After reading the news yesterday about the ruling in which a group of repair shops won $15 million in a verdict against an insurer for allegedly dictating repair labor prices, and pushing vehicle owners to use certain shops, it will be interesting to see where this leads.

Will this ruling cause waves nationwide? It’s too early to tell but  with the Attorney General of Connecticut strongly supporting the ruling and that fact he is asking the Federal Government to review on a national level could move this issue to the forefront.

The core issue is that when Insurers attempt to dictate reduced labor rates with non DRP shops to a level they have arranged with their DRP facilities, they  are stepping into questionable territory. A more accurate labor rate analysis would survey all repair shops in an area to create what is a fair market survey.

Secondly, Insurers who strongly push DRP programs risk the appearance of steering vehicle owners to shops thus pressuring these owners to have the repairs completed at shops the Insurer has a relationship with.

Over the past five years we’ve seen many Insurers cycle through the DRP model and out and back again. Every time this happens, a new crop of managers hope that DRP’s will help their office control costs. Ultimately, however, DRP programs end up costing more in the long run in than had the Insurer simply conducted an independent appraisal which accurately assesses the damage and was fairly negotiated with a repair shop of the vehicle owner’s choice. I’ve seen all sides first hand and am a big believer that vehicle owners should always take their vehicle to the repair shop of their choice. Ninety-nine percent of the time a highly trained and skilled auto damage appraiser can work with any shop to come to an accurate, fair and reasonable assessment to put the vehicle owner’s car back into pre-accident condition. Unnecessary costs can be contained when the focus is on appraisal accuracy, use of alternative and recycled parts and reasonable negotiations rather than cut rate labor costs and funneling of vehicles to certain facilities.