DRP's (part II)

Because the practice of steering customers is illegal, insurance companies have to be very subtle in how they go about it. They use terms like warranty, quality work, expediency, etc. Any reputable repair shop that is worth its salt will offer you these same things.

Some insurance companies steer more than others and some are just more blatant than others. Some insurance companies will set up DRP's with many shops in an area and some will use very few.

How does it all effect the customer? Is it beneficial to the customer to use a DRP? There again, it all depends on which insurance company you happen to be dealing with. Let's look at a collision claim from wreck to repair.

I have just been involved in an at fault collision. I called the police to the scene and their writing their report. I know it's my fault so I decide to go ahead and get the claim started so I can get my car fixed.

I call my agent or the 1-800 number on my insurance card and tell them what happened. They give me a claim number and now offer me the DRP.

For this example I'll opt out of the DRP because the shop I use isn't on the list. Now this can go one of three ways from here: I will either have to get an estimate from the shop and fax it off to the insurance company for approval, the insurance company will send out a rep to write the estimate, or the insurance company will send out an independent appraiser. In any case I'll be using the shop I chose.

What a lot of folks don't know is "this is just an estimate", it is not a final bill. The rep may cut a check on the spot to spend at the shop I decided on. The independent will send his estimate to the insurance company and an adjuster will do a desk review and he will cut the check. The shop's estimate will go through the same process as the independent adjuster's but will most likely be scrutinized a little more, payment will be issued to the me, the shop or me and the shop.

To be Continued...

DRP's (Part I)

What is a DRP?

Many insurance companies nowadays have what is called DRP's. DRP stands for "Direct Repair Program". 

Insurance companies have developed this program for several different reasons. These are a few of the most popular reasons in no particular order:

  1. Expediency in handling claims

  2. Convenience for the claimant/insured

   3. Cost of repairs

  4. Rules/regulation of repairs

  5. Lower overhead/fewer employees

The shops must meet certain standards and prerequisites to become a DRP shop for the insurance company. These include training, certification, mandatory equipment requirements, shop space, etc. Inspections are done and once the shop passes the test, "negotiations" begin. By negotiations, I mean, the shop agrees to concessions. These concessions could be price reductions, discounts on parts prices or the old “I’ll get yours out before theirs”.

Why would a shop put itself through such scrutiny? Along with all the concessions, the shop gets the benefit and pleasure of working on that insurance company’s claims without having to deal with independent appraisers, adjusters and writers. Being on Joe Blow Insurance Company’s DRP would of course not be as beneficial as being on State Farm’s DRP because of the sheer volume that they would be steering towards your shop.

Well I’ve gone and done it, I’ve spilt the beans on the DRP! I guess I shouldn’t stop now.

Did you know that "steering" is illegal? What is "steering" you ask? "Steering" is the practice of telling the claimant or insured what shop or estimate that they are required to use.

 

To be continued…

I believe introductions are in order...

The truths about auto repair are often harder to deal with than the repairs themselves.

I have been in the collision repair industry all my life- minus the few years that I wasn’t able to form sentences and still wearing Huggies. My father was a self-taught paint and body man. After his breakout into this profession, he continued his education in the trade through hands-on training (a lot of trial and error) and furthering education through classes and certification programs.

After 25+ years in the trade, he took the plunge into self-employment and we have been running it successfully for the last ten years as an independent, family owned repair facility. Between my step brother, my father and me, we have a combined 80+ years experience. We have done, heard and seen it all. We know the lies, the scams, the insurance companies, the tricks, the repairs, the how-to’s, the never-do’s, but most of all we know the truths.

This is a new blog and I am a new blogger. I just want to try and get some information to the people: The everyday people that drive their cars and wreck them, the people that pay my bills, and the uninformed civilians who may be dealing with a collision and the repair process for the first time.

Thanks for reading,

The BodyMan