But from my perspective, most vehicle owners reap tremendous value from DRPs. DRPs have raised the bar for body shops; it forces them to provide exemplary customer service and high quality repairs. They also need to continually train their staff and invest in equipment otherwise risk being left behind as technology evolves. As a result, insurance companies don’t want to do business with every shop in the countryand they shouldn’t. They should want the best-in-class repairing their policyholders’ vehicles.
But there is one reason why the current DRP models sucks, regardless of insurance carrier. This exception provides absolutely no value to the shopalthough it does provide a lot of value to the insurance company. Can you guess what the exception is? Okay, it’s actually not just one thing. It can be summarized in four words: flavor of the day.
Similar to the ice cream shop in your neighborhood, insurance companies regularly serve shops a flavor of the day (or week or month). Insurance companies have a set of guidelines that a shop must agree to in order to participate in their program. These guidelines are in writing and allow a shop owner to decide whether or not the program is of value to them. I cautiously use the word guidelines because the literal translation is “concessions.” While I don’t agree with concessions, at least they are in writing. It allows the shop owner to make a business decision as to whether or not the concessions are worth the potential additional work.
Unlike the guidelines, however, the “flavor of the day” isn’t in writing. Unlike in the ice cream shop, it isn’t posted or advertised. And it sure the heck doesn’t taste good.
What I’m talking about is parts usage, paint labor hours, cycle time, repair times, rental car days and the like…whatever it is that the insurer decides that today is most important to them. There are enough flavors of the day to make Baskin Robbins jealous.
And unfortunately, sometimes these unwritten rules are weighted more heavily by the insurer than the written ones. Shops are routinely eliminated from a DRP for not adhering to everything that they never agreed to adhere to in writing.
Sound fair? Not really. What can a shop do? You can say noand jeopardize your relationship with that carrier. Fair? Not at all. This is what we refer to in the U.S. as the 500-pound gorilla or the bully on the playground.
How do these flavors of the day occur? Are they handed down from the insurer’s corporate headquarters? In most instances, no. It’s something that is usually a result of a local or regional claim office. Management in these offices have the autonomy to do whatever is necessary to meet their budgets. Thus the “flavor of the day.”
Local or regional management analyzes data and identifies trends while trying to figure out what number can be manipulated to give them the result they desire. That’s why the flavor is always different and ever-changing.
Shops need to find a way to work within the system because you aren’t going to beat it. I’m not encouraging anyone to give into whatever the insurance company wants. Nor am I encouraging fraud. I am encouraging you to play the game.
Continue to write complete, consistent estimates. Perform the work you write on the estimate. Document everything.
As you know, the flavor of the day changes routinely. If you can hold out for a day or a week, something else will be a priority and today’s flavor can quickly become yesterday’s old ice cream.
You can’t change the flavor but you can change what you do and how you react.
The Insider offers an unvarnished look at various issues impacting the collision industry from an insurers’ perspective.