Shopping For Insurance

Does that mean we are not qualified or good enough to perform the repairs to your vehicle? NO!! It means quite the opposite.
 
After an accident, some insurance companies will attempt to influence your freedom to choose the shop of your choice by directing you to a shop on "their list" of preferred shops. Shops on these lists take part in the insurance companies "Direct Repair Program" or DRP. The DRP involves the insurance companies promising to send repair shops customers in exchange for a committed contract agreement to discounted repairs, generally with junkyard or imitation parts and short-cut repair guidelines which are set forth by the insurance company! These programs require the participating shops to perform repairs using procedures, parts and suppliers dictated by the insurance company. These parts and procedures are often in the best interest of saving the insurance company money, yet the rates you pay stay the same.
 
Here are a few of the requirements from a prominent insurance company's direct repair program.
 
1. LKQ and aftermarket parts usage will be sought prior to OEM usage.
This means the repair shop is required to locate and use LKQ (meaning Like, Kind and Quality) parts and imitation parts (aftermarket) before new manufacturer parts can be considered.
 
2. Programs goal is to utilize LKQ and aftermarket parts at a combined 40% ratio adequacy.
This means it is the repair shops responsibility to cut the insurance company's repair bill by the use of these substandard parts.
 
3. When sheet metal parts are needed, check for parts in the following order: (1) Used parts (2) Reconditioned and rebuilt parts, (3) Aftermarket parts and (4) OEM parts.
New parts are only to be used as a last resort.
 
4. The insurance company may suspend repair facility immediately upon notice if it fails to satisfy requirements under this agreement.
Meaning if the shop fails to follow these guidelines, they will be removed from the "list" and will no longer receive referrals from the insurance company issuing the contract.
 
The Bottom Line
The direct repair program allows the insurance company to dictate the repairs to your vehicle. The shops participating in these programs have chosen to work for the insurance company, not you, the paying customer. An insurance company cannot require you to use a particular repair shop. In fact, insurance companies are required to notify you of your freedom-of-choice rights regarding auto repair shops and parts.
 
To file a complaint or for additional information please refer to the Texas Department of Insurance website or contact them at the number provided below.
 
www.tdi.state.tx.us
1-800-252-3439
512-463-6515


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