Insurance companies want to satisfy their customers
Under a direct repair program, an insurance company and a collision repair shop sign a contract to repair a policyholder's car in the event of an accident. The direct repair program is widely used by auto insurance companies in the United States because it is cost-effective. The concept of direct repair was first used in the late 1970s and popularized in the 1980s. In 1988, for instance, Allstate insurance company dubbed its direct repair program Priority Repair Option (PRO). Federal law requires that insurance companies deal with any competent collision repair shop.
Friction Between Insurance Companies and Collision Repair Specialists
Insurance companies and collision repair specialists often disagree.
While insurance companies want to save money whenever there is a claim, collision repair facilities will demand the amount of money they consider is commensurate with their labor rate and motor vehicle parts. That inevitably creates disagreements and acrimony between the two parties. Both insurance companies and repair shops want to maximize their profit, and often they think that the practice of the other undermines another's financial viability.
Paper Work
There is additional paperwork involved in direct repair programs. That is because the insurance company and the repair shop have to sort out the specifics of their program whenever there is a claim. While this is going on, the claimant is given a rental car to use for the period her car is being repaired. Once the initial paperwork is done, the shop does not need to suspend its work if, for instance, it finds out that the cost of repair was undervalued. Work on the car is allowed to continue while adjustments to the evaluation are being made.
Customer Satisfaction
When a claim is processed quickly, the level of customer satisfaction is higher. In business that is critical because you not only retain existing customers, you establish a good reputation for the company that will lure more people. Insurance companies are usually worried about fraud in auto repair shops. Which is why they carefully monitor the workmanship of repair shops, lest they abuse the trust in that partnership. However, collision shops also worry that the cost of concession might be too high. Good workmanship is good for both the insurance companies and collision shops. Customer satisfaction is an effective form of advertising.
Tags: collision repair, direct repair, direct repair program, insurance companies, repair program
