VACC Rejects Proposed Motor Vehicle Insurance Code as “Not Fit for Purpose”

Monday, 23 June 2025

Victorian Automotive Chamber of Commerce calls for fundamental reform to address power imbalances in the insurance repair industry.

Melbourne - Today, the Victorian Automotive Chamber of Commerce (VACC) submitted a comprehensive response to the draft 2025 Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct, unequivocally rejecting the proposed code as “not fit for purpose.”

In its submission, the VACC states that the draft code fails to address the power imbalances between insurers and repairers, disregards the professional expertise of automotive repair specialists, and lacks the structural reform required to ensure the integrity and viability of a truly self-regulating industry.

“We do not support the current draft code,” said VACC CEO Peter Jones. “Rather than creating a fair and balanced regulatory framework, this draft threatens to entrench the existing power imbalances that have plagued our industry for decades.”

The submission, informed by extensive feedback from VACC members across Victoria and Tasmania through written submissions and  industry forums, identifies several critical failings in the proposed code. The draft code grants insurers excessive control over repair methodologies, parts selection, and pricing structures while marginalising the professional expertise of qualified repairers. Particularly concerning are provisions such as Clause 6.2(c), which grants repairers “permission” to include essential costs like paint, parts, and mandatory environmental levies, highlighting shifts in authority that legitimise insurer overreach.

The VACC commissioned The Hon. Michael Whitten KC, one of Australia’s pre-eminent barristers, to examine the draft Code. His analysis identified significant technical drafting issues and highlighted how the draft Code reflects a bias towards insurers whilst failing to support fair market conditions. Mr Daniel Clough, an experienced competition law barrister, prepared the submission in consultation with  VACC members, ensuring it is both legally sound and grounded in practical industry realities.

“The depth of concern expressed by our members during this consultation process has been extraordinary,” said Mr Jones.

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 “From small family-owned workshops to larger repair operations, the message has been consistent – this draft Code does not address the fundamental issues facing our industry.” The consultation incorporated written submissions from members, feedback from industry forums and member meetings, direct consultation with repair businesses of all sizes.

Specifically, the Code Administration Committee (CAC) requires urgent reform to be more representative, transparent, and accountable to all stakeholders, including consumers. The VACC calls the CAC to be restructured to include independent members, end-user advocates, and technical experts. The draft Code also fails to adequately regulate the use of artificial intelligence in assessments , potentially creating unfair advantages for well-resourced insurers.

The motor vehicle insurance and repair industry has long been recognised as suffering from structural power imbalances. The 2005 Productivity Commission identified that major insurers wield strong negotiating power with generally much smaller repairers. This situation has only intensified with increased market concentration and technological complexity.

“Repairers are highly skilled professionals whose work underpins both road safety and consumer confidence,” Mr Jones said. “They are best placed to prepare repair estimates that reflect proper work methods and parts required to return vehicles to manufacturer standards..”

The VACC is advocating for substantial reforms, including mandatory payment for repair estimates requested by insurers, reciprocal timeframes requiring insurers to accept or reject estimates within five business days, fair dispute resolution processes with appropriate cost allocation, and robust warranty arrangements that don’t unfairly burden repairers.

The VACC will continue to engage constructively in the consultation process, working toward a regulatory framework that genuinely respects the role and expertise of repairers, addresses structural power imbalances, and delivers fair and sustainable outcomes for the industry and the consumers it serves. The organisation remains committed to supporting a fair, sustainable, and technologically progressive motor vehicle insurance and repair industry guided by principles of professionalism, integrity, and equity.

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Media contacts

Andrew Molloy

Manager Marketing, Media, Communications & Publications

P. 03 9829 1248    |    M. 0457 188 375    |  E.  [email protected]    |  W.  vacc.com.au 

About VACC

Founded in 1918, the Victorian Automotive Chamber of Commerce (VACC) represents over 5000 businesses in Victoria and Tasmania who employ more than 50,000 people. Member businesses range from new and used vehicle dealers, repairers, vehicle servicing, parts and component wholesale/retail and distribution and aftermarket manufacture, tyre dealers and automotive dismantlers and recyclers.

VACC develops the future workforce, employing 560 apprentices and trainees through its group apprenticeship scheme, and maintains memberships with the Motor Trades Association of Australia and Australian Chamber of Commerce and Industry and contributes to the national policy debate through these leading industry associations.

 

 

 

 

 

 

 

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