Direct Repair Programs

The basic concept of Direct Repair Programs - streamlining the collision repair experience for the customer, the shop, and the insurance company - in and of itself is a wonderful concept, however the concept has eroded and the driving force now is money, money, money! It is the greed of the insurance companies, who through intimidation of the customer (the insured) and manipulation of the repairer, have driven the change. The insurer does not care how the vehicle is repaired - they just want it done as cheaply as possible. You're probably wondering why an insurance company would not care about the quality of the repair when the potential for liability exists. The DRP contracts they have with the repairer take care of that little issue...the contracts put the full liability back on the repair facility. Now your next question is probably, "Why do repair facilities sign these contracts?" The answer to this is: The insurance companies can make you or break you! If you're not part of the DRP program the insurance company will work hard to make sure that their insured does not bring their vehicle to you. Incentives are offered by the insurance company to the claims representative for KPI's that indicate a high success rate in getting the insured to go to a DRP and keeping them away from a non-DRP. Intimidation tactics such as, "that shop is not on our preferred list" or "we can't guarantee that shop's work" or "if you go to that shop, you may have out-of-pocket expenses because they may charge you more" work quite well in coaxing the customer to the DRP facility. (Keep in mind - the insurance company prefers the DRP because the insurance company saves money). Oh, I forgot to mention...the insurance company saves money by including in the contract a clause that requires a variety of concessions such as reduced labor rates, reduced paint rates, reduced body shop supply rates, etc. Again, you might ask, "Why does a shop agree to give these concessions?" There is a fear that if a shop doesn't sign the DRP contract there will be a loss of potential customers (due to steering by the insurance company) and also, the repairer is "hoping" that maybe, just maybe his sales will increase since the insurance company will "steer" work his way. Again, this is a false hope because many insurance companies will give DRP status to most of the shops in a particular market area thus guaranteeing for them (the insurer) reduced rates across the board. Pretty nifty isn't it?