The clock is ticking for NRMA Insurance and the NSW Motor Traders Association (MTA). The State Government has urged the two groups to resolve differences over the insurer’s Care & Repair system. Without a clear and amicable resolution, it plans to introduce anti-steering laws that will force the issue.

“The insurance industry and the MTA need to come up with a model that protects consumer choice, gives repairers a fair go and provides insurers with value for money,” Premier Morris Iemma told Parliament. “If they do not fix the issue by negotiation, the Government will fix it through legislation.”

The two parties have been trying. Fair Trading Minister Diane Beamer hosted recent talks, and both parties yielded considerable ground. In addition to last month’s announcement that it would reinstate free “customer choice of repairer” options, NRMA Insurance has agreed that its web-based system will be used only for cases of superficial damage.

The sticking point centres on NRMA’s insistence that customers take their vehicle to a Care & Repair centre before engaging the repairer of choice. The MTA is concerned NRMA will find ways of persuading customers to leave their cars at the centre.

NRMA Insurance will reinstate customer choice of repairer from May 1 but will retain the bulk of its web-based system. Ms Beamer says she will review the new arrangements on July 1, giving the company and its parent IAG two months to ensure Care & Repair is equitable.

The insurer will have to show that it is a fair system for repairers and car owners. If it fails to convince the Fair Trading department, Ms Beamer will consider legislative solutions.

IAG has agreed to co-operate with the review and will even supply recordings of phone conversations between NRMA Insurance and customers.

The wider insurance industry is also hoping for a negotiated resolution, warning that anti-steering legislation will unnecessarily complicate claims. ICA Deputy CEO Dallas Booth says it “will force everyone with a damaged car to select their own repairer, when most car owners do not have the knowledge or desire to do so”.

“This is not just the insurance industry talking. The NSW Government has said that anti-steering could add $80 to an average repair bill.”