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What is a Direct Repair Program?

By Cathy Rogers
Updated May 16, 2024
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Some auto insurance companies use a direct repair program to provide repairs for their policy holders. In this type of 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 concept became more common in the late 1980s 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.

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' programs.

Although this type of agreement 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 agreements. In these instances, any automobile body repair business or location that meets objective criteria can participate.

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Discussion Comments

By anon961610 — On Jul 18, 2014

"Things to do after an accident." It's everywhere and number four is call the insurance company. There's nothing the insurance company can do for you when you are standing on the side of the road after an accident. They use this to their advantage.

It's easier to steer someone who's half knocked out. (steering is when an insurance company talks you into using a repair shop that have a contract with, so they can repair your car in a substandard way to save themselves money).

If you are hurt, go to the hospital. The police will take care of towing your car. If you're not hurt, any towing company will tow your car to their place without charge (you will pay before it leaves their place). If you are not thinking straight, the police will pick one for you.

So no, you don't have to call the insurance company on the spot. The first meaningful thing thing the insurance company is going to do for you is send out an adjuster and this can take days, so there's no rush to call them.

Go home, take a break and a little bit of time to collect yourself. An automobile accident can be very traumatic even if you are not injured. If you take some time to think, you might know and even trust someone in the collision repair business. If you do, call them and they will take care of everything. It's not crucial who does the towing. You can move the car anywhere you want as soon as you pay the first guy's towing bill. It's your car; you choose where it gets fixed. ​Charles M.

By anon929061 — On Jan 30, 2014

I own a body shop and have been in business for 35 years. We do quality work and guarantee all of our work. The DRP program has hurt us so bad that we may go out of business.

When the customer calls to open a claim, the adjusters actually scare them not to take to any other shop but theirs. They make them believe that if they bring to the shop of their choice, that the car will be completed wrong and that they will not guarantee it. They don't guarantee it anyway; the shops do.

I've been in accidents myself and when I call the insurance company, and what they say can scare anybody into using their shops. This has to be against the law but what is our state government doing about it? Nothing and that's why the economy and the small businesses are hurting is because nobody is representing the small businesses.

By anon925269 — On Jan 11, 2014

Progressive is in the process of steering me to a local shop for vehicle repairs. Progressive had me bring my car for "an appointment" with one of its shops to have the car "examined." The appointment resulted in my receiving nothing in writing nor an estimate.

Nonetheless, I received a voice-mail from the insurance company that stated I need to schedule repairs at the facility where the Progressive appointment took place.

I never received an estimate. I have zero facts, figures or information about projected repairs. How can I move forward without information? Strange.

The insurance company representative keeps stating that we need to move quickly to settle this claim -- without numbers. Nope. I'm not moving quickly and will not move further until I see more information. So strange.

By anon360226 — On Dec 25, 2013

I work for a major carrier as an adjuster. We have a Direct Repair Program. We adjusters are pressured by management to steer customers to our DRP shops. Of course they don't actually use the word "steering" but that's what it is. The more an adjuster steers the more likely he or she will be promoted.

By anon337438 — On Jun 05, 2013

I love this site, it's just so clean and neat. Now I know a little more about car insurance in Halifax and I'm ready to sign up with a good company.

By anon272747 — On Jun 03, 2012

My, oh my. Some of you have been brainwashed. Hopefully you're not too far gone. If you think that everyone works for $35-$40 per hour and is a DRP you need to open your eyes and get educated. You are talented techs I am sure. Now start being good business people.

In Connecticut, I consistently get paid $75-$80 per hour for collision repairs. Why? Because once you ask the insurance company to repair that dented fender or door with their pen, you understand that they can only write a check with that pen! Then there's the estimate they write (and by the way, it isn't really an estimate; it is a informational tool they use to set up a cash reserve to pay cash out for that claim). Period! They do not repair vehicles; you do!

Take control of your vehicle, tell the customer you are a professional and you will repair the vehicle like a professional. Make them understand that the insurance company has only one obligation: to compensate you for your loss. If they try to use aftermarket parts, tell the customer, then tell the insurance company no problem, as long as they are willing to sign a hold harmless contract to accept all liability for those aftermarket parts, then you will be happy to use them. Guess what? They never will. They will magically pay for them How hard was that? Don't believe it? Try it!

Join CCRE! You will see the light, my friends in Connecticut, as well as other areas of the country. Your brothers in this business are getting paid and you are not. We are all in this together, so don't be fooled. Be educated. I hope everyone reads this. It is very very true!

By anon253493 — On Mar 09, 2012

DRP is a way insurance companies can control more of your business and force shops and their employees to work harder for less. Cheap, fast or quality - you can't have all three. The labor rate in Massachsetts is the one of lowest in the country and is set by insurance companies who tell their policy holders "we are only paying $37 or $40 an hour."

If a shop signs on for DRP they are setting themselves and their workers up to be squeezed to work for less and provide deep discounts to insurance companies, not the customer.

By anon253357 — On Mar 09, 2012

Any shop that signs up for DRP with an insurance company is idiotic. They will lose their integrity, their quality and the workers will become slaves for the insurance companies.

Massachusetts has the lowest paid labor rate in the country because insurance companies will only pay $35-$40 an hour for collision repair? Why can't established shops and experienced technicians get paid a decent wage. Because scabs like DRP shops make deals for inferior parts, cut corners and kick back to insurance companies. They will do it cheaper, which always lessens the quality. Don't trust your insurance company to pick your shop for you. They just want it done fast and cheap they don't care about quality and that's what DRP really means.

By calcollision — On Feb 17, 2012

I've been running a repair and body shop business for almost 30 years. In some areas - geographical locations - a body shop can survive without DRP by getting enough visitors and customers referrals. However, a body shop like mine cannot survive without DRP.

I'm willing to work with insurance companies on their rates, as otherwise I'll have to go out of business pretty soon. Insurance companies steer all the customers to their DRP, which leaves nothing for someone without and insurance company relationship. If anyone knows a good way to get an insurance company's DRP, please contact me. I recently moved to a new area and I don't know much around here.

By anon166291 — On Apr 07, 2011

Everything posted is false, get your facts straight before you post. Anon5316, to say shops that participate in direct repair programs are not reputable is the same as saying you actually understand the insurance industry, and both are incorrect.

By anon58165 — On Dec 30, 2009

Herein hides the lie. All repair shops offer warranties. They handle the entire repair process!

For the love of God in heaven people, when has an insurance company ever done anything except watch their bottom line? Go to a reputable shop that your family and friends have used. Do not trust your insurance company!

By anon20017 — On Oct 23, 2008

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?

By magnumpi — On Apr 17, 2008

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.

By BodyMan007 — On Jan 31, 2008

"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 and repainted to create a new car.

Some things you just can't get out of a junkyard and insurance companies fail to realize this.

By anon5316 — On Nov 20, 2007

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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