NRMA Insurance has bitten the bullet and will reinstate free customer choice in its web-based smash repair system.

The company has faced intense pressure from customers, the Federal and NSW Governments and smash repairers themselves since it introduced the controversial system a few years ago. It’s also understood to have lost thousands of renewals to arch-rival AAMI.

The repairers accused NRMA Insurance of placing customer safety at risk in a quest to find the lowest cost repairer for every claim.

The “Care & Repair” system, in which smash repairers bid online for previously assessed repair jobs, will remain in place. But customers will no longer be charged an extra premium for using a repairer of their choice.

CEO David Issa says the company is always open to feedback from its customers and stakeholders.

“We are a customer-focused company, and if this change addresses customer concerns around choice of repairer then it is a worthwhile endeavour.”

Despite this, he expects the majority of repairs will be handled in the same way.

“From the customer’s perspective, ‘Care & Repair’ will continue to deliver a positive customer experience, regardless of whether the customer has nominated a repairer.

“Historically, 96 to 97% of NRMA Insurance customers elect to use our repairer network.”

NSW Fair Trading Minister Diane Beamer has welcomed the change but warns the dispute between NRMA Insurance and the Motor Traders Association would continue.

Hailing the NRMA Insurance move as a step in the right direction, she said “areas of greatest concern to me have been the operation and consistency of the web-based repair management system, consumer choice of repairer and elements of the contract offered to repairers, specifically the penalty provisions”.

Pending approval from regulators, the changes are expected to be in place by May 1. Customers who took out the more expensive “choice of repairer” policy option will be issued with a refund.