On the way to change: Transportation Minister Miri Regev decided to adopt the recommendations of the advisory committee to complete the secondary legislation and regulations that will regulate the vehicle appraisal market.
This market has suffered for many years from a lack of competition, and serves mainly the interests of insurance companies, appraisers and garages - but not the interest of the consumer. Israel Hayom has learned that Transportation Minister Regev has decided to adopt the committee's recommendations submitted to her, the main one being setting in the appraisers' regulations a "market price" for transportation products, so that the appraiser will indicate in the assessment a price that reflects, as much as possible, the actual price and not the list price.
In the current situation, the appraiser specifies in the assessment the price of transportation products and spare parts required to repair the vehicle, based on the price that appears in the consumer price list of the parts importer. In practice, and as is customary in many fields, garages and insurance companies enjoy significant discounts on the list price, depending on the scope of their activity and other factors.
Miri Regev // Photo: Dudi Vaknin // Miri Regev,
These discounts can reach up to 40% of the list price. These gaps increase repair costs in the garage, and thus also increase the insurance premiums paid by all car owners in Israel.
In the current situation, there are complex relationships and significant information gaps between policyholders, garages, appraisers and insurance companies. The insured, the owner of the vehicle, is not well versed in vehicle maintenance requirements and insurance conditions. This situation, of information asymmetry between policyholders and other market players, requires a regulatory process from a systemic perspective, which provides a solution to gaps and barriers, as a comprehensive package that sees first and foremost the best interests of the insured, while maintaining vehicle safety.
Specify the market price
The main recommendation of the Council, which includes representatives of the Ministry of Transport, appraisers, consumer associations, the police and the Commissioner of the Capital Market, is to cancel the directive according to which the appraiser must specify the list price of the spare parts. From now on, the appraiser must specify the market price, which weighs discounts and represents the real cost of the parts paid by the garage or insurance company, according to which he charges the customer himself or the insurance company.
The Advisory Council on Car Appraisers discussed the issue of vehicle appraisal, which is included in the Licensing of Services and Professions Regulations in the automotive industry, and decided to recommend that the Minister of Transport and Road Safety set a "market price" for transportation products in the Appraisers' Regulations, so that the appraiser will indicate in the assessment a price that reflects, as much as possible, the actual price.
Step line
In addition, the Committee recommended a series of additional measures to be published in the Capital Market Authority's circular, aimed at increasing competition in the industry. Among the measures recommended by the committee: expanding the list of settlement garages, so that consumers will enjoy more freedom of choice and will not be tied to a limited number of garages; reducing the large gap that exists today in the amount of the deductible required of the policyholder who chooses to carry out the repair in a settlement garage or in a garage that is not under arrangement; and eliminating appraisers' lists, and giving more freedom in choosing an appraiser.
Everything is on its way to change Photo: Joshua Yosef //,
Today, when handling a settlement garage, the appraiser is usually appointed by the insurance company, and in a garage that is not under arrangement - usually on the recommendation of the garage. Without doubting the integrity and professionalism of appraisers, it is clear that it is better for the insured that the appraiser be chosen by him and represent his interests as a consumer.
The mechanism proposed by the committee includes the selection of a random appraiser from the Ministry of Transport's database of authorized appraisers, or alternatively, the selection of an appraiser privately by the insured himself.
The outline that was formulated will soon be published for public comment by the Ministry of Transport and the Capital Market Authority. After that, the ministry will act as soon as possible to make regulations.
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