A Suncorp customer who insisted his vandalised car be sent to a repairer quoting more than $16,000 – almost twice that estimated by the insurer’s repairer – has lost a claim dispute.

Suncorp accepted the man’s claim in June last year, offering to authorise repairs to the car via its nominated repairer or to cash settle him for the amount the repairs would cost.

The motor policy provided the car owner an option to choose a preferred repairer, subject to certain terms and conditions.

The matter became a dispute before the Australian Financial Complaints Authority (AFCA) as the man and Suncorp differed over the fair amount to pay to repair the insured vehicle.

The car owner had obtained a quote for $16,449 and requested to exercise his ‘choice of repairer’ benefit. He argued there was no evidence to show that quote was not reasonable and that Suncorp’s insistence on a lower rate was a breach of utmost good faith.

Suncorp’s internal review of the man’s quote adjusted it to $8305.

The insurer attempted to negotiate with the man’s chosen repairer who refused to lower the quote, which Suncorp considered unreasonable.

It obtained a second quote from a different authorised repairer. That business initially provided a quote for $14,421 but later agreed to repair the insured vehicle for $8,656 – Suncorp’s assessment of what it should cost.

“The complainant says this rate is too low and not reasonable, but the fact that (the repairer) is willing to do the work for the adjusted rate says this is not the case,” AFCA said.

Suncorp offered to authorise repairs through this nominated repairer or to cash settle the amount these repairs would cost.

The man went to AFCA, saying Suncorp should authorise his chosen repairer instead of relying on its own quote and trying to impose an “unreasonable” labour rate to do the repair work.

AFCA said Suncorp complied with the terms of its policy.

“It will permit the complainant the option to use his nominated repairer. It simply will not pay more than what its repairer says it will cost to do the work,” AFCA said.

“There is no evidence Suncorp’s quote is insufficient or not viable. Suncorp says this repairer is prepared to do the work and will provide a lifetime guarantee on the quality of the work.”

The Suncorp policy stated the insurer would “authorise the repairs if we agree your repairer’s quote is reasonable” or “pay you what it would have cost us to repair your car … determined by a quote from a repairer we choose”.

It said the work must be done in a “cost effective manner”.

AFCA said the man was free to choose his own repairer but Suncorp was not obliged to pay more than what its preferred repairer – which was willing to repair and warrant the vehicle for a significantly lesser, more competitive rate - quoted.

Suncorp’s repairer was willing to do the work to industry standard at a reduced price and the car owner’s repairer was at liberty to match this offer if it chose, AFCA said.

“This is the essence of competitive quoting,” AFCA said. “There is no evidence Suncorp’s position is unfair or unreasonable.”

“Whilst I acknowledge Suncorp may benefit from a favourably negotiated labour rate with any repairer it has a relationship with, this does not invalidate the quote,” AFCA’s ombudsman said. “I consider the arrangement is fair.”

See the full ruling here.