Channel 4’s influential documentary series Dispatches has highlighted many of the dubious practices currently taking place in the UK car insurance and repair sector. Using a real life accident scenario and talking to many industry insiders the programme showed what most in the industry already know – Insurance companies main concerns are profits, not customers service and quality repairs.

In the first section of the show reporter Harry Wallop had an accident professionally staged so that he could experience first hand the type of practices and pressure adopted by insurance companies when it comes to repairer choice. After the “accident” in a VW Polo, a quote for repairs was obtained from a VW dealer. The insurer of the vehicle was then contacted and the programme showed the pressure tactics adopted by insurers to “steer” the customer in the direction of their approved repair network. Motor Industry Lawyer Andrew Moody and Malcolm Tagg of the of the UK repairer body the VBRA explained how this steering practice was now the norm in the industry, with questionable tactics used sometimes in contravention of consumer rights.

The programme then went on to show how insurance engineers put pressure on repairers to minimise costs, often to the detriment of repair quality and in some instance even compromising the safety of the vehicle. It also highlighted the concerns car manufacturers have about this “lowest cost” repair policy.

In contrast in the second part of the programme it was demonstrated how insurers and accident management companies seek to maximise costs in the case of non fault repairs where a they are not picking up the bill. It was also shown how the insurers had created a complex system of exclusive contracts and rebates with paint suppliers, distributors and parts manufacturers in order to boost there profits, by millions of pounds without passing on the benefits of these agreed discounts on to their customers.

The show concluded in no uncertain terms that at present the system is working to the benefit of insurance companies and their bottom line, is anti competitive and is certainly not always working to the benefit of motorists and their cars. The presenter explained how the industry was now under investigation by the Competition Commission and the Office of Fair Trading as it was estimated current practices had put up premiums by an unnecessary £225 million a year.

The VRA in Ireland says reports from the Irish market confirm that exactly the same practices are taking place here with insurers pressurising motorist over their repairer choice and consumers generally unaware of their rights. It aims to highlight this issue in 2013.

To view the Dispatches programme on the 4OD website please click here.
(Please note this video is avaible until Febuary3rd.)