Car insurance costs rise as bodyshop capacity becomes “critical”

A decline in accident repair centres is causing insurance-related repair costs to rise significantly.

In a new report, Trend Tracker reveals that since 2013 the cost of repairing an accident damaged car has risen by 33.5%.

The number of repair centres has fallen by 20% in the last decade, to 3,162.

“With the number of bodyshops continuing to decline, it appears imperative that insurance companies and claims solutions providers adopt a strategy to truly work with their supply chain to secure repair capacity over the forthcoming years.

“It’s inevitable that repair costs will continue to rise but we believe that insurers need to act responsibly and focus their attention more on securing quality repair capacity for the safe repair of a vehicle and to provide the customer service aspects of a motor claim,” said Mark Bull, director of Trend Tracker Ltd and Auto Body Projects Ltd.

Trend Tracker predicts that insurance-related repair costs will increase by a further 14% of the next five years.

Bull added: “Such above-inflationary repair cost pressures cannot continue at current rates, despite parts pricing and paint price increases, as accident damaged cars may become subject to becoming economic write-offs if the repair cost becomes too great.”

The cost of parts alone on insurance-related repairs has risen by 40% in the past five year period, which presents a concern for motor insurers.

New technologies in vehicle design, including Advanced Driver-Assistance Systems (ADAS), have had a bearing on driving up repair costs as they require technical repairs to be completed by highly competent staff and to be calibrated following an accident.

“It’s critical for insurers to work with their body repair partners as it’s in everybody’s interest for bodyshops to attract and retain high calibre staff, ensuring that an insurer’s customer gets a safe repair,” Bull concluded.