FAWOAM president Simon Too Peng Huat in a press conference today, claimed that insurance companies have coerced loss adjusters into reducing vehicle repair estimates by imposing the Key Performance Index (KPI) system.
He said that the move not only results in losses to workshop owners, but forces them to use non-original and even second hand parts.
It's vice president Cho Chee Seng explained that loss adjusters frequently disregard the price estimation and parts recommendation of workshops.
"For example, to fix a head lamp, an original part would cost RM100. In the interest of KPI, the price adjusters would not only pay us less, but also make us use parts that are not from the original equipment manufacturer. This could cause more damage and endanger all road users," said Cho.
"They would also impose an unrealistic timeframe, costing us labour fees, and the consumer good workmanship," he added.
Cho said that the prices and the time frame imposed by the insurance companies through their loss adjusters also conflicts with the industry central database.
He further claims that insurance companies are more lenient towards franchise workshops by granting them extra fees and claims.
"Loss adjusters also deduct 'scrap' from our charges saying we could sell the metal and get more profit.
"As workshop owners we do the best we can, but these constraints affect the quality of our work and gives us a bad reputation," said Cho.
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