Green Parts - learn about the controversy surrounding PZU S.A.'s policy and who is losing out on it
Powszechny Zakład Ubezpieczeń S.A. introduced the so-called Green Parts policy several years ago. This catchy-sounding name is dictated by an alleged concern for environmental protection. The policy is reflected in the loss adjustment processes, during which the insurance company makes a deduction in the compensation paid by the alleged market value of the damaged parts. If the injured party transfers ownership of these parts to PZU, the latter will surcharge the missing amount of compensation.
At first glance, the insurer’s adopted policy has a sensible rationale. In liquidation practice, it turns out to be nothing more than an attempt to clumsily save its own expenses, i.e. the policy benefits paid out.
Let’s start by assessing the veracity of PZU’s stated concern for the environment. It seems that the policy being pushed is in fact lip service. This is convinced by the fact that the insurer makes a deduction for the alleged value of damaged parts, in the event that these parts are not handed over to the insurer, and at the same time refuses to enforce the return of reconditionable parts, batteries and lubricants, oils and other operating fluids. This disposal, meanwhile, implies costs that in practice are never passed on to the insurance companies, and are done by car repair shops with a free title.
The General Insurance Company has found a way to save on damages, but a way that is imperfect because it is blanket. Nowhere does PZU indicate the rules for determining the value of damaged parts, which means it is free to decide whether to apply the Green Parts formula in a claim. At the same time, the injured party can never be sure whether the insurer will use this deductible. This is because he finds out about everything only after the repair has long been completed.
In doing so, while making use of Green Parts’ declared right to offset, the insurance company does not objectively determine the value of any parts or even indicate which parts are involved. Moreover, it does not even inspect them. How, then, can the value of damaged parts, which are then subject to a deductible, be reliably estimated? Interestingly, since the insurer itself assumes that the part is no longer serviceable and needs to be replaced rather than repaired, what market value can one talk about?
The Green Parts policy from yet another legal point of view is a misunderstanding. The entitlement under “Green Parts” legally, constitutes a set-off of one’s own claim, or a credit against it. Making a deduction or credit requires a special authorization, which a serial liquidator is certainly not equipped with. In the case of auto-insurance liability, the Green Parts provision, due to its blanketness and therefore arbitrary use, can also be evaluated through the prism of invalidity.
And in terms of consumers – through the prism of abusiveness..
The Green Parts policy will probably be modified in the future. As of today, it seems easy to challenge, at least in legal proceedings.