DRPs, Here We Come? - BodyShop Business

DRPs, Here We Come?

Starting our DRP involvement with a small insurance company at first seemed like a good idea. But we soon realized that more volume didn’t necessarily mean more profit. Part 10 of a series.

For other installments in this 12-part series, click on the corresponding number: 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 12.

When we were formulating a plan to court a direct repair relationship, we came to the conclusion that we had to crawl before we walked. We figured, you always have to bring something to the table. Without offering something of value, you simply become a charity case – and this is business.

At first, starting with small insurance companies seemed like a baby step in the right direction because they’re often more flexible, understaffed and more sensitive to their budgets. So something as simple as completing a repair early and saving the company from having to pick up the tab on a rental, in addition to making the process as pleasant as possible for the adjuster, creates an impact on them and also can become a possible bargaining chip.

An adjuster from a local insurance company told us he could get us on the list, and we initially viewed it as an opportunity. We consistently worked with the same office staff and adjuster, and a large number of our customers carried their policy. The small company fit our game plan, but we were a little thrown off because we expected to make the first move. It got us thinking: Why had he made the first move and tried to cut us in on the action?

Then it hit us. The veteran adjuster was probably tired of taking our brow beatings every time he came to the shop. Beyond bringing something to the table, we were now planning the menu. Now, we don’t make a practice of abusing insurance adjusters for comedic relief, but their idea of an estimate is a joke. Notorious for specifying used quarters, excessive panel repairs and low labor rates, this company took devaluing an estimate (and customers’ vehicles) to new levels. We countered this by writing letters, educating the customer on shady insurance practices and sending unpaid tickets to collections. What better way to keep us in our place than with a DRP contract?

In the harsh light of day, knowing they were open to negotiations was fine and well. But, did we want to be on their team? Most of our service is built on revealing the insurance trade’s tricks and deception. And this company was the poster child for insurance abuse. Their program worked like this:

  1. Hand over a half-baked estimate missing the majority of small items with a promise to come back out. 
  2. Schedule a supplement, then miss the appointment. 
  3. Ask to have pictures of the additional damage e-mailed. 
  4. Insist they didn’t get pictures and ask for faxed invoices.

Since the intention was to stall the process, trying to skip to step four sent you right back to step two. The stinger was, the company only offered limited rental reimbursement. A majority of the policyholders were high credit risk customers who got their high premium policies at an auto tag company. While the days ticked by, the already-strapped customer began the daily “I want my car back” harassment. By this time, we were sitting on the finished product waiting for a supplement check worth 20 percent of the job. The insurance company banked on the body shop giving back the vehicle before full payment was made, and slipping up on accounts receivable. What a class act.

Starting with a smaller insurance company and working our way up seemed like a good idea on paper. A DRP contract with a small company could have equaled more volume. But if the $35 an hour labor rate we found on the job estimated at the customer’s home was an indication, more volume didn’t necessarily equal more money. And if we were under their thumb, what would happen the next time they held a check for over three weeks because the company was “low on cash?”

You have to start somewhere, but where do you stop? Is there any company you can offer something of value to and not eventually compromise service? We started this journey thinking it best to side with the insurance companies because customers are unappreciative of the efforts we go through on their behalf. But the more we learned, the more it looked like being on board meant being part of the problem – part of the deception. What a tangled web we weave when first we practice the DRP game.

Writer Monica Dorsey is a partner at Classic CollisionWorks in Philadelphia, Pa. You can reach her at [email protected].

You May Also Like

Keys To Making 2023 A Huge Success For Your Auto Body Shop

Stopping daily work to work “on” your business instead of “in” your business is essential in order to deliver change in the new year. 

While you were busy doing your holiday shopping and wrapping gifts, hopefully you were also taking the time to wrap up your business for the year too. Just like you create a list for all of your holiday projects, I create a list of all the things that need to be done to efficiently close out the year and get ready for success in the new year.

Auto Body Consolidation Update: What Will 2023 Bring?

The bull market of consolidation is expected to continue in 2023 even amidst high inflation, rising interest rates and other challenges.

The Great Awakening: Collision Repairers Taking a Stand

Many repairers are now taking a stand, realizing they cannot conduct business the way they used to.

CARSTAR Fort Collins: Process Produces Performance

The new facility that CARSTAR Fort Collins moved into was designed with organization and performance in mind.

Are Collision Repairers Their Own Worst Enemy?

It’s always been easy for repairers to see insurers as the bogeyman that causes all of their problems, but insurers are merely taking advantage of repairers’ lack of business knowledge and acumen.

Other Posts

Are You Ready to ROCK in 2023?

Do you know a “rockstar” in the automotive aftermarket? Then it’s time to nominate them as a Vehicle Care RockStar!

BodyShop Business 2022 Executives of the Year

This year’s Single-Shop award winner is Michael Bradshaw of K & M Collision in Hickory, N.C., and the Multi-Shop winner is Matt Ebert of Crash Champions.

Conducting Collision Business: It’s a New Day

The goal is not to declare war against insurers; it is to declare independence for your organization so that you’re able to provide the highest level of service to your true customers.

Don’t Be Quint: Embrace ADAS and Modern Vehicle Equipment

We can avoid a fate similar to Quint’s in the movie Jaws if we embrace ADAS, technology and training.