More than 50% of all total-loss vehicles are being incorrectly routed to bodyshops, according to Audatex, a claims estimate and management provider.
“This is significantly adding to the financial burden the motor insurance industry faces,” said managing director Paul Tucker.
Audatex says that for years motor insurance premiums have been subsidised from reserves, particularly those accumulated from household insurance.
The claims specialist believes the ‘reserve tank’ is now running on empty, while companies continue to face mounting cost pressures.
“Should repair capacity fall significantly, we will see extended lead times,” said Tucker.
“Where a vehicle is repaired rather than written off, claims expenses will escalate through the provision of courtesy cars.”