May 22
Direct Repair Programs for Car Insurers
The major auto insurance companies use a direct repair program (DRP) 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. In this manner, the insurer adopts a list of preferred providers. In most states, that means you are obligated to use one of your insurance company’s DRP participants to have your car repaired.
Many of us have probably seen how a DRP 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 list of local repair facilities. 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 obvious advantage to the auto shop is the steady stream of referrals; the disadvantage to the consumer is the discounts the shop is required to give in order to obtain the DRP. Those discounts are going to mean cutting corners on the job.
The downside for the consumer is in the terms of the agreement between shop and insurer. Some direct repair program contracts between insurance companies and shops require the repairer to write all estimates using aftermarket or salvage parts. The contract may put the responsibility of any non-essential repairs to the customer.
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. If your insurer maintains a direct repair network, it means that when it comes to repairs you’ve been taken out of the driver’s seat.
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May 31st, 2007 at 11:13 pm
My concern with this type of agreement was touched upon in the third paragraph – the repair facility could be inclined to cut corners on selling and completing their DRP insurance jobs, and the insurance company could also specify the cheapest repairs possible, even if they are shoddy. I would rather arrange for it myself and KNOW that I am getting the job done right, thanks.
Jerry<