The major insurance companies specify which materials and parts
should be used in the repair of their policy holder’s car. Negotiations on price and
volume discounts are conducted directly by insurers with paint manufacturers, OEMs
and alternative parts suppliers. These market-based exchanges specify the prices that
crash repair centres will be charged and therefore allow the insurer to control, in part, the
costs of materials. For crash repair centers operating under a captive governance structure
this mean that they cannot order any materials or commence any work before authorization
from the insurance engineer. Crash repair centers under a modular approach can order
material and commence work without authorization.