Direct Repair Shops: What The Consumer Should Expect

A direct repair shop can be positive or negative for a consumer depending on the benefits received.  In California, they overall seem like a good thing because of the state mandate surrounding how they must be offered and the guarantees that must be provided. This is not the case in all states, therefore it is prudent to review what the insurance company is offering before you decide to use their program. If the overall benefits that you receive from using the insurance company's direct repair shop does not seem to be in your favor, don’t do it. Remember, you are helping the insurance company save money by using their direct repair program so hopefully you get something out of it in return.

Direct repair shops are good for the insurance company because it saves them money on repairs. A direct repair shop has a contract with the insurance company, and is inclined to work with the insurance company and agree to them paying less for more. As a result, the shop is directed a volume of work from the insurance company and typically gives provisions to their clients such as priority status, rental car coverage if the car takes longer than quoted, and the ability to audit the work during and after the vehicle has been repaired. This means that a good shop with a good, knowledgeable claims adjuster will be able to get your vehicle repaired faster with a quality end product.

Direct repair shops are either owned by or contracted with a particular insurance company. They work with the insurance company, usually in an expedited manner to get an estimate written, the repairs agreed upon and the repairs completed. Typically consumers who use these shops get their vehicles back quicker. The shop usually provides a lifetime warranty and works closely with the consumer to resolve any issues.

Direct repair shops are good for the consumer in many regards, most have a higher satisfaction rate for repairs and often times have a better warranty since most are covered not just by the shop but the insurance company as well. In addition, the shop is more inclined to work with the customer to do what it takes to make them happy. You are also more inclined to stay informed about the status of repairs via your adjuster and the shop since most insurance companies have an adjuster onsite or at the shop several times a week. Lastly, since the insurance company is consistently there, there is more of a push to get your vehicle completed in the least amount of time so your downtime is usually minimized.

On the flip side, there are some negatives when consumers use a direct repair shop. One is that the consumer seems to lose control and input on the repair methods since most insurance companies tend to try and control repair costs is using aftermarket or recycled parts. When using a direct repair shop, the shop is more inclined to agree to their usage to keep the contracted insurance company happy. Whereas an independent shop has an obligation to the customer not the insurance company, so they tend to argue more to minimize their usage. With some insurance companies, you lose your ability to choose the shop that you want to conduct the repairs. Most give you a list of shops to choose from, but at least one has you drop off your vehicle at a consolidated drop-off location. They then write an estimate and contact a body shop of their choice where the repairs will be completed.

When I worked in a direct repair shop, two of the largest problems I encountered were customers who weren’t happy with the work and any delays with repairs. As a result, before you consider a direct repair shop, ask some questions. Is there a warranty or guarantee? If I have a problem, who do I deal with? What is the insurance company’s affiliation with the shop(s) that are being recommended; does the insurance company own it, or simply have a contract with them? How long has the shop been in business? What happens if the shop goes out of business, does the warranty transfer to another shop if I have an issue?

In the end, look at what you’re being offered. Ask the right questions and you’ll find out if it’s the right decision for you. Ask your friends; see if anyone has dealt with the body shop that the insurance company is directing you to.  I have been on both the insurance and consumer side of insurance claims, and have used and not used direct repair shops. I have found that some programs are better than others and that it is smart to read the offer before I accept.