Insurance adjusters in town are handing out DRP business cards along with their estimates to their customers. Is this a fair practice?

As I see it, the old non-legal term, “All’s fair in love and war,” seems to apply here.

As far as it being legally “fair,” the term “unfair and deceptive business practices” comes to mind. Unfair business practices encompass fraud, deception, misrepresentation, and oppressive or unconscionable acts or practices by business, often against consumers, and are prohibited by law across the U.S. and in many countries.

In this case, is the insurer committing fraud, deception, misrepresentation, an oppressive act or an unconscionable act or practice because they’re providing the consumer their referral or recommendation of a repairer? The insurer has a distinct financial interest in getting the consumer to go to a repairer they recommend, so is it fair to safeguard that interest…even if the repairer offers the insurer financial discounts/incentives in return for such referrals?

Without hearing the insurer’s word track, one can’t say if the insurer is crossing the blurry line (which many sometimes do) between making a “recommendation” and doing hardcore “steering” (which in some states may be illegal). Going by your question alone – and not knowing your state laws regarding steering – I would have to say yes, what the insurer’s rep is doing is fair. They can lend the consumer recommendations as long as they are not doing so for their own personal gain (cash incentive, bird-dog fee, cash bounty, etc.). The proper word track may go something like this:

“Here’s my estimate of repair, and while the choice of repairer of course is yours and yours alone, here are the business cards of three local shops I believe will honor my estimate. Should they find I’ve overlooked something or they find hidden damages not addressed, they will contact us to adjust the estimate.”

Consider this: When I had my shop and we did work for a few local dealers that didn’t offer collision repair, I had our business cards made up with the dealer’s name inset and stating that we were the dealer’s recommended collision repair facility. The cards were supplied to the dealer’s staff and service advisors to give out to their customers who inquired about collision/cosmetic repair. Was this “fair” to my competitors/colleagues? Not only was it fair…it was good business and proved to be very successful!

Another example: If you were to have an outside salesperson go out in your community and let everyone know that if they bring their vehicle to you for repair, you will provide them with a free, complete auto detail valued at $159, and/or a 10 percent discount on labor, etc., would that be “fair” to your local competitors? Yes, of course. This is called, as you likely know, “marketing,” and it’s an integral part of the free enterprise system, which is based upon and encourages healthy competition. The person who comes up with the best mousetrap wins, as they say.

Independent repairers need to understand that insurers that have DRP relationships with their competitors are just that…their competitors!

Insurers have a vested interest in the final outcome of repair costs. Understand that insurers are in business to sell promises, and when called upon to keep them, to do so at the lowest possible cost while avoiding associated liabilities. Every dollar an insurer can save (that they should have paid) becomes 100 percent net bottom-line profit. They are motivated to contain costs, and in many markets, there are body shops available to help them do so…at times, even at the repairer’s own demise.

So…what to do? As I see it, there are three basic choices:

1. Continue to do as you have done…getting what you have gotten.

2. Try to get onto DRP programs so you can compete with others in your market who concede and give away the most to obtain and keep insurer referrals.

3. Get back to basic business practices and offer the finest in collision repair quality and service and promote your business through smart marketing and grassroots efforts such as business-to-business promotion.