Do Insurance Companies Warranty Repairs by a Non-DRP Shop?

Insurance company call centers love to deter customers from going with non-DRP shops with a single statement: ‘We cannot guarantee the repairs if you go with a shop that is not on our approved or preferred vendor list.” And just like that, a customer can be lost. Yes, there are laws that say insurance companies cannot lead or dictate where a customer gets their vehicle fixed, but the laws leave a lot of gray areas for interpretation.

If you’re a non-DRP shop, what does the insurance company actually warranty? Let me preface this with this statement: If your shop screws up or does a bad job, then you need to warranty your own repair. Bad body work, missed repairs, inaccurate repairs and a blotchy paint job are all your responsibility.

Generally, the two main things we hold the insurance company accountable for regarding warranties are aftermarket parts failing and aftermarket fitment issues. There are other things that you can hold the insurance company accountable for, but these are the two most common things I see come up. I feel the best way to delve into it is to give you some scenarios.

Issue: The aftermarket part does not fit as well as it should, and the part has already been installed or installed and painted.

Insurance Response: You should have pre-fit the part and made sure it looked correct. We will pay for a replacement OEM part, but we will not pay for labor or paint time because you should have double-checked before you painted it or used the part.

Resolution: On every repair when you submit your first supplement, request R&I time for all aftermarket parts. You don’t have to do it by line item, you can do a single line that says, ‘Pre-fitment of all aftermarket parts to verify accuracy and quality.’ Now, inevitably, the insurance company is going to deny pre-fitment, but what this does for you is set you up to win an argument down the line if you have an issue with any aftermarket parts.

Example: The insurance company authorizes an aftermarket bumper and aftermarket trim pieces. You request R&I time for pre-fitment of all aftermarket parts on your initial supplement and the request is denied. You run a good shop so you still pre-fit your bumper and make sure it is good before you paint it and continue the repair.

During reassembly, you find that the bumper fits well on the vehicle, but the trim pieces are ill-fitting. You take pictures of the ill-fitting parts, return the parts, get OEM trim pieces and submit your supple- ment request with your documentation for OEM trim pieces. Those OEM trim pieces come in and some of the parts still do not fit well. This tells us the aftermarket bumper, which we already painted, is not up to OEM specs and is misshaped.

Example Resolution: We go back to the aftermarket vendor and request warranty on the misshaped bumper. They warranty and refund you on the part but not the installation or paint time or they deny the warranty all together since the part was installed and painted. We go back to the insurance company with our documentation. We purchased the aftermarket part they requested from the vendor they told us we needed to buy it from. We requested pre-fitment of all parts to ensure no issues arose and they denied the request. We did our due diligence and pre-fit the bumper but it is unreasonable to suggest that a shop re-assemble an entire bumper before painting to verify fitment of aftermarket parts so the insurance company can save a few dollars. We did notify and request from the insurance company time to pre-fit parts to verify the accuracy and quality of parts to avoid this type of issue, but the insurance company knowingly made the decision to deny the request. The insurance company now has to make good on the repair and what they promised the consumer when they sold the insurance policy in that state. The insurance company is going to have to pay for an OEM bumper or an additional bumper if the aftermarket bumper could not be returned, along with additional body and paint times to fix the issue.

Note: For this to work you will need to have bought the parts from the vendor the insurance company requested. Also, if the vendor warranties the part or any labor and paint time you will need to adjust that in your supplement request to the insurance company when resolving this issue.

If we are not going back to the insurance company every time a part is ill-fitting or malfunctions and demanding that they pay the additional time, then they will continue to do this to us. They will push us off on aftermarket companies’ warranties and guarantees to take care of paying us for the time and inconvenience of fixing these issues. That shouldn’t be our burden to bear. Let them go back to the aftermarket vendor and subrogate for these losses. We need to start holding the insurance companies accountable for the choices they make and force on us.

When implementing new processes, remember the whole shop is in it together

When implementing or updating processes, it's important to remember that you are working with team members, not mere employees. Each of your team members is an individual, and each has unique qualities that make them invaluable assets to your business. It is essential for you to recognize and appreciate the contributions of all members of your team. Creating effective policies and procedures can be exciting. However, with such a high level of accountability required for SOP development, it's imperative that you foster an environment that encourages collaboration, creativity and passion within your shop. It all starts with viewing team members not just as employees but as people who have a vested stake in the future of your business. When team members are treated right and given autonomy and ownership, it leads to great things!

Whatever your team comes up with must be communicated to the next responsible team member by referencing the standard operating procedure created. If time is spent on updating or developing new policies/processes and administration allows the continued practice of muscle memory or "how we have always done it" then your journey to foundational standard operating procedures will be short-lived. As you move forward, remember any developed process should be able to be executed by the lowest level team member capable of the position with minimal follow-up or clarification. Don't waste time on the exceptions. They will come, and it will be the administration's job to define if a separate policy should be implemented.

Communication throughout this journey will be absolutely key. If you are the only one within the store truly working on developing or improving internal policy and procedure, it simply won't work. Your team must have buy-in and believe they created the SOP or had taken part in its origin. As attempts to implement or execute fail, conversations can be about "What do you think we missed?" or, "What can we tweak or update to have the outcome we are after every single time?" Making this a company-wide journey can be exhausting. However, suppose you don't set aside time for internal meetings around the plan. In that case, the team will unintentionally spend more time explaining why the policy or procedure you developed doesn't work, how it is costing them more time. Then they will work to convince you that you should let them return to what they have always done. Therefore, the valuable energy required to execute the implementation correctly will be lost.

When building successful processes within your shop, the most valuable asset is a team of invested members. Having team members passionate about their work and dedicated to the company's success can make all the difference. The administration needs to prioritize building solid relationships with their team, providing opportunities for growth and development, and creating a positive work environment. What would you rather hear from a team member? "What I do is" or "What we do is"? When employees feel valued and supported, they are more likely to be engaged in the process. By creating an environment where everyone works together towards a common goal, you are fostering a sense of unity and cultivating an atmosphere of collaboration, trust and respect. Referring to your staff as team members might initially sound simple, but I can attest that these details make all the difference.

Referring to team members as just employees can have a negative impact on company culture and morale. When individuals are reduced to merely being a number or a job title, it can lead to a lack of connection and investment in the shop. Employees may feel undervalued and unimportant, leading to a decrease in motivation and productivity. On the other hand, when team members are referred to by their names and recognized for their contributions, it breeds a sense of community and belonging within the workplace. This promotes a positive work environment where individuals feel valued and motivated to contribute their best work. In the long run, acknowledging and respecting team members beyond their job titles can lead to greater company success and overall employee satisfaction.

Communication helps build trust and improved teamwork, resulting in improved productivity within a shop. An effective communication system considers the needs of all parties involved, including team members at all levels, clients and even vendor relationships. It provides a platform for sharing information, exchanging ideas and giving and receiving feedback, resulting in better decision-making and problem-solving. In today's fast-paced environment, having a well-established communication system can make all the difference in achieving your shop's goals. It is crucial to invest time and resources into developing and implementing a communication system that caters to the organization's specific needs to ensure success.

DREW BRYANT has been the owner of DB Orlando Collision since August of 2011. A 20 Group leader, in-demand conference speaker and award-winning shop owner, Bryant takes a non-traditional approach to process implementation, lean process development, & overall operational experience while remaining dedicated to his staff’s personal and professional development.

EMAIL: drew@orlandocollision.com

ARCHIVE: fenderbender.com/bryant