Auto insurance companies use direct repair programs to provide convenient repairs to policyholders. The program involves a contract between a collision shop and the insurance company, with benefits including a limited lifetime warranty and car rental arrangements. Some contracts require the use of replacement or salvage parts and assign responsibility for non-essential repairs to the customer. In some US states, insurers are required by law to admit any qualified collision repair shop into their direct repair program.
Some auto insurance companies use a direct repair program to provide repairs to their policyholders. In this type of program, a collision shop and an auto insurance company enter into a contract to provide repairs to the insurance company’s claimants. First used in the late 1970s, the concept became more common in the late 1980s and early 1990s.
Here’s how a direct repair program works: You’re involved in an accident and you contact your auto insurance company or the at-fault driver’s insurer. The auto insurance company then refers you to a network of conveniently located repair facilities that offer a limited lifetime warranty on your vehicle repairs. The service could also offer car rental arrangements on the spot. Since the insurance company and collision shop handle all the details and paperwork, you don’t have to.
The collision shop and auto insurer determine the specific provisions of a direct repair program. The advantage for the collision specialist is the constant flow of referrals. A collision shop may participate in one or more insurance company programs.
Although this type of agreement can result in additional paperwork for an auto body shop, it can also prevent delays. When an additional part is needed for a repair, the shop doesn’t 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 such as convenience, guarantees on repair work, and 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 replacement or salvage parts. Other details may assign responsibility for any non-essential repairs to the customer. Some contracts also require the collision shop to take full responsibility for any repairs made and to indemnify the insurer for any claims the customer may bring.
In some US states, insurers are required by law to admit any qualified collision repair shop into their direct repair program. This prevents insurance companies from limiting the number of auto body repair businesses or locations with which they have agreements. In these cases, any auto body repair business or location that meets objective criteria may participate.
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