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Tips to ensuring DRP compliance

Tuesday, August 26, 2014 - 07:00
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Ask anyone in a collision repair facility and they will tell you there are few requirements in their job as challenging as pleasing insurers. Most MSO operators build a significant portion of their business model around direct repair relationships (DRPs). Some strive to have any and all DRPs. Often we go to great lengths to market our businesses to insurers and when successful, we agree to contracts that make many demands regarding our performance and responsibilities. An insurer’s local representatives (inspectors, field staff, auditors, or whatever their title may be) may have their own interpretations of their company’s expectations, which adds to the commitment we have made. Their expectations include procedures or policies that suit their personal preference or convenience, making it their own variation of the process and its requirements. In other words, they may have interpreted the company’s requirements and implemented their own way of compliance. Complicating the situation, insurers often change their requirements and they periodically change representatives. It quickly becomes apparent that being in complete compliance can be a daunting task.

Start with the basics
The ancient Roman poet and satirist Horace stated, “No man ever reached to excellence in any one art or profession without having passed through the slow and painful process of study and preparation.” DRP training and set up is critical. A first consideration is who: Who will be the estimator(s) responsible for administering the DRP? Some shops and insurers prefer to have one key point of contact. Others prefer multiple people trained on a specific DRP so that all can handle any immediate needs, such as walk-in estimates, and staff absences are less of an issue. No matter your preference, it is prudent to have at least one backup person who can fill in if necessary. Setting up the automated estimating system with accurate labor rates and preloaded items is necessary. Spend the time to be as complete as possible. Not all companies are inclined to share the DRP contract with staff, as some data may be considered proprietary. Yet the terms of the agreement are the overruling guidelines of your commitment to the insurer. You must share at least the majority of the contract so the estimator knows exactly what the insurer expects. If you develop guidelines cheat sheet reference source for the estimator, you may not have to share the contract, but it will be critical that the reference be precisely accurate and complete in terms of all of the expectations the estimator is responsible for. Sometimes subtle wording in the contract can be significant. Obviously all of the required automated systems required for communications and auditing must be installed and the estimators trained on them. Having the insurance rep train the estimators as much as possible is helpful. This will provide insight as to their specific expectations.

Generally, guidelines cover the following dimensions:

1.    (Quality) Estimating guidelines
     a.    Parts – what part types (AM, LKQ, reconditioned) are acceptable
     b.    Best practices – repair vs. replace, refinish procedures
     c.    Profile – using the correct agreed to rates, mark-ups and discounts
     d.    Documentation – proper type of documentation as defined by the insurance company
          i.     Photo documentation and photo labeling
          ii.     Use of insurance specific descriptions for not-included operations (part code table entries)

2.    Customer communications
     a.    Keep customer informed throughout the repair process with progress updates

3.    Cycle time
     a.     Appraisal cycle time service levels
     b.     Timely handling of the appraisal (assignment sent to estimate written. May be different for drive-able than non-drive-able repairs)
     c.    Repair cycle time service levels
          i.     Require average daily labor production time
          ii.     Require Promise date accuracy (delivery of repaired vehicle to customer on date originally promised)

4.    Customer satisfaction
     a.    Overall satisfaction (CSI)
     b.    Kept-informed
     c.    On-time-delivery
     d.    Customer service
     e.    Repair quality

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