Why Should Insurance Companies Decide the Price?
The strong push to control pricing really began in earnest when the 1980s arrived. At that time, automotive refinishing (car painting) became the target of the insurance industry’s loss adjusters. A price list was issued to all workshops that was expected to be followed. We cannot rule out that this was a clever way to secure purchasing power in the market. The workshop that signed the agreement was naturally supplied with paint jobs, paid according to the price list determined by the insurance industry as the “correct” price.
Opinion and historical recollections by Franch Hagerup. Technical and legal claims clarified editorially.
This concerns painting, glass replacement, and repairs to bodywork/frame and related components.
Over time, these so-called “yellow lists,” as they were called, became a major problem for many workshops that had previously calculated their own prices. At that time, Norges Bilbransjeforbund (the Norwegian Automobile Industry Association) truly took hold of the issue and focused 100% on getting these yellow price lists where they belonged — far away on the scrap heap. In other words, it became a standoff between the insurance companies and Norges Bilbransjeforbund.
In those days, there was an annual automotive refinishing seminar (very different from those held today). It took place at a reputable large hotel, where valuable and necessary information was provided to car painters by specialists within the trade. Paint importers were also regular participants and believed that the way these seminars were conducted had a significant impact on health, independent pricing, and professional execution of the craft.
Isocyanate exposure is a serious occupational-health issue in refinishing. Arbeidstilsynet describes risks including irritation, sensitisation and asthma. The claim that many painters died before 60 specifically because of isocyanates was not supported by mortality data and has been removed.
It costs a great deal of money to build or upgrade a workshop, but the insurance industry did not appear to concern itself with this reality.
Isocyanates are used in coatings, adhesives and polyurethane products. Curing chemistry varies with the product; automotive coatings should not all be described as curing through moisture in the air. Product documentation and safety data sheets must guide handling and protection.
Exposure controls, ventilation, suitable protective equipment and training are essential. Risk depends on the substance, exposure and task; it is misleading to say all isocyanates are equally hazardous or that every short exposure causes permanent damage.
I remember the 1980s as a period of major efforts to improve working conditions in the automotive trades, with NBF playing an important role. Workshops faced substantial investment needs.
Let us put it this way:
In my account of this period, teaching materials, training facilities, new spray booths and mixing rooms were important parts of raising standards. My work through NBF forms part of that recollection. Claims that a particular textbook or school was Norway’s first have not been independently established here.
Unfortunately, it did not seem that insurance companies at the time — and in the years that followed — considered these investments serious enough to understand that refinishing workshops needed to calculate their own prices, just like any other business selling goods and services to customers.
But no. It was the insurance companies that were to set the price, not the owner of the workshop performing the work. This was serious.
I recall disputes over vehicles being sent to workshops in Sweden or Finland, and over whether the agreed prices reflected the cost of the work. These are my recollections of past conflicts, not evidence that every insurer follows the same practice today.
This led to significant backlash when many car owners refused to allow the insurance company to move their vehicle to workshops other than the one they themselves had chosen.
In principle, it is not the insurance company that should determine the workshop’s price.
My criticism is that insurers’ purchasing power can make workshops feel they have little room to negotiate. This is different from saying workshops have legally lost the right to set prices. Commercial agreements, repair contracts and insurance terms must be distinguished.
The automotive industry — and especially NBF today — can thank itself for allowing this to happen.
The Next Phase of This Price Domination
Next came collision repair.
I believe the repair trade has not resisted pricing pressure strongly enough. NBF’s guidance nevertheless describes prices and conditions as matters to address in agreements with insurers; it does not establish a blanket prohibition on workshops setting their own rates.
Why does the industry not resist? Has anyone actually calculated the true cost of performing insurance-controlled repairs?
Glass repair raises similar questions about insurer networks and commercial conditions. Approval for an insurer’s network is not the same thing as public authorization to operate a workshop. My criticism concerns bargaining power and the prices workshops receive.
What could be next? Shall we predict that insurance companies will begin interfering in the tyre industry — determining prices for mounting, balancing, and tyre storage?
I want NBF to make workshop profitability and independent cost calculations a stronger priority, drawing on the commitment I remember from earlier industry leaders.
It has not gone quite that far — but it is reasonable to remind the industry of this unhealthy history. It is never too late to return pricing authority to where it belongs: with the workshops performing the work.
More From the Insurance Industry
The manuscript refers to an older letter from If about glass repairs. That letter has not been supplied and independently checked, so it cannot support a general claim that If prohibited workshops from carrying out such work.
NBF’s published guidance distinguishes the customer’s repair agreement from the insurance relationship and discusses insurers’ workshop arrangements. The actual contracts and circumstances matter. This article does not establish that a named company’s conduct was unlawful.
I maintain my position: the workshop performing the work should have a real opportunity to negotiate prices that cover its costs. I do not have a basis here to speak on behalf of Riis or Hurtigruta Carglass about their satisfaction with insurer pricing.
What Might Come Next
Small, highly skilled dent and refinishing specialists — those who repair minor body damage that larger collision centers would replace with expensive new parts — may be the next target.
I worry that small specialist workshops could face the same pricing pressure. Their methods can offer alternatives to replacing parts, but the appropriate method and total cost depend on the vehicle and damage.
For the record, we should commend NBF’s lawyers. There has been legal expertise present over the years.
What we want is an NBF that steps forward and fights insurance companies so that the right to set independent prices is restored to the workshops of the Norwegian automotive industry.
We know that NBF is capable of this — even if much of the knowledge from earlier times may have faded.
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