The Motor Trades Association of Australia (MTAA) has lodged its submission to the Australian Financial Complaints Authority (AFCA) consultation on its General Insurance Claims Handling Approach.

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MTAA represents thousands of automotive businesses across the country, including repairers who are directly engaged in the claims process. These businesses see first-hand the impacts of poor insurer practices on both consumers and industry.

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Repairers are not parties to the AFCA process, but they are often the only voice consumers have in navigating complex insurance and repair disputes. While AFCA regulates the relationship between consumers and insurers, repairers regularly witness situations where consumer preferences are ignored, expert repair advice is sidelined, and even AFCA rulings are disregarded.

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The issues we’re raising

Through case studies from our state and territory associations, MTAA highlighted recurring problems that undermine trust in the insurance system, including:

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• Consumers being punished for exercising their right to choose a repairer
• Substandard insurer-driven repair authorisations
• Long delays used as a coercive tactic
• Misleading “comprehensive” cover that leaves consumers with out-of-pocket costs
• A lack of transparency, with insurers denying access to critical assessment reports

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One case example involved a consumer who paid extra for choice of repairer. After the vehicle was properly repaired and assessed as fit for return to the road, the insurer internally altered its own report to force a “total loss” outcome, and then notified VicRoads to deregister the vehicle without valid cause. The consumer was unfairly penalised despite following due process.

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What we’re recommending

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MTAA’s submission calls for AFCA to:

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1. Require transparent, evidence-based decision making by insurers
2. Place greater weight on independent technical advice, not just insurer claims
3. Treat recurring poor behaviour, such as coercion and delays, as systemic issues
4. Support reforms to the Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct to ensure insurers are accountable

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These measures would help restore balance to a system that too often prioritises profit over fairness, transparency, and efficiency.

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Why it matters

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Consumers deserve repairs that restore their vehicles to safe, pre-accident condition, not cost-cutting that leaves them at risk. Repairers play a vital role in giving consumers a voice, but without stronger standards, both consumers and small businesses are left disadvantaged.

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By adopting a more robust, evidence-based, and consumer-focused approach, AFCA has the opportunity to lift industry practices, reduce systemic disputes, and restore trust in Australia’s insurance sector.

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👉 Read MTAA’s full submission here.

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