Tag Archives: direct repair shops

Ever Wonder Why Insurance Companies Use Direct Repair Shops

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Direct Repair ShopsLet’s face it. The goal of any good business is to make money whenever they can, and also save money too. This in particular is a delicate balancing act put on by insurance companies. But they do not do this with complete greed in mind, like so many of you would like to believe. Keeping their costs low is huge boon for you the insured as well, because it helps to keep premiums down.

One way insurance companies implement cost cutting measures is by recommending that the people they insure use the direct repair companies with which they are associated. These companies  are under contract with the insurance agencies, which allows the agency some perks that they don’t get from a non-contracted repair shop.

The first is the free storage. Let’s face it. Storing a car is expensive, whether it be for an individual or an insurance company. So one of the things in the contract with the direct repairs shops is free storage for the cars they are working on. You may not even realize this, but this storage fee gets worked into the cost you pay for repairs.

Next is another freebie, and it’s towing. If the direct repair shop ends up towing the car that they later get contracted to work on, the chances of the insurance company ending up paying for the tow truck virtually disappear.

You, as the consumer may not realize this, but it’s a good thing for you too. And I say this because somewhere along the line this fee would get buried right along with a bunch of other things that you would ultimately be paying for in the end anyway. So the insurance company’s deal with the direct repair shop saves you money in the end, which is why it’s truly in your best interest to use the repair shops recommended by your insurance provider. They really do have your best interest at heart.

And what’s the point of making a deal with direct repair shops if there are no pricing concessions involved. It would be kind of foolish, don’t you think?

These contracted repair shops offer discounts on parts and labor in some cases, keeping the costs to the insurance company down where in turn they are not required to pay out as much on their claims.

Right now you might be thinking “Wait a minute. Why is it a good thing for the insurance company to have to pay me less money on my claim?” The answer is very simple. They are only paying you less because the company that did the repairs charged must less than their competitor would have. Do you understand now?

The less the insurance company has to pay for repairs, the lower everyone’s premiums will be. This will always be the case, so it can be smart to work with your insurance company instead of against them. It’s just good business sense. So don’t use people outside of the network because you feel like your freedom is being taken away from you. You are only hurting yourself in the long run.

Are Direct Repair Shops Killing The Collision Repair Industry?

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Direct Repair ShopOnce 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.

Who decides what shop repairs my vehicle?

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You’ve had an accident and now you need to get your vehicle repaired. What do you do?

Whether you are a claimant or an insured, you need to report the accident to the insurance company.  When you speak to them, they will recommend one of their Direct Repair Shops.

Do you have to use a Direct Repair Shop?

No. In the end, the choice is yours. The insurance company may tell you that the shop of your choice is not on their “approved” list of shops and that they may not be able to efficiently handle your claim due to your selection of a certain shop, but do not be intimidated by this. It is your right to choose whatever shop you want to repair your vehicle.

However, if by chance you pick a bad shop (that is not a DRP), and they mess up your repairs, it is you against the body shop. The insurance company is only liable to pay for the original repair, it will not warranty how those repairs are made, whereas if you had gone to one of the insurance company’s direct repair facilities, then they would have to get involved.

In closing, always remember, you have to go with a shop that you feel comfortable dealing with. It is your vehicle being repaired and you have to be happy with the outcome.