Understand where you stand

Taking out a mechanical breakdown insurance policy is a great way to assist a vehicle owner financially in the case of a mechanical failure on their motor vehicle.

But being reimbursed for repairs done to a vehicle can sometimes become a headache for vehicle owners and workshop managers alike.

So what’s the secret to a smooth and stress-free reimbursement from your mechanical breakdown insurance policy?

Les McMaster, chairman of the Motor Industry Workshop Association, says mechanical breakdown insurance is insurance against an actual mechanical breakdown of a listed covered component on a motor vehicle or truck.

These insurance products are not extended warranties. They cover a set amount of components to a maximum limit or threshold as stated in the policy.

“It is important to understand that finance providers and insurers have certain processes in place and it is key for consumers and repairers to understand these processes and adhere to them closely.

“If all is followed correctly, finance providers promise a six to eight working day turnaround reimbursements time from receipt of invoice,” he says.

But is following the process enough?

Warren Fryer, a dealer relationship manager at Motorite Administrators, says two of the most common reasons for delayed payments are; invoices that do not have all the basic details needed to process payments and repairers who post or hand deliver invoices to be paid, delaying the process.

Willem van Rensburg, audit manager at the Automotive for Innovation Group, agrees adding that vehicle owners and repairers often don’t submit the relevant documents and don’t request the reimbursement authorisation needed to ensure the process runs smoothly.

Fryer says some repairers insist that clients pay for the repair on their vehicle upfront and the administrator then has to reimburse the client directly.

“In my opinion this is not ideal as it defeats the object of these types of policies,” he says.

However, should a policy holder pay upfront for the repairs, van Rensburg says there is still a process that needs to be followed to ensure reimbursement.

“Customers can speed up this process by submitting correct, clear documents on time to the correct department. They also need to ensure that they have the authorisation from the claims department before submitting,” he says.

He advises repairers to always ask customers whether they are policyholders and to assist in requesting authorisation to ensure the reimbursement process is followed.

In the case where the repairer pays directly for the repairs, Fryer says the repairer needs the customer to clearly stipulate they have a Mechanical Breakdown Policy and what the policy number is.

“Vehicle owners should always ensure that they keep their mechanical breakdown warranty booklet in the car in case of a breakdown. Important numbers, including the administrator and roadside assistance, can be obtained from this booklet.”

Reimbursement processes are fairly similar for most insurers. Generally a policy holder would need to take their vehicle into an approved repair centre where the fault can be checked and a detailed quote provided.

They then need to contact the administrator of the policy via the contact details in the policy booklet.

The repairer should have the following information on hand when calling to lodge a claim on behalf of the policy holder:

•  Their repairer code.

•  Policy number of the covered vehicle.

•  Vehicle details.

•  Policy holder details.

•  Fault, cause and remedy of the failure.

•  Detailed quotation including costs split by parts and labour to complete the repair.

Once this information has all been verified the repairs can go ahead and an invoice can be e-mailed to the insurer in a PDF format so the repairer can be reimbursed.

“It’s important to understand that the amount on the claim needs to be the same as that on the original invoice.”

In some cases the repair may be slightly different from what was quoted initially. In this case the repairer needs to call the administrator to update their order number with the changes. This prevents any short payments when the invoice is submitted.

“By ensuring repairers are educated on how the reimbursement process works, we hope to give them peace of mind in terms of being fully reimbursed and speeding up the reimbursement process,” Fryer says.