There are benefits to using your insurer’s chosen providers

When your property is damaged in an accident and your insurer elects to repair it, you may be referred to a service provider chosen by your insurer. Do you have to use this service provider? If you choose not to, are there risks to you? In the seventh art

No one likes being told they have to take their business to a particular merchant or service provider. Whether it’s your car that needs fixing or cellphone that needs replacing, you want to be able to choose the store or service provider – even if you understand that insurers have negotiated deals with certain service providers, and that servicelevel agreements are in place for the benefit of all parties concerned, including you, the policyholder.

Not all insurance companies insist on you using a service provider on their list – be it a plumber or a panel beater – but they strongly recommend that you do, because these providers have been carefully vetted by the insurer based on their competitive pricing and guaranteed workmanship.

Fanus Coetzee, the head of claims at Santam, says other criteria used to select service providers and suppliers include quality of service, compliance with certain regulations, geographical coverage and BEE status.

There are significant benefits to using your insurer’s preferred service provider, Coetzee says. “We contract with our chosen suppliers and service providers on quality and service, and this gives us formal recourse should things go wrong.”

The typical client has no idea about the workmanship and reputation of service providers, be it a panel beater or an auto electrician. You also need to take into account manufacturer approvals. The use of a non-approved repair shop could compromise your vehicle’s warranty.

Coetzee says insurers take on the responsibility of choosing qualified and reputable service providers to repair your car.

It’s also the insurer’s objective to keep insurance premiums affordable and sustainable, Coetzee says. “It is therefore important to manage the cost of claims. By utilising Santam’s procurement muscle, we can negotiate better deals than the individual policyholder,” he says.

Ernst Gouws, the chief executive of Outsurance, reiterates the point: “Given the amount of work we can allocate to them, we are able to negotiate favourable rates. This means we can keep premiums lower.”

YOUR CHOICE

You may use the supplier or service provider of your choice, Coetzee says. But if you do, you take full responsibility for the repair or replacement service and the quality of the product or workmanship.

Outsurance has the same policy. “The choice of service provider rests with us; we have established a selected panel of service providers whose work is guaranteed. You can elect to choose your own repairer. However, we cannot guarantee the quality of the workmanship,” the insurer’s website states.

“If a panel beater is on our panel, and they expect to receive future work from us, then it certainly gives us leverage to ensure that you, as our client, are happy with his workmanship. I would always take my car to my insurer’s service provider, because I know I can then complain to them and rely on them to assist if there is poor workmanship. If you take your car to your own panel beater, with whom we have no contractual relationship, then there is obviously no way we can commit to guarantees and satisfaction levels,” Gouws says.

Insurers such as Santam and Outsurance will also limit the settlement amount to the “best price” that it can obtain for the item or service.

Dennis Jooste, the Ombudsman for Short-term Insurance, says it’s prudent to use the service providers chosen by your insurer. “They have established these relationships for a good reason. It’s safer to use them,” he says.

That doesn’t mean that Jooste’s office doesn’t get complaints from consumers dissatisfied with their insurer’s service providers. “We often get complaints about sub-standard workmanship by an authorised service provider, but if we find that the work was in fact sub-standard, the insurer can force the service provider to fix it,” he says.

But can an insurer insist that you use its service provider?

It depends on your policy, Jooste says. “It could give your insurer the absolute right to prescribe the service provider,” he says. Read your policy document or call your insurer to find out.

In the general terms and conditions of your policy, or under the claims settlement section, it may state the following: “The insurer may decide to compensate the policyholder by repairing, replacing, paying cash or any combination of these.”

Gouws says a typical “combination” scenario is where your house was flooded and your insurer pays you cash to replace your sound equipment, but has your couch repaired by an elected service provider and your carpets replaced by an elected supplier.

Your policy might state that in the case where the insurer repairs or replaces any loss or damage, the insurer may use any supplier or repairer of its choice.

Coetzee says you can expect to find that your insurer has preferred service providers in the following fields of claims:

Motor body repair – this is the largest and most complex area of claims spend, Coetzee says.

Building and plumbing – property insurance is the secondbiggest category of claims for most insurers.

Glass – although not high in value, glass claims are high in volume, and there can be a big variance in the quality of glass available.

Jewellery – such high-value items are prone to theft.

Electronic goods – these items also tend to be high value and prone to theft.