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Insurance Article

Automakers Forced by Insurers to Bring Down Repair Costs

April 25 2016

General insurers after bargaining with hospitals for reducing charges, turned their back towards the auto industry. It is known that the general insurance sector pays for most of the repairs hence they turned towards the auto industry to bring down the cost of repairs. Surprisingly, the auto companies reverted positively and accepted the cut off in repair costs.

The recent times it has been noticed that companies negotiate with the auto companies manufacturers. Apart from sharing of claims data with various insurance companies, they are also the ones recommending changes in the processes, which may include anti-theft devices to dent removing equipment. In all this hustle and bustle, it has been a big task to include big companies like Maruti and Honda into the plan for supplying parts to bring down the cost drastically.

For example: If a headlight was damaged, the assembly had to be replace which was quite an expensive deal. Hence, it became important to remind the auto companies to tell, that if they did not supply child parts the cost of the repair would rise because the premium of the same could increase. However, now in case of a dent in a four-year old car, the owner has to bear half the cost due to depreciation. In addition, if the dealer had high-tech dent equipment, repairs on the same could be made at a fraction of the cost.

To make auto manufacturers aware, many private companies are now using the data and encouraging the manufacturers to introduce child parts to bring down the costs. In fact, there have been constant attempts to standardise the cost of parts and labour.

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