A direct repair program is the general name used to describe insurance companies' circles of collision repairers willing to sign an agreement with an insurer agreeing to adhere to the insurer's "guidelines" setting parameters and limitations on the type of repair you will receive in exchange for the insurer referring you to them.
Unlike in the health insurance arena, your premium for auto insurance is not based on your agreement to patronize an auto repair equivalent to a health maintenance organization ("HMO"). It's like you paid your premium to go to any collision repair shop you choose, but now the insurer is trying to force you into using one of its HMO shops. If your insurer succeeds in convincing you to utilize a "DRP" shop, it is able to exercise more control over the repair you actually receive. That control is about saving the insurer money, not about ensuring you receive the best possible repair. In fact, some of those repairs coming out of insurer "preferred" shops are downright dangerous and render the vehicle unsafe to drive. That is because the shop is trying to please the insurer by keeping costs down, and sometimes the only way it can make money is to skimp on your repairs.
That doesn't mean that all collision facilities participating in insurer DRP programs do poor work, or that all non-DRP shops do great work. What it does mean is that the shops participating in the DRP programs are far more likely to think of the insurer as the customer rather than you and more likely to give the insurer what it wants -- a cheap repair -- rather than what you want -- a safe and proper repair.
Also of concern is that the insurer forces the repair shop to indemnify it for claims made against it about your vehicle repair. This can put the repairer's own garage insurance at risk and your ability to recover against the shop if something goes wrong.
Read terms and requirements of some direct repair program documents.
My insurer (or the other guy's) is recommending I use certain repair shops. What should I do?
If the insurer recommends a collision repair shop to you or gives you a list of "preferred" shops to choose from, be prepared to ask some questions.
First, if your insurer is dealing with the repair under your own policy (not the other guy's), make the insurer send you a written statement about the "settlement option" it is electing under your insurance policy. Most states' auto insurance policies allow your insurer to elect a remedy by either "paying for the loss in money" or "electing to repair". Click here for a fillable PDF form you can use for this purpose.
Second, ask to see a copy of the agreement the insurer made the shop sign to get on the insurer's "preferred" list and all of the insurer's "guidelines" or recommendations about how the shop will have to repair your vehicle. If the insurer or the shop won't show you the agreement and guidelines, don't use that shop and consider whether you should change your auto insurer. Insurers always tout how great their DRP networks are for you, the customer. If that's truly the case, they should be happy to have you know exactly what the shop has agreed to -- on your behalf -- with the insurer about your vehicle repair.
The insurer will likely have told you that it will "guarantee the repairs" performed by a network shop. Ask to see this repair guarantee from the insurer in advance of repairs. Many insurers only "guarantee" the imitation crash parts that it asks the repair shop to use on your vehicle, and only after you have exhausted trying to have the imitation part manufacturer (which is typically located in Asia) remedy the defect guaranteed against. Additionally, insurers' guarantees are often illusions that sound good, but don't have any substance.
Call on an insurer to make good on one of these guarantees and you will likely get a lot of double-talk about how you have to take the vehicle back to the shop that performed the repairs, how this isn't the insurer's problem, and to take up the issue with the repairer. Besides, the repair shop is the one actually guaranteeing the repair work.
Don't be misled. Every quality collision repair shop guarantees its own repairs.
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