Once again, the old battle of good vs. evil rears its ugly head, but this time it’s in the collision repair industry. When you get into a car accident, and you need to repair your vehicle, who do you go to? Do you use your own “guy,” or do you go to one of the shops suggested by your insurance company, which is called a direct repair shop.
The reason this is such a hot topic is because the insurance companies have basically taken the freedom of choice away from the vehicle owner. If you use one of the direct repair shops recommended by the insurance company you will get perks that you will not receive from a non-contracted repair provider.
One major bonus is that the parts and repair you receive will have a warranty. It never hurts to get a warranty, in particular when dealing with a high dollar item such as car repairs.
And another perk, if you can call it one, is if enough people complain about one of the direct repair shops, the will receive bad marks and ultimately be cut from the program. This is a huge loss for the repair shop, because let’s face it, no shop wants to lose millions of dollars worth of business.
But here’s my question to you, and it’s a big one, so pay attention.
Why do you even care if a company gets removed as a DRP (direct repair program)?
Granted, this will only end up helping the people in your shoes that come after you. By getting a subpar repair shop removed, you save future accident victims that belong to the same insurance company as you the agony of dealing with an undeserving company that really doesn’t care about the people they work for.
While this is definitely a nice thing to do for others, this really is not helping you today or even years from now, unless of course you plan on making car accidents and repairs a regular part of your life. If that’s the case, then you are doing yourself a tremendous favor later on down the line.
Truth be told, direct repair programs are not designed with the consumer in mind. Their main function is to save the insurance companies truckloads of money, while they in turn set up a system where the insurance company doesn’t have to pay the insured the what they are truly owed on their claim.
There is a word for this in the English language. It’s called theft. And as usual in this country, a group of major players (the insurance industry) devised a system to legally steal from all of their customers. Because make no mistakes about it, they are stealing from you.
By making it so unbeneficial for you to use a repair shop outside of their network, they are legally forcing you to use companies that work with them to swindle you out of your hard earned cash.
Do you fight the system or conform to it? You be the judge. Anyone have any comments? Feel free to join the discussion.
Direct Repair Programs have essentially taken control of the collision repair industry. Allstate has had some form of a direct repair program on and off since the 1960’s…this is nothing new. The concept, irregardless of the company, benefits the shop, the consumer, and most of all, the insurance company. In recent years, shops that do not participate in one or more DRP programs have a very tough time surviving. With the strong downturn in the economy, the pool of available business for shops has shrunk significantly. Insurance companies now have a long list of shops who are waiting to get on their program, and this in turn has played into the insurance companies hands quite handily. In recent years, the insurance companies, as a whole, have really “tightened the screws” on what they demand from shops who participate in their programs. Most of the companies demand a lower labor rate than what the prevailing labor rate is for a given area, many demand parts discounts, many require the shops to push used and aftermarket parts on the estimates, and many have very demanding timelines for the time the car is at the shop for repairs (called “cycle time”). The quicker the car gets in and out of the shop, the fewer days the insurance company pays for a rental car. In addition to that, many of these companies have very specific and cumbersome paperwork and reporting requirements that the shop must follow exactly and precisely, or risk being kicked off of the program. In addition, most insurance programs have very specific instructions as to how the shop writes their estimates right down to exactly what the shop can charge for a given labor operation, such as a front end alignment. Often times, shop estimates must be sent to a regional screening center to be scrutinized to the “Nth” degree. Shops are graded regularly on all aspects of the repair assignment by the insurance company. What all this amounts to is that the insurance company can operate with a “skeleton” crew off staff compared to what they used to have to maintain a few years ago…the shops are doing much of what adjusters used to do for free…for the benefit of the referrals of the work. Because of the program requirements, the shops are operating from a much tighter profit margin; little to none in certain cases. The shops now have to have more people working in their offices to process all this extra paperwork, and often have to work long, hard hours to keep up with the demands of the direct repair programs they now depend upon for their very survival. There are a few positives that have come from DRP’s. The main one that comes to mind is that shops that were subpar with their quality and service have had to “get with the program” in those areas. Consumers should understand that even if a shop does NOT participate in a certain insurance company’s DRP, if that shop has been around for awhile, has a good reputation in your area, and has a good record with the local Better Business Bureau, you should go ahead and have that shop fix your car if that’s where you want to go. Some insurance companies will subtly try to keep you away from shops not on their program by making rental cars difficult to obtain, and lead you to believe it may take many days before one of their adjusters can inspect your car. If you encounter these obstacles, you may need to “bristle up” and demand the service you are entitled to. There is absolutely no reason why you should not be able to have your car fixed at a shop owned by a relative, a friend, or just someone you have used in the past that gave you good service, or at a shop where a friend or relative works. It’s your choice to decide whether you want to use an insurance company’s DRP shop, or a shop you prefer. Benefits of your insurance policy, or the other person’s policy if someone else was at fault, CANNOT be limited or restricted because of the repair shop you decide upon. On the other hand, if you happen to select a shop that for some reason charges more for their services than what other competent and reliable shops in your given area charge, don’t expect the insurance company to pay more for services than what is prevailing rates and usual and customary for your locality. Although I believe a collision repair facility; or any business for that matter, should be able to charge what they feel they need to charge to remain healthy and profitable, it just doesn’t work that way in this industry. Some shops, in the past, even when the economy was much better, tried to exclude themselves from the “status quo”, and fight against insurance company practices, most have found themselves subtly “blackballed” by the insurance companies, and end up out of business over a relatively short period of time. Lastly, the subject of warranty and guarantees needs to be addressed. Virtually ALL insurance companies will tell you that THEY will guaranty the repairs for as long as you own the vehicle if you got to one of their DRP shops. While this could be an advantage if you are someone who moves from one geographic area to another often due to work, etc., truth is virtually ALL shops worth their salt offer the same warranty these days, whether they are a DRP or not. In most cases, if a DRP shop fixes your car, and you move to another area, if a warranty issue comes up, you are going to be sent to another DRP in your new area. Whatever expense there is involved in warranting your car is then going to be collected from the shop who originally fixed your car by the insurance company…the INSURANCE company really didn’t warranty your repairs in tha scenario…they only acted as a facilitator…the shop who originally fixed shouldered the expense, and the shop who originally fixed itis REALLY who warranteed it!…NOT the insurance company as they lead you to believe. So again, select the shop who repairs your vehicle based on what YOU feel is the right choice.
Of course they are killing the collision repair industry. Do you really want an auto insurance HMO?? That’s what it’s coming down to.
This is a hot topic
I agree with you and yes they are killing auto body repair. For example, I repaired a car about a year ago I saw some damage that looked old and couldn’t be from the wreck I was fixing so I let him know about it. He told me that it was fixed about six months ago by a (DRP) shop,I asked him what all they did he showed me a copy of the bill the ins co. paid,there was a new 1/4 panel put on the car 8 hundred and something dollars and 20 something hours. I was wondering so I looked and sure enough I saw little weld spots on the back side of the 1/4 where they had straightened it sorry in my book that is fraud. A big chain of auto body shops that owns over forty locations just sold out and changed their name so what kind of warranty does that guy who just got his car repaired a month ago have now. Good luck getting the insurance company to pay for it. The warranty doesn’t come from ins co., it is the shop. so long story short i am a small family owned shop and our customers come here because they want to, not because they have to,and in five or ten years from now I’ll still be here. If something wrong with what i repaired on your car i will fix it. If there was no (DRP) programs many of these big shops would be out of work. Customers only go to them because they are made to believe that they have no choice by their ins co. People have the choice to go where ever they want and ins co. will pay, I personally would go to the smaller shop that has been around long time and talks to me like a person not a number. Good luck to all the smaller shops and the customers who have ins co. with (DRP) shop my prayers are with you.
I just had another lengthy conversation yesterday with an Adjuster working for Allstate—flat asked him again why he was purposely taking jobs away from our shop and steering them to one of four in this area—he said he had to tell customers what was required by Corporate Headquarters—when I told him that it was how he was phrasing his remarks to Policy Holders that was scaring them into taking his advice to steer the repair to where he wanted it to go instead of the Customers choice—he said that it wasn’t that hard to do—he just tells the customer that they can leave it here to fix—but’ they are on their own, because Allstate will not warranty our work—that is the best and direct answer I have ever gotten from an Adjuster–goes to show us small, reputable (37 years) at this location, the lengths they will go to steer work to the DRP—it is their way around this States anti-steering Law—we will survive—we have