The editor in chief of Za Rulem, the oldest and most respected automobile publication in Russia, attended a gathering with PCA representatives in the public chamber and returned with somewhat troubling news for readers and industry observers alike.
unscrupulous victim
Insurance providers are broadening their vocabulary and already use the term “bad faith victim,” a label that can apply to any motorist seeking reimbursements after an incident.
“What used to describe only scammers framed by so called car lawyers now also targets diligent policyholders who simply push for insurance company fulfillment of their duties and fair payments after a crash, whether for OSAGO or for comprehensive coverage,” writes Kadakov on his Telegram channel. It follows that anyone pursuing justice after a collision could be branded an unscrupulous victim by insurers.
Payments instead of repairs
Insurance firms are gradually leaning toward cash settlements for victims, shrinking the number of vehicles sent for repair work.
“In today’s climate it is cheaper for them to avoid repairs, to skip service stations, and to sidestep a dissatisfied claimant. It is easier to hand over money, even though the amount rarely covers repair costs,” Kadakov notes.
Import replacement into OSAGO
Repair terms have become hard to pin down. Service stations struggle to source parts, especially branded components, so insurers push the idea of replacing with alternatives that include Chinese, Russian, and Indian parts instead of original equipment.
The cost gap for a Toyota Camry up to model year 2015 is striking:
- rear bumper, Japanese and paintable — 40,513 rubles;
- rear bumper, Chinese and paintable — 12,298 rubles;
- left front wing, Japanese and marked — 35,513 rubles;
- left front wing, Chinese — 8,856 rubles.
“The risk here is that these parts will be counted at the cheapest available analogue, which means far less than the true replacement value of the original item. In effect, depreciation will be applied and losses will be lower than the cost of the cheapest analogue,” Kadakov summarizes.
Repair of used spare parts
When original parts are unavailable, insurers may approve repairs using secondhand components.
Kadakov then raises a set of questions to challenge this approach:
- Who assesses the remaining life of a used part?
- Who prepares the part for installation, given that used parts often require cleaning or refinishing?
- From which vehicles should parts be drawn, new or older models?
- Who guarantees that these parts do not come from vehicles involved in serious accidents?
- How will service stations obtain these parts, through traditional channels or informal marketplaces, and who funds such procurement?
- How much could the use of used parts raise the risk of car theft during analysis or processing?
Representatives from the insurance community have prepared a formal roundtable resolution to implement these ideas at the government level. Kadakov reports receiving sharp, pointed feedback and notes that the final decision will depend on the Citizens’ Chamber resolution, which has been anticipated for some time. He promises to share the outcome once it is announced.