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…