The 1,500 days war. Who’s right, the garages or the insurance companies?

DISPUTE The vehicle repair shops complain the insurance companies don’t cover the damages and that the competent authorities take part with them, while the insurers accuse the garages of unfair competition and some drivers of intentionally crashing their cars for money

On plenty occasions the Romanian car owners are unsatisfied by the way the insurance companies pay the bills for vehicle repairs. They usually file in complaints at the Financial Supervisory Authority (ASF). The garage managers also complain that such demands are not rapidly and efficiently solved. They say this attitude causes them tremendous losses. More than that, they say the insurers are encouraged to keep their bad habits.

ASF seems to want to make a difference and recently drew a draft that aims to speed up procedures in such disputes. According to this document, in cases when the incident needs a more detailed investigation, the deadline can be expanded by only 5 days and not by 7 days as it was until now.

The ASF’s intercession

The new measure also calls upon insurers to send to the Authority, in ten days or until a clearly specified deadline, various documents regarding the disputed cases. The insurance companies will also have to report quarterly the status of the complaints they received.

The insurance companies will also have to fulfil some conditions regarding their own websites. These will have to display information about the number of solved and unsolved complaints.

But the vehicle repairers were not extremely excited by the initiative. Cristian Muntean, the President of the Independent Garages Association (ASSAI), noticed that according to the draft the window that will contain the link to the above mentioned information “will remain active for five seconds and the user won’t be able to close it”.

A 70,000 EUR fine

As he believes that five seconds is not enough, Muntean described ASF as “a narcissistic institution, concerned about its image”. He also pointed out the draft doesn’t include clear sanctions and doesn’t really disturb the insurance companies with a high number of unsolved complaints. ASSAI replied to the ASF’s initiative and proposed a set of 12 measures meant to fight the insurers’ abusive practices.

The ASSAI’s proposal provides as sanctions fines up to 70,000 EUR and even suspending the licence for 30 days. The garages also wish that the ASF and insurance companies’ websites are made more accessible for users, but also ask for stricter deadlines for the companies to answer the complaints they received.

The history of an old conflict

The war between the garages and the insurers is not new. In 2010 the Romanian Insurance and Reinsurance Companies National Association (UNSAR) accused ASSAI that activates like a cartel, using unfair competition methods in order to overprice their services. UNSAR also said ASSAI had a much lower number of members than it claimed. The insurers pointed out ASSAI only included several dozens of garages, representing about 5% of a market with thousands of companies, and was not having 400 members representing over 60% of the vehicle repair sector as it stated.

ASSAI answered back by complaining at the Insurance Supervisory Commission (nowadays included in ASF) about the insurers that allegedly put pressure upon the garages to drop the prices. The garages also asked the Competition Council to investigate them in order to prove they don’t use unfair practices.

Fake crashes

The insurance companies also consider some of their clients are not honest. During a specialised seminary that took place earlier this year, the UNSAR representatives announced they intend to create a common database containing the history of all vehicles that have or had a comprehensive insurance. This might help track down those who deliberately crash their cars in order to get some money. The Association’s officials offered as example the case of a policeman who received compensations from five different companies during a six-week period.

Car insurances – no. 1

The car insurance related complaints are the most numerous complaints submitted to ASF. In the first quarter of 2014, 69% of the 2,841 complaints received were concerning third party and Green Card insurances and over 22% were concerning comprehensive car insurances. Only 6% of the registered demands were about other types of insurances.

In the first quarter of this year, ASF received 4,692 complaints, of which 3,128 were registered, analysed and solved. Out of them, 2,841 were submitted by insured people/injured people, while 287 complaints came from the garages.