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Collision Repairers Have Mixed Opinions of Insurers, DRPs

The BodyShop Business 2017 Industry Profile examines insurer-repairer relations, among other topics.

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There are two sides to every story. And while we at BodyShop Business haven’t shied away from the topic of insurers behaving badly, we also acknowledge that body shops and insurers – for better or worse – have an interdependent relationship.

It’s easy to find collision repairers whose interactions with insurance carriers have been nothing short of exasperating. But there are shops out there that have learned to co-exist – and even thrive – with their insurance partners, as the BodyShop Business 2017 Industry Profile suggests.

For example, more than one-third of shops (34 percent) said their profit margins have gone up since joining a DRP, while 42 percent said their profit margins have stayed the same. The number of shops reporting a decline in profit margin since joining a DRP dropped from 40 percent in 2015 to 24 percent in the 2017 survey.

Still, the subject of insurance remains a lightning rod in the collision repair industry.

Nearly half of shops (48 percent) said the concept of DRPs is, at the very least, good for the industry, while 13 percent said the concept is fair.

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Non-DRP shops offered a starkly different perspective. Nearly three-quarters of non-DRP shops (73 percent) said the DRP concept is poor for the industry.

Since BodyShop Business launched the Industry Profile survey in 2000, the percentage of DRP shops has risen from 36 percent in 2000 to 72 percent in 2017.

However, since 2000, fewer shops feel that they’re benefiting from these DRP arrangements.

As for the topic of insurers behaving badly, 54 percent of body shops said insurance companies try to suppress their rates, down from 67 percent in 2015.

And a whopping 78 percent of collision repairers said most insurers in their area will not pay for OEM parts if a customer objects to aftermarket parts. That’s down from 82 percent in 2015, but still a high percentage.

For more results from the 2017 Industry Profile, read the May issue of BodyShop Business.

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