What is a Direct Repair Program?
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Some auto insurance companies use a direct repair program to provide repairs for their policy holders. In a direct repair program, a collision shop and an auto insurance company complete a contract to provide repairs for the insurance company's claimants. First used in the late 1970s, the direct repair program concept increased in the late 80s and early 90s.
This is how a direct repair program works: You are involved in an accident and contact your auto insurance company, or the insurer of the at-fault driver. The auto insurance company then refers you to a network of conveniently located repair facilities that offer a limited lifetime warranty on the repairs to your vehicle. The service might also offer on-site rental car arrangements. Because the insurance company and the collision shop handle all the details and paperwork, you do not have to do so.
The collision shop and the auto insurer determine the specific provisions of a direct repair program. The advantage to the collision specialist is the steady stream of referrals. A collision shop might participate in one, or several, insurance companies' direct repair programs.
Although a direct repair program can generate additional paperwork for a body shop, it can also prevent delays. When an additional part is needed for a repair, the shop does not have to stop working on a vehicle to wait for an insurance adjuster to re-evaluate the situation. Insurance companies promote the advantages of a direct repair program to their customers as convenience, warranties on repair work, and the freedom from estimates and other paperwork details.
Some direct repair program contracts between insurance companies and collision specialists require the repairer to write all estimates using aftermarket or salvage parts. Other details can assign the responsibility of any non-essential repairs to the customer. Some contracts also require the collision shop to shoulder all liability for repairs performed and indemnify the insurer from any lawsuit the customer might bring.
In some states in the U.S., legislation requires that insurers must admit any qualified collision repair shop into their direct repair program. This prevents insurance companies from limiting the number of automotive body repair businesses or locations with which they have direct repair programs. In these instances, any automobile body repair business or location that meets objective criteria can participate in an insurer's direct repair program.
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New: Discuss this ArticlePosted by: magnumpi
In the early 90's Allstate was one of the most abusive companies to deal with. I ran a GM body shop and the only customers I got from Allstate were those that bought cars from us. All the other work went to an independent a mile down the road. Most major insurance companies are more concerned with CSI than cutting shop estimates, or mandating how repairs are completed. There are still a few of the very large carriers that like it their way but how much negative press can a company stand before they are no longer the giant on the block. Run properly with good oversight a DRP can add benefit to the customer, the shop, and yes the carrier. It has to be a 3 way win or someone is getting hosed.
Posted by: BodyMan007
"Some direct repair program contracts between insurance companies and collision specialists require the repairer to write all estimates using aftermarket or salvage parts"
Your insurance company does not make a distinction between which aftermarket or salvage products can be used safely on a car. They only distinguish by price.
Using an aftermarket or salvage fender is usually not a big deal but an insurance company will use aftermarket structural pieces that don't meet manufacturer standards and salvaged suspension components. they have even been known to require that vehicles be cut in half and an entirely salvaged vehicle half be welded up adn repainted to create a new car.
Some things you just can't get out of a junkyard and insurance companies fail to realize this. Posted by: anon5316
Direct Repair Is a way for insurance companies to make more money. When have you ever heard of an insurance company trying to make your life easier? They direct their customers to a body shop willing to do a job at a largely discounted rate. These discounts force the direct repair body shop to cut corners in order to make a profit. These cut corners result in a poor quality repair. Direct Repair is a way for insurance companies to make more money. don't fall for it, bring your vehicle to a reputable body shop.
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Cathy Rogers
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