There are calls for urgent reform of the smash repair industry after an ABC investigation revealed significant concerns that repairers linked to Australia's major insurers were putting vehicles back on the road with potentially deadly faults.

A special investigation by 7.30 NSW has found evidence of repairs allegedly authorised by insurance companies to be inadequate and in some instances dangerous and unlawful.

Allegations that insurance companies are putting profit ahead of safety and that corners are being cut in repairs have been put to a NSW Parliamentary inquiry into smash repairs, which is currently underway.

NSW Parliamentary Secretary for Transport and Roads Ray Williams is assisting the inquiry and says the committee's final report has been delayed due to huge volumes of evidence.

"There have been some quite alarming figures in relation to the poor quality of repairs in a certain percentage of vehicles," he said.

The Motor Traders Association (MTA) in NSW is regularly contacted by motorists concerned their cars have not been fixed properly.

It has started to document the cases it receives and has supplied the list to the inquiry.

Fifteen insurers in total are named on it, including all the major brands, with issues ranging from less serious, such as peeling paintwork, to serious and potentially life-threatening, such as loose or compromised structural components.

MTA chief Greg Patten is worried the more serious shortcuts in repairs will never be spotted until it costs motorists their lives.

"There are a number of cars that have been repaired that badly that if they were involved in an accident ... they would cause serious and maybe fatal outcomes for not only the occupants of the car but for other people on the road," he said.

Faulty repair job could have poisoned driver: panel beater

Paula Parissis is one of the people who contacted the MTA.

Her near-new Holden Cruze, insured by AAMI, was towed to an AAMI preferred repairer after it was rear-ended seven months ago.

AAMI is owned by Suncorp, which owns 12 brands including AAMI, GIO, Shannons, Bingle and Just Car Insurance, one of the largest insurers in Australia.

When Ms Parissis went to pick up her car after the four-week repair, she found the boot did not close properly and gave the car back to be fixed.

When the car was again returned to her, she believed the boot still was not closing properly, and sought a second opinion from an independent assessor, Adam Thomas.

Mr Thomas, a qualified panel beater and repairer who used to work for NRMA Insurance, says he was fired after complaining about some of its practices.

He believes the boot problem was the least of Ms Parissis's worries, saying the seal around the boot has not been fitted correctly.

"They have replaced the back panels and they didn't put them on in the right position," he said.

"The vacuum that's created at the back of [the] car its actually sucking exhaust fumes into the back of [the] car, which is ultimately poisoning you with carbon monoxide."

Suncorp head of corporate affairs Reuben Aitchison disputes the finding, saying the insurer is "comfortable that the initial repair work had been done to specifications, aside from the paint buffing, which has now been rectified."

Rare problems are to be expected, insurer says

A luxury Audi, also insured by AAMI, that was involved in a smash in November last year broke down after being collected from a recommended repairer, according to owner Rami Dandan.

Mr Dandan lost faith with the insurer and its repairer and employed licensed smash repairer Amer Zreika from Auto Parlour Repairs to review the work.

Mr Zreika believes the car has been so poorly repaired it is dangerous and should be written off, pointing to structural parts that are bent, missing or in other ways compromised.

He believes the repairs were done on the cheap.

The business that repaired the car quoted $17,129 to AAMI to fix it but Mr Zreika believes the real cost is actually $61,429.

Mr Aitchison says AAMI would like the opportunity to look at the car again and to fix the problems.

"We don't want cars going off our repairer's lots that require rework. We back our repairs with a lifetime guarantee so it is in our interest to make sure it is right the first time and that aligns with the customer's interests as well," he said.

He says there will be rare occasions where things go wrong when companies are repairing hundreds of thousands of cars.

"Most repairers that we work with have a very strong commitment to quality but cars are incredibly complex and some repairers have a bad day on very, very rare occasions," he said.

Shiny paint and clean carpets 'may hide serious problems'

What worries motoring bodies is that from the outside repairs may look good, but that shiny paint and clean carpets may be hiding serious problems underneath.

Tony Webber from the Federal Chamber of Automotive Industries says it is an issue that needs to be addressed nationally.

"A car may look perfectly well repaired but the reality might be something different and consequences [of] that can be substantial," he said.

"Normal consumers don't have the information available to know if their cars are being appropriately fixed or not after an accident because I wouldn't know and I'm sure there are a lot of the population out there [who] wouldn't know."

The MTA estimates thousands of unsafe cars could be on Australian roads and says insurers having repairs carried out on a price, rather than quality, standard is driving the problem.

Insurance giant IAG, which owns brands including NRMA insurance and CGU, does not believe there are any systemic problems in the industry.

Executive manager Roy Briggs says the industry is going through significant changes.

"I think the reaction to that change is creating this noise," he said.

"There is no systemic problem in the industry – [claims of] assessors slashing quotes and creating those problems [are] simply not true."

Mr Briggs says IAG checks a minimum of 10 per cent of repairs for safety and quality issues.

Over the past three years it has found about 1,200 issues "ranging from dust in paint right up to the serious stuff".

Mr Williams says there are few measures in place to stop consumers being put in harm's way.

He wants to see insurance assessors checking every car at every stage of the repair to ensure that the correct parts and methods are being used.

"It should be done through the assessment process," he said.

"First and foremost, we need to check whether or not our assessors are fully qualified and doing an appropriate job."

Mr Briggs says IAG welcomes the inquiry, adding the company is investing heavily in its own quality program.

He says it would like to see stricter rules across the industry for unsafe repairs.

"What we need to see is stronger action taken when there is demonstrated to be systemic issues with a specific repairer. I think it's actually too easy to continue to repair cars," he said.

Suncorp has also welcomed the inquiry but with some reservations.

"A lot of the ideas that are being put forward in the industry are likely to raise insurance premiums by as much as 15 per cent [with] absolutely zero public benefit," Mr Aitchison said.