’s figures with those from independent quotes can turn your concerns into clear, actionable evidence. With these discrepancies recorded, you’ll be well-prepared to challenge your insurer’s assessment.
How to Lodge Your Dispute with the Insurer
Once you’ve gathered your evidence and documented the discrepancies, it’s time to formally challenge your insurer’s repair cost assessment. Make sure your evidence is presented clearly and follow the established procedures. Most insurers have specific processes for handling disputes, so understanding these will help you navigate the system more effectively.
Writing Your Complaint
Your complaint letter is the cornerstone of your dispute. It should be clear, professional, and well-structured. Start by including your policy details, the date of the accident, and a brief summary of the issue.
Organise your complaint around the discrepancies you’ve identified. Use the comparison table you created to highlight differences between the insurer’s assessment and your independent quotes. For each item in dispute, list the insurer’s figure, your independent quote, and the variance. Include details like part numbers, labour hours, and associated costs.
Attach all relevant documentation to support your case. This might include independent repair quotes, photos of the damage, correspondence records, and any expert assessments. Number each attachment and reference them in your letter. For instance, "As shown in Attachment 3, the independent assessment from XYZ Motors quotes $2,400 for the rear bumper replacement, compared to your assessment of $1,800."
Be specific about what you want to achieve. Whether it’s an increase in the repair cost, recognition of additional damage, or upgraded parts, state your desired outcome clearly. Set a reasonable timeframe for their response – 14 to 21 days is typically appropriate for an initial acknowledgment.
Maintain a professional and factual tone throughout your letter. Avoid emotional language or accusations, and focus on the technical discrepancies. Present your case as a request for an accurate assessment rather than a challenge to the insurer’s abilities.
Send your complaint via registered post or email with a read receipt to ensure there’s a record of delivery. Keep copies of everything you send, including the date and method of delivery, as this documentation will be invaluable if you need to escalate the matter.
If your complaint doesn’t result in a resolution, you can move on to the insurer’s Internal Dispute Resolution process.
Using the Insurer’s Internal Dispute Process
Once you’ve submitted your detailed complaint, the next step is to engage the insurer’s Internal Dispute Resolution (IDR) process, which is a requirement for all Australian insurers under ASIC rules. This process typically involves escalating your case to a dedicated disputes team or senior manager.
Most insurers acknowledge complaints within 2–5 business days and aim to resolve them within 30 days. However, complex cases that involve technical assessments may take longer. When submitting your complaint, ask for clear timeframes and the name of the person handling your case.
The disputes team will usually review your claim file and may commission their own independent assessment. They have the authority to override the initial decision and approve additional costs or alternative repair methods. This is why strong technical evidence is crucial at this stage.
During the review process, the insurer might request more information or clarification. Respond quickly to these requests to avoid delays. Keep a detailed record of all interactions, including dates and outcomes of phone calls, as well as copies of emails or letters.
If the insurer suggests a joint inspection, agree to it. These inspections often help resolve disputes faster, as both parties can examine the damage together and discuss the technical requirements face-to-face.
The IDR process concludes with a written determination explaining the insurer’s decision. If they uphold your complaint, they may issue a supplementary payment or approve additional repairs. If they reject your complaint, the letter will outline your right to escalate the matter to the Australian Financial Complaints Authority (AFCA) and provide AFCA’s contact details.
Keep thorough records throughout this process. Document all correspondence, note the dates and outcomes of discussions, and maintain a timeline of events. This information will be critical if you decide to take the matter further.
While you’re using the IDR process, you can still seek legal advice or prepare for potential involvement with AFCA. Many disputes are successfully resolved during this stage when supported by clear evidence and well-organised documentation.
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Taking Your Case to AFCA or Court
Once you’ve gathered evidence and completed the Internal Dispute Resolution (IDR) process with your insurer, you might need to escalate your dispute further. Here’s how to proceed.
If the IDR process doesn’t resolve your issue, you can take your case to the Australian Financial Complaints Authority (AFCA) for a free and binding resolution, or you can consider legal action. Keep in mind, though, that legal proceedings can come with significant costs and risks.
Filing a Complaint with AFCA
AFCA offers a no-cost avenue to handle disputes that remain unresolved after IDR. It has the authority to address repair cost disagreements and can issue decisions that are binding on insurers (if you accept their determination).
Before approaching AFCA, you must complete the IDR process with your insurer. AFCA requires evidence that you attempted to resolve the issue directly with the financial firm. Make sure to keep all records from the IDR process, including the final determination letter from your insurer, as these will be essential for your complaint.
You can lodge your complaint through AFCA’s online portal at afca.org.au or by contacting them directly via phone (1800 931 678) or email (info@afca.org.au).
When submitting your complaint, include the following details:
- Your contact information
- The insurer’s name
- A clear explanation of the repair cost dispute
- Steps you took during the IDR process
- Relevant supporting documents, such as independent repair quotes, the insurer’s assessment, damage photos, correspondence records, and the IDR determination letter
Be clear about what you want AFCA to resolve. Whether it’s additional repair costs, recognition of hidden damage, or approval for genuine parts, specify the outcome you’re seeking. This clarity helps AFCA understand your expectations.
After lodging your complaint, AFCA will acknowledge it within a few days and provide a reference number. They will then determine if your case falls within their jurisdiction and meets eligibility criteria. Straightforward disputes may be resolved in weeks, while more complex cases could take months.
AFCA may mediate between you and the insurer or conduct a detailed investigation. They can review the insurer’s claim file, arrange independent assessments, and make decisions based on fairness and reasonableness. If they decide in your favour, they can order the insurer to cover additional repair costs, reimburse related expenses, or take other corrective actions.
It’s worth noting that AFCA’s decisions are binding on insurers but not on you. If you’re dissatisfied with their determination, you still have the option to pursue legal action, although this is rare due to AFCA’s thorough review process.
If AFCA’s resolution doesn’t fully address your concerns, you can then explore legal options.
Getting Legal Help
When AFCA isn’t able to resolve your dispute, or if your case involves complex issues or significant amounts, you might consider taking legal action through courts or tribunals. However, this step requires careful thought about the costs, time, and risks involved.
Administrative tribunals, such as the NSW Civil and Administrative Tribunal (NCAT) or the Victorian Civil and Administrative Tribunal (VCAT), provide a more affordable way to resolve disputes. However, each party typically covers their own legal costs.
For claims under $10,000, small claims courts offer a quicker and lower-cost alternative.
That said, legal proceedings can become expensive and may lead to financial strain, especially if you lose and are required to pay the opposing party’s legal costs. For example, in July 2024, a vehicle owner shared how a rear-end collision dispute escalated to legal proceedings, resulting in costs that far exceeded the original repair amount.
If you’re considering court action, seek legal advice early. Many solicitors offer initial consultations to evaluate your case’s strength and estimate potential costs. They can help you decide if your dispute has enough merit to justify the time, expense, and stress of going to court.
Most legal professionals recommend exhausting all alternative dispute resolution options, like AFCA, before pursuing legal action. Since AFCA provides a free, expert review, it often resolves disputes without the need for costly legal proceedings, making it the preferred route for many repair cost disagreements.
Getting a Car While Your Dispute is Ongoing
Dealing with a dispute over repair costs with your insurer can be a lengthy process, sometimes dragging on for weeks or even months. But while you’re waiting for a resolution, staying mobile is essential. Knowing your rights and how to secure a replacement vehicle can help you maintain your daily routine without unnecessary stress. Here’s what you need to know.
Your Right to a Replacement Car
If your car is out of action during repairs or assessment, you have the right to a comparable replacement vehicle. This entitlement is grounded in Australian common-law principles, which require the at-fault party’s insurer to cover reasonable costs.
To claim this right, you need to show that having a replacement car is necessary and reasonable. This usually means using the vehicle for essential activities like commuting to work, taking the kids to school, or attending medical appointments. The replacement car must be similar in class to your own, and you’re entitled to use it for the entire period your vehicle is unavailable.
To strengthen your claim, keep thorough records. Document your daily mileage and note the reasons you need the car each day. For example, log work hours, school drop-offs, or medical visits. This evidence shows that the replacement car is a necessity, not just a convenience.
Even if there’s a dispute over repair costs, the at-fault party’s insurer is still responsible for covering the reasonable costs of your replacement vehicle. They are obligated to provide or pay for the car until your own vehicle is repaired and returned to you.
If you’re making a comprehensive insurance claim and your insurer has agreed to handle the repairs, they are responsible for arranging and covering reasonable hire car costs. This is outlined under the General Insurance Code of Practice and applies even if disagreements over repair costs arise.
For clarity, request written confirmation of repair timelines from your repairer and share these updates with both the hire company and insurer. This ensures transparency and helps justify how long you need the replacement car, avoiding unnecessary disputes over the duration.
If you want a straightforward way to access your replacement car, Not My Fault offers a hassle-free solution.
How Not My Fault Can Help
Not My Fault takes the stress out of securing a replacement car while you’re dealing with repair disputes – all at no cost to you.
They deliver a like-for-like replacement vehicle directly to your chosen location, whether it’s your home, the crash site, or your repairer’s workshop. Best of all, they handle all the communication with the at-fault party’s insurer, billing them directly. This means no time wasted on rental logistics or paperwork, and no upfront payments or reimbursements to chase later.
This service is particularly helpful during repair disputes. It eliminates the hassle of coordinating between insurers, repairers, and hire companies while you’re already navigating a complex situation. Their team ensures you have consistent transport, even if your dispute drags on for weeks or months, including cases that escalate to the Australian Financial Complaints Authority (AFCA).
Speed is a major advantage. Not My Fault often delivers replacement cars on the same day, so you can get back to your routine without delay, even if there’s uncertainty about repair timelines.
Using this service not only keeps you mobile but also shows insurers that you’re taking reasonable steps to minimise your losses while pursuing fair repair costs. Having professionals manage your replacement car needs can even strengthen your overall position in the dispute process.
Conclusion: Main Points to Remember
When dealing with repair cost disputes, the key is to approach the process methodically. Start by documenting everything from the outset – take clear photos of the damage, collect repair quotes, and save all communication with your insurer. Getting an independent assessment from a qualified repairer can often uncover differences in the insurer’s evaluation, giving you stronger grounds to challenge their findings.
Always begin with your insurer’s internal dispute resolution process before seeking external help. This initial step is mandatory and can often resolve the issue without further escalation. If you’re still not satisfied, you can take your case to the Australian Financial Complaints Authority (AFCA), which provides a free service for handling disputes. For more complex situations, seeking legal advice may be a good idea. Keep in mind, your rights cover more than just repair costs.
One important right to remember is your entitlement to a like-for-like replacement vehicle while your car is being repaired or during dispute resolution. Australian law generally requires the at-fault party’s insurer to cover the cost of keeping you mobile. Services like Not My Fault Car Hire simplify this process by managing the paperwork and billing directly with the at-fault insurer. This ensures you maintain access to transport while also strengthening your case with thorough documentation.
By following a structured process – complete with detailed records like photos and independent quotes – you’ll not only support your claim for repair costs but also reinforce your right to a replacement vehicle. Solid evidence helps counter any attempts by insurers to minimise payouts and ensures you receive what you’re entitled to.
Stay persistent and professional throughout the process. With strong evidence and a clear understanding of your rights, most repair cost disputes can be resolved fairly, helping you secure the compensation you deserve and keeping you on the road while the issue is resolved.
FAQs
What can I do if my insurer won’t cover hidden damages in their repair cost assessment?
If your insurer refuses to acknowledge hidden damages in their repair cost assessment, start by asking for a detailed, itemised breakdown of the costs and any evidence they’ve relied on to support their decision. This might include structural investigations or expert assessments.
Should the insurer continue to deny the claim, gather your own proof that links the damages to the accident. This could be through repairer reports, photographs, or other documentation. If the matter remains unresolved, you can escalate it by lodging a complaint with the Australian Financial Complaints Authority (AFCA). In more complex cases, seeking legal advice can help protect your rights.
For extra peace of mind during the assessment or repair process, you might want to consider Not My Fault. They can arrange a like-for-like replacement vehicle at no cost, keeping you on the road without added stress.
How can I make sure the parts used in my car repairs are genuine and high-quality?
To make sure the parts used in your car repairs are genuine and reliable, look for authenticity markers like labels, holograms, serial numbers, or QR codes. These features are typically added by manufacturers to confirm the parts are legitimate.
It’s also wise to choose trusted, industry-certified repairers or suppliers who are known for sourcing genuine parts. Don’t hesitate to ask your repairer for documentation or confirmation about the origin of the parts they’re using. If you still have doubts, you can always reach out to the manufacturer directly to verify the part’s authenticity.
Using genuine, high-quality parts is crucial for your car’s safety and performance. Plus, it can help preserve its resale value. If you’re unsure or concerned, ask questions or request proof – your peace of mind is worth it.
What can I do if I still disagree with my insurer about repair costs after their internal review?
If you’re unable to settle the repair cost dispute with your insurer through their internal review process, there are other avenues you can take.
One option is to file a complaint with the Australian Financial Complaints Authority (AFCA). This independent organisation handles disputes and has the authority to make binding decisions. Alternatively, consulting a lawyer who specialises in insurance law can provide clarity on your rights and help you explore further legal steps.
It’s important to stay organised and back up your case with clear evidence, like repair quotes and expert assessments. This can make a big difference as you navigate the process.
